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 MAJELIS DIKTI DAN LITBANG PIMPINAN PUSAT MUHAMMADIYAH
IVERSITAS MUHAMMADIYAH ENREKANG
SK Mendikbud RI Nomor: 300/M/2020, 19 Februari 2020
Volume 2 Nomor 1 (2020) ISSN Online : 2716-4446

Volume 2 Nomor 1 (2020) ISSN Online : 2716-4446

TRANSFORMATIONAL LEADERSHIP AND EMPLOYEES’

PERFORMANCE: THE MEDIATING ROLE OF
MOTIVATIONANDWORK ENVIRONMENT

Yunianto Agung Nugroho1, Masduki Asbari2, Agus Purwanto3, Sucipto Basuki4,

Rachma Nadhila Sudiyono5, Muhamad Agung Ali Fikri6, Paolinus Hulu7, Mustofa8,
Gusli Chidir9, Suroso10, Yos Xavir11

1,5,6,7,8,11
Sekolah Tinggi Ilmu Ekonomi Insan Pembangunan
2,3
Pelita Harapan University
2,4,9,10
STMIK Insan Pembangunan
3
Bina Bangsa University
*Corresponding author:kangmasduki.ssi@gmail.com

Abstract
The purpose of this study is to measure the effect of a transformational leadership and on
employees’ performance in an Indonesian manufacturer through motivation and work
environment as a mediating variables. Data were collected by using simple random
sampling to 851employees population in an Indonesia manufacturer. The number of
returned and valid questionnaires was 627. Data were processed by using SEM with
SmartPLS 3.0. The results of the study concluded that transformational leadership has a
positive and significant effect on employees’ performance, both directly and indirectly
through a mediating effect of motivation and work environment. This study proposes a
model to improve employees ’performance in Indonesia manufacturers by a
transformational leadership through motivation and work environment as a mediator.
This study can open the way to improve employee readiness in facing industrial
revolution 4.0.

Keywords: Employees’ performance, motivation, transformational leadership, work

environment.

