Employee Performance and Mental Well-Being: The Mitigating Effects of Transformational Leadership During Crisis

Kristina Czura, Florian Englmaier, Hoa Ho and Lisa Spantig
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Hoa Ho: LMU Munich

No 512, Rationality and Competition Discussion Paper Series from CRC TRR 190 Rationality and Competition

Abstract: The positive role of transformational leadership for productivity and mental wellbeing has long been established. Transformational leadership behavior may be particularly suited to navigate times of crisis which are characterized by high levels of complexity and uncertainty. We exploit quasi-random assignment of employees to managers and study the role of frontline managers’ leadership styles on employees’ performance, work style, and mental well-being in times of crisis. Using longitudinal administrative data and panel survey data from before and during the Covid-19 pandemic, we find that the benefits of different leadership styles depend on the environment: Employees of more transactional managers outperform those of more transformational leaders before the onset of the pandemic. During the pandemic, however, more transformational managers lead employees to better performance and mental well-being. We discuss potential explanations and implications.

Keywords: leadership; frontline managers; labor-management relations; organizational behavior; crisis (search for similar items in EconPapers)
JEL-codes: J53 M12 M54 (search for similar items in EconPapers)
Date: 2024-10-06
New Economics Papers: this item is included in nep-hrm and nep-lab
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Related works:
Working Paper: Employee Performance and Mental Well-Being: The Mitigating Effects of Transformational Leadership During Crisis (2024)
Working Paper: Employee Performance and Mental Well-Being: The Mitigating Effects of Transformational Leadership during Crisis (2023)
Working Paper: Employee Performance and Mental Well-Being: The Mitigating Effects of Transformational Leadership during Crisis (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:rco:dpaper:512

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