Analysis of the Influence of Transformational Leadership on Employee Performance Through Internal Corporate Social Responsibility (CSR) and Job Satisfaction

Abstract

The low level of employee productivity in West Java encourages the need for appropriate managerial strategies to improve employee performance. This study aims to analyze the effect of transformational leadership on employee performance, by examining the mediating role of Internal Corporate Social Responsibility (CSR) and job satisfaction. This study uses a quantitative approach with the Partial Least Squares Structural Equation Modeling (PLS-SEM) method to examine the relationship between latent variables. Data were collected through a questionnaire survey of 385 respondents who are workers in West Java. The results of the outer model test indicate that all indicators in the model are valid and reliable. In the inner model test, the R-Square (R²) value shows that Internal CSR has a value of 0.536, Job Satisfaction is 0.614, and Employee Performance is 0.675. All proposed hypotheses are proven significant. Internal CSR and job satisfaction are also proven to be strong mediators in the relationship between transformational leadership and employee performance. These findings imply that organizations need to develop an inspirational leadership style and strengthen the implementation of internal CSR programs to create superior job satisfaction and employee performance.