1. Introduction difficult for the organization to achieve its

goals without human resources. If the human
How great is the advancement of technology resources are good and what is needed is
and the development of information, it will be fulfilled, the employee performance will
increase. Many factors influence the
~ 438 ~
improvement of employee performance, term performance is elaborated as the ultimate
including work environment, transformational ability of an individual employee to use its
leadership style, motivation, and employee knowledge and skills efficiently and
performance. To manage the organization to effectively. According to the research, the
remain consistent with the goals of the performance of employees is strictly related to
organization, a leader is needed because his/her physical and academic profile Dvir et
leadership is an important part of improving al. (2014). The performance of employees is
the performance of employees. According to the result of a planned process in a specific job
Stoner (1996), transformational leadership at the time and place of the employee and the
style is a variety of behavior pattern preferred organization concerned according to
by leaders in the process of directing and Mangkuprawira et al. (2007), Prameswari et al
influencing workers. Mulyadi and Rivai (2020), Sihite et al (2020) and Sopa et al
(2009) mentioned that leaders in their (2020).
leadership era need to think as well as to
demonstrate leadership styles. Ivansevich et al. Motivation is a cause that distributes and
(2008) stated that leadership is the ability to supports human behavior that they work hard
use the influence of the environment or and are enthusiastics to achieve optimal results
situation of the organization, to produce a (Hasibuan, 2007). Therefore, motivation is
meaningful effect and environment impact on very important in human life because with
the achievement of challenging objectives. motivation people can push the limits of their
minds and achieve something they need and
The work environment in an organization or want. Handoko and Hani (2003) stated that
company is very important to be considered by work motivation is an individual’s personal
management. Although the work environment circumstances that encourage the willingness
does not carry out the production process in a of individuals to perform certain activities in
company, the work environment has a direct order to achieve a goal. According to Malthis
influence on employees who carry out the and Jackson (2006), motivation is a desire in a
production process. The work environment is person that causes the person acts.
an atmosphere where employees conduct
activities every day. The work environment is 2. Literature Review
generally determined by six dimensions:
responsibility, coordination, team spirit,
2.1. Transformational Leadership
reward, standards and organizational clarity
Timpe and Dalle (1999). Work environment is
According to Stoner (1996), leadership style is
able to create motivation and reward if it is
a variety of behavior pattern preferred by
supported by nine factors: core values of the
leaders in the process of directing and
organization, leadership, employee aspirations,
influencing workers. Ivansevich and Matteson
achievement, recognition, development, and
(2008) stated that leadership is the ability to
role of work design, quality of work life,
use the influence of the environment or
balance at the work and talent management
situation of the organization to produce a
Armstrong (2009). According to Barry et al.
meaningful effect and environment impact on
(2001), the work environment is the physical
the achievement of challenging objectives.
environment where employees’ work affect
the performance, security, and quality of their
2.2. Work Environment
working lives.
The work environment is one of the most
A healthy and good work environment will
important things in supporting the motivation
affect the work comfort of employees. If
of nurse while in the hospital. As mentioned
employees feel comfortable at work, it can be
by Rahmawati et al. (2014) creating a good
ascertained that performance will increase.
working environment atmosphere is by
Employee performance is one of the
creating good relationships/interactions among
mandatory aspects to be considered by a
employees so that the working atmosphere
company because the performance of the
created will be more comfortable and
employee requires the organization to achieve
harmonious. As a result, employees will have
its goals Surbakti and Suharnomo (2013). The
~ 439 ~
more spirit to improve their performance. affects employee performance with the
Saydam (2000) interpreted the work significance value.
environment as "the entire work infrastructure
that is around employees who are doing the H1: There is a significant relation between
work that can affect the work itself”. transformational leadership and employee
performance.
2.3. Motivation
2.6. Relationship between Transformational
According to Rivai (2004), motivation is a set Leadership and Motivation
of attitudes and values that affect the
individual to achieve the specific goals in Leadership style has an impact to motivation
accordance with the individual goals. According to Lin, & Chuang (2014), The
Motivation is the driving force which leads correlations between the above two leadership
individuals to want to act, perform, or do styles and the learning motivation of students
something without pressure or manipulation are both “moderate to a good relationship”
(Smith et al,. 2015). (Hanifah et al, 2014; Bernarto et al, 2020).
Then, it seems obvious that there is a
2.4. Performance significant relationship between the leadership
style and motivational work practiced by PT.
According to Mangkunegara (2000), Pelni (Elqadri et al, 2015). The value of the
performance is the result of the quality and multiple correlation coefficient of R = 0,985a.
quantity achieved with the responsibility given It indicated that the degree of correlation
to it. The factors that affect performance between leadership style and motivation is
achievement are the factors of ability and very strong. According to Turang et al. (2015),
motivation. According to Rivai (2004), leadership style has a significant influence
performance is a function of motivation and partially on motivation. According to
ability. To accomplish a person's task or job Febiningtyas and Ekaningtias (2014), the test
should have a certain degree of willingness result of the effect of leadership variable on
and level of ability. motivation showed that the leadership variable
has a significant effect on motivation with the
2.5. Relationship between Transformational significance value.
Leadership and Employee Performance
H2: There is a significant relation between
Leadership style has an impact on employee transformational leadership and motivation.
performance (Asbari, 2019; Asbari et al, 2019;
Asbari et al, 2020; Purwanto et al, 2019; 2.7. Relationship between Transformational
Purwanto et al, 2020; Santoso et al, 2019; Leadership and Work Environment
Hanifah et al. 2014). There is a significant
relationship between leadership style on According to Bernarto et al. (2020), there is a
employees having improved the performance significant relationship between leadership
of all employees within the company. style on environment having improved the
According to Nawaz (2017),leadership style performance of all employees within the
related to employee performance both styles company. According to Nawaz (2017), there is
have a significant impact on individual a need of shared leadership styles which
performance. According to Lumbasi et al. contains the mixture of attributes of both styles
(2016), the study established a significant to encourage their environment. Prameswari et
positive effect between application of al. (2020) stated that degree of correlation
participative leadership style and the between leadership style and environment on
performance of the employee. According to employee performance is very strong.
Turang et al. (2015), leadership style has a According to Purwanto et al. (2020), this study
significant influence partially on employee showed significant, concluding that leadership
performance in PT. Dayana Cipta. According style directly influence work environment.
to Febiningtyas and Ekaningtias (2014), the
first hypothesis is accepted that leadership

