Performance: Trust, efficacy, and job satisfaction as mediators

Abstract

Orientation: With the growing presence of Generation Z (Gen Z) in the workforce, understanding the leadership factors that drive their performance has become increasingly critical. Transformational leadership is often seen as a key driver in shaping employee attitudes and behaviours. Research purpose: This study aims to examine the influence of transformational leadership on Gen Z employees’ performance, by considering the mediating roles of trust in leadership, self-efficacy and job satisfaction. Motivation for the study: While previous research has explored leadership impacts on employee outcomes, limited attention has been given to the psychological mechanisms underlying these relationships in Gen Z, especially within digital service roles. Research approach/design and method: A quantitative, explanatory research design was employed using structural equation modelling–partial least squares (SEM-PLS). Data were collected from 192 Gen Z employees in a digital-based company. Main findings: Transformational leadership significantly enhances trust in leaders, self-efficacy, job satisfaction and employee performance. Trust in leadership serves as a primary mediator, linking transformational leadership to self-efficacy, job satisfaction and performance. Self-efficacy influences job satisfaction, while job satisfaction strongly mediates the relationship between leadership and performance. Practical/managerial implications: Organisations employing Gen Z workers should prioritise transformational leadership practices that build trust and foster psychological resources such as self-efficacy and job satisfaction to significantly boost performance in digital service roles. Contribution/value-add: This study contributes by integrating social exchange theory, social cognitive theory and self-determination theory to explain the psychological mechanisms in the relationship between transformational leadership and Gen Z performance. The added value of this study is the finding that trust and job satisfaction are more dominant than self-efficacy in bridging the influence of leadership on performance, which confirms the importance of relational and affective factors in young generations in digital organisations.