Transformational Leadership and Employee’s Career Satisfaction: Role of Psychological Empowerment, Organizational Commitment, and Emotional Exhaustion

To empower employees, a transformational leadership style is essential as employee empowerment is assisted by transformational leaders and enhances employee satisfaction with their career. The objectives of this study are (a) to study relationship between transformational leadership, psychological empowerment, organizational commitment, and career satisfaction of employees, (b) to evaluate mediating role of psychological empowerment and organizational commitment in relationship between transformational leadership and career satisfaction, and (c) moderating role of emotional exhaustion on relationship between transformational leadership, psychological empowerment, and organizational commitment. Data collection has been through structured questionnaires by 513 bank employees. In addition, a cross-sectional survey has been conducted. PLS-SEM has been utilized for data analyses. Results indicate that transformational leadership significantly relates to empowerment and organizational commitment of employees but is insignificantly associated with career satisfaction. Moreover, transformational leadership significantly influences employees' career satisfaction through the mediation of empowerment and commitment. Moderation analyses show that if employees’ emotional exhaustion is higher, it weakens them, which further weakens the direct relationship between transformational leadership and psychological empowerment and association between transformational leadership and commitment. This research can assist managers in developing retention strategies for employees by empowering them within organizational borders. Findings may benefit firms in identifying possible sources of satisfaction, resulting in increased productivity and profitability. Limited research has been done on leadership, specifically transformational leadership in Pakistan, compared to developed countries. Therefore, this research will explore the importance of transformational leadership in banking industry of Pakistan and how it affects employee career satisfaction.