~ 440 ~
H3: There is a significant relation between
transformational leadership and work According to Hanifah et al. (2014), there is a
environment. significant relationship between leadership
style on employees having improved the
2.8. Relationship between Motivation and performance and motivation of all employees
Employee Performance within the company. According to Nawaz
(2017), there is a need of shared leadership
Motivation impacts on employee performance styles which contains the mixture of attributes
Mangkunegara (2016). Motivation has a of both styles to motivate and encourage their
significant effect on physicians’ performance employees. Elqadri et al. (2015) stated that
at X hospital. According to Turang et al. degree of correlation between leadership style
(2015), motivation has a significant influence and motivation on employee performance is
partially on employee performance in PT. very strong. According to Almer et al. (2017),
Dayana Cipta. According to Renah and this study showed significant, concluding that
Setyadi (2014), it can be concluded that there leadership style and motivation directly
is a significant effect between working influence the performance of employees.
motivation and performance. According to Turang et al. (2015) stated that leadership style
Musriha (2011), the job motivation and motivation have significant influence
significantly affects the job performance of simultaneously on employee performance.
cigarette rollers in Kudus District, Central Java
Province. Aluf et al, (2017) stated that H6: There is a significant relation between
motivation has a positive and significant effect transformational leadership and employee
on their performance. performance through motivation.

H4: There is a significant relation between 2.11. Relationship between

motivation and employee performance. Transformational Leadership and
Employee Performance through Work
2.9. Relationship between Work Environment
Environment and Employee Performance
According to Hanifah et al. (2014), there is a
Work environment impacts on employee significant relationship between leadership
performance Muchtar (2016). Partially style on employees having improved the
working environment significantly influences performance and work environment of all
the performance of employees at University of employees within the company. According to
PGRI Ronggolawe Tuban. According to Nawaz (2017), there is a need of shared
Riyanto et al, (2017), the work environment leadership styles which contains the mixture of
has the greatest relationship or most closely attributes of both styles to encourage their
related to employee performance. According employees. Elqadri et al. (2015) stated that
to Putra and Sari (2017), the results of the degree of correlation between leadership style
study showed significant results that the work and work environment on employee
environment affects employee performance. performance is very strong. According to
According to Taty and Basir (2016), work Almer et al. (2017), this study showed
environment has a direct and significant significant, concluding that leadership style
influence on employee performance. and work environment directly influence the
According to Mangkunegara (2016), work performance of employees. Turang et al.
environment has a significant effect on (2015) stated that leadership style and work
physicians’ performance at X hospital. environment have significant influence
simultaneously on employee performance.
H5: There is a significance relation between
work environment and employee performance. H7: There is a significant relation between
transformational leadership and employee
2.10. Relationship between performance through work environment.
Transformational Leadership and
Employee Performance through Motivation

~ 441 ~
 Figure 1. Research Model

3. Research Methodology random sampling technique. The number of

returned and valid questionnaires was627. So,
3.1. Operational Definitions of Variables 73.68 percent questionnaires were valid from
and Indicators the number of population.

This study used quantitative methods. Data 4. Results and Discussion

were collected by distributing questionnaires to
all employees in companies. This study used 4
4.1. Sample Description
items to measure transformational leadership by
Bass & Avolio (2000). This study used 7 items
to measure work environment by Carlopio Table 1. Sample Descriptive
(1996). Motivation by Aldelfer (1972) was Information
measured by using 5 items. Criteria Amount %
Employeeperformance by Babin and Boles Age (per < 30 267 42.61%
(1998)was measured by using 5 items. This December years old
study uses close-ended questionnaires except for 2019) 30 - 40 239 38.08%
questions/statements about the identity of years old
respondents in the form of semi-open > 40 121 19.31%
years old
questionnaires. Each closed question/statement Working < 5 years 28 4.50%
item has five answer options, namely: strongly period as old
agree (SS) with a score of 5, agree (S) with a a 5-10 441 70.30%
score of 4, fairly disagree (KS) with a score of 3, permanent years old
employee > 10 158 25.20%
disagree (TS) with a score of 2, and strongly
years old
disagree (STS) with a score of 1. Data were Last Bachelor 80 12.75%
processed by using the PLS method with formal degree
SmartPLS version 3.0 software. education
Senior 431 68.70%
High
1.1. Population and Sample Company
/ Equal
The population in this study were 851 ≤ Junior 116 18.55%
employees in an Indonesiamanufacturer. The High
Company
questionnaire was distributed with a simple
~ 442 ~
 al, 2010; Ghozali, 2014). In this study, the
minimum acceptable loading factor is 0.5,
4.2. Test Results Validity and Reliability of with the condition that the AVE value for each
Research Indicators construct is> 0.5 (Ghozali, 2014).

Measurement model tests include

convergent validity, discriminant validity, and Based on the PLS model estimation results
composite reliability tests. The results of the in the figure above, all indicators had a
PLS analysis can be used to test the hypothesis loading factor value above 0.5 so that the
if all the indicators in the PLS model meet the model met the convergent validity
requirements of convergent validity, requirements. Apart from looking at the
discriminant validity, and reliability tests. loading factor value of each indicator,
convergent validity was also assessed from the
AVE value of each construct. The AVE value
4.2.1. Convergent Validity Testing for each construct was already above 0.5. So
Convergent validity test is performed by the convergent validity of this study met the
looking at the loading factor value of each requirements. The value of items loadings,
indicator to the construct. For most references, Cronbach's alpha, composite reliability and
a loading factor of 0.5 or more is considered to AVE of each construct can be seen in Figure 2
have validation that is strong enough to and Table 2:
explain latent constructs (Chin, 1998; Hair et

Figure 2. Valid Model Estimation

Table 2. Items Loadings, Cronbach’s Alpha, Composite Reliability, and Average

Variance Extracted (AVE)
Cronbach’s Composite
Variables Items Loadings AVE
Alpha Reliability
Transformational TL1 0.758 0.824 0.883 0.655
Leadership TL2 0.829
(TL) TL3 0.838
TL4 0.810
Work Environment WE1 0.783 0.911 0.929 0.653
(WE) WE2 0.812

~ 443 ~
 WE3 0.809
WE4 0.842
WE5 0.798
WE6 0.777
WE7 0.834
Motivation MO1 0.856 0.907 0.931 0.730
(MO) MO2 0.890
MO3 0.887
MO4 0.825
MO5 0.810
Employees’Performance EP1 0.808 0.885 0.915 0.684
(EP) EP2 0.838
EP3 0.833
EP4 0.817
EP5 0.840

4.2.2. Discriminant Validity Testing recommended composite reliability and

Cronbach's alpha values are more than 0.7.
A discriminant validity test is carried out to
(Ghozali, 2014). The reliability test results in
ensure that each concept of each latent
table 2 above show that all constructs have
variable is different from the other latent
composite reliability and Cronbach's alpha
variables. The model has good discriminant
values greater than 0.7 (> 0.7). In conclusion,
validity if the AVE squared value of each
all constructs have met the required reliability.
exogenous construct (the value on the
diagonal) exceeds the correlation between the
4.3. Hypothesis Testing
construct and other constructs (values below
the diagonal) (Ghozali, 2014). The results of
Hypothesis testing in PLS is also called the
the discriminant validity test by using AVE
inner model test. This test includes a test of the
squared values or by looking at the Fornell-
significance of direct and indirect effects and
Larcker Criterion Value can be seen in Table 3
measurement magnitude influence of
and Tabel 4. The results of the discriminant
exogenous variables on endogenous variables.
validity test in Table 3 and Table 4 showed
To find out the influence of tacit and explicit
that all constructs had the AVE square root
knowledge sharing on organizational learning
value above the correlation value with other
and innovation capability, a direct influence
latent constructs (through the Fornell-Larcker
test is needed. The direct effect test is
criteria) so that it can be concluded that the
performed using the t-statistic test in a partial
model met the discriminant validity.
least squared (PLS) analysis model using the
help of SmartPLS 3.0 software. With the
boothstrapping technique, R Square values and
4.2.3. Construct Reliability Testing
significance test values are obtained as in the
Construct reliability can be assessed from table below:
the value of Cronbach's alpha and composite
reliability of each construct. The

Tabel 3. Item Loading and Cross-Loading

EP MO TR WE
EP1 0.809 0.641 0.569 0.595
EP2 0.837 0.664 0.639 0.647
EP3 0.834 0.696 0.627 0.658
~ 444 ~
 EP4 0.808 0.678 0.613 0.692
EP5 0.837 0.673 0.648 0.608
MO1 0.717 0.851 0.618 0.661
MO2 0.732 0.888 0.623 0.693
MO3 0.685 0.887 0.624 0.692
MO4 0.609 0.820 0.600 0.657
MO5 0.707 0.803 0.604 0.636
TL1 0.539 0.581 0.748 0.656
TL2 0.629 0.635 0.829 0.634
TL3 0.642 0.588 0.843 0.608
TL4 0.617 0.530 0.814 0.571
WE1 0.600 0.599 0.630 0.775
WE2 0.599 0.596 0.590 0.802
WE3 0.550 0.567 0.575 0.806
WE4 0.652 0.643 0.635 0.841
WE5 0.664 0.661 0.627 0.798
WE6 0.655 0.650 0.598 0.778
WE7 0.643 0.694 0.633 0.833

Table 4. Discriminant Validity

Variables EP MO TR WE
EP 0.827
MO 0.813 0.854
TL 0.751 0.722 0.809
WE 0.777 0.786 0.762 0.808

Table 5. R Square Value

R Square R Square Adjusted

EP 0.740 0.739
MO 0.530 0.529
WE 0.591 0.590

Table 6. Hypotheses Testing

T
Hypotheses Relationship Beta SE P-Values Decision
Statistics
~ 445 ~
 H1 TL -> EP 0.239 0.042 9.426 0.000 Supported

H2 TL -> MO 0.728 0.039 32.138 0.000 Supported

H3 TL -> WE 0.769 0.040 40.448 0.000 Supported

H4 MO -> EP 0.463 0.043 9.426 0.000 Supported

H5 WE -> EP 0.230 0.047 5.122 0.000 Supported

H6 TL -> MO -> EP 0.337 0.027 8.573 0.000 Supported

H7 TL -> WE -> EP 0.177 0.028 5.088 0.000 Supported

performance. If seen from the weight value of

Based on Table 5 above, the value of direct influence (Beta) which is positive, it
R Square of WE was 0.591 which means that showed that the better the transformational
work environment (WE) was explained by leadership style, the higher the employee's
transformational leadership (TL) by 59.1%, performance. Leadership is the ability to
while the remaining 40.9% was explained by influence (persuade) other people to achieve
other variables not discussed in this study. The goals enthusiastically. This is a human factor
value of R Square of MO was 0.530 which that binds as a group together and motivates
means that motivation (MO) was explained by them to achieve goals. Transformational
transformational leadership (TL) by 50.3%, leadership style has a significant effect on the
while the remaining 49.7% was explained by employee performance. Understanding
other variables not discussed in this study. leadership reflects the assumption that
Meanwhile, the value of R Square of leadership involves a process of social
employees’ performance (EP) was 0.740 influence. In this case, the influence is
which means that the employees’performance deliberately carried out by someone against
variable was explained by transformational others to structure activities and relationships
leadership (TL), work environment (WE) and within a group or organization. Effective
motivation (MO) by 74.0%, while the leadership must give directions to the efforts
remaining 26.0% was explained by other of all workers in achieving organizational
variables not discussed in this study. Table 6 goals. Without leadership, relationships
shows T Statistics and P-Values which show between individuals and organizational goals
the influence between variables. are weak. This situation creates a situation
where individuals work to achieve their
4.4. Discussion personal goals, while the whole organization
becomes inefficient in achieving its goals.
The results of the hypotheses testing found
that the transformational leadership style has a Based on the results of hypotheses analysis,
significant positive effect on the employee the model showed that transformational
performance (beta= 0.239; T Statistic= 9.426; leadership style variables have a positive and
P-Values= 0.000 < 0.05). This means that H1 significant effect on motivation (beta= 0.728;
accepted, thus, the higher the transformational T Statistic= 32.138; P-Values= 0.000 < 0.05).
leadership style felt by management of This means that H2 accepted, thus, the better
industry the higher the employee's the transformational leadership style that is

~ 446 ~
perceived by employees, the work motivation 5.1. Conclusions
will increase. Employees will feel motivation
in working if they are led by leaders having a Based on the results of the analysis and
capability of providing motivational discussion described in the previous chapter,
inspiration. The results of the hypotheses the conclusions from this study are: There is a
testing found that transformational leadership positive impact of transformational leadership
has a positive and significant effect on the style on employee’s performance, motivation
work environment (beta= 4630.769; T and work environment. This means that the
Statistic= 40.448; P-Values= 0.000 < 0.05). better the transformational leadership style,
This means that H3 accepted. Motivation has a then employees’ performance, motivation and
positive and significant effect on the employee work environment will increase. There is a
performance(beta= 0.463; T Statistic= 9.426; positive influence on the motivation and work
P-Values= 0.000 < 0.05). This means that H4 environment on employee’s performance. This
accepted. The results of the hypotheses testing means that the better the motivation and work
found that the work environment has a positive environment,then employees’ performance
and significant effect on the performance of will increase. The transformational leadership
Indonesian manufacturer employees (beta= style has a positive influence effect on the
0.230; T Statistic= 5.122; P-Values= 0.000 < employee’s performance through motivation
0.05). This means that H5 accepted, thus, the and work environment. This means that an
better the work environment the higher the increasingly good transformational leadership
employee's performance. The work style will increase motivation and work
environment is a basic factor that must be environment and in the end, the employee’s
considered and has a considerable role in performance will also increase.
every activity of the company.
5.2. Managerial Implication
The results of hypotheses testing (H6) showed
that the value of T Statistics = 8.573> 1.96, Based on the findings in this study, some
this means the result is significant at the 0.05 suggestions can be recommended to several
significance level. Then, it can be concluded parties including: Management of
that transformational leadership style manufacturer applies a transformational
influences employee’s performance through leadership style that can be accepted by all
motivationThis means that H6 accepted, better employees, especially on the indicator willing
the transformational leadership style felt by to encourage the development and growth of
employees, the higher the work motivation of subordinates by providing attractive bonuses.
employees. Thus, this will improve their This is important even though it is only a
performance. The effect of work motivation on bonus, but such an award is needed by
performance is that employees having a strong employees so that it is expected to increase the
urge to work will contribute more effectively motivation of the greater workforce.
to the company than employees who are lazy Management of manufacturer creates a
to work. Employees who have high work conducive employee work environment,
motivation will easily follow the leader's especially on facilities and work equipment.
instructions so that their performance will For this reason, the hotel should be able to
increase. improve work facilities and equipment to meet
the hotel standards in general, considering that
The results of hypotheses testing (H7) showed these facilities and equipment will be able to
that the value of T Statistics = 5.088> 1.96, accelerate the work process so that employee
meaning this is significant at the 0.05 level of performance will be more optimal.
significance. Thus, it can be concluded that the Management should always provide
transformational leadership style influences motivation to all employees to work seriously
employee’s performance through work to achieve good performance results.
environment. This means that H7 accepted. Motivation is mainly given in the form of
guarantees that the company will not fire
5. Conclusion and Recommendation employees, because this item is proven to have
the lowest rating. So that there needs to be an

~ 447 ~
agreement that the company will not downsize ip/article/view/187
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