Positivity at the workplace: examining the relationships among leadership, employee psychological capital, organisational virtuousness, employee thriving and job performance

Positive leadership behaviour has been related to employee growth, development and overall organisational success. Based on the socially embedded model of thriving, social exchange theory and broaden-and-build theory, this thesis examined the effects of three positive leadership behaviours -transformational, authentic and servant leadership - as predictors of employee psychological capital, organisational virtuousness, employee thriving and job performance within the banking and software industries in Pakistan. A survey was used to gather quantitative data from 349 employees and 61 leaders of software houses and public and private banks in Pakistan. The survey comprised a multifactor leadership questionnaire, an authentic leadership questionnaire, a servant leadership scale, a psychological capital questionnaire, an organisational virtuousness scale, a thriving scale and a performance scale (which included in-role behaviours and the extra-role behaviours of individuals and organisations). To mitigate the issue of common method variance bias, quantitative data for the predictor and criterion variables were collected from two different sources (managers and their subordinates) and at two different times (Time 1 and Time 2). Further, Harman's single factor test for detecting common method variance bias revealed that it was was not an issue affecting the data.<br><br> The data were screened to identify any missing values and outliers. In addition, the assumptions of the multivariate data analysis, which included normality, linearity, homoscedasticity and multicollinearity, were satisfied. Confirmatory factor analysis and structural equation modelling were used to analyse the quantitative data. The software used for analysis was the IBM Statistical Package for Social Science Version 25 and Mplus Version 8. The factorial validity of all constructs was obtained using confirmatory factor analysis. The measurement model fit the data well based on the results of the fitness indicators. Further, the convergent validity and discriminant validity were confirmed through average variance extraction (AVE), composite reliability (CR) and the correlation matrix. The reliability was later confirmed using Cronbach's alpha values. These steps ensured data integrity before the application of constructs for structural equation modelling (SEM) analysis.<br><br> Several major substantive findings emerged from the current thesis. First, transformational, authentic and servant leadership behaviours each had unique effects on the follower-criterion variables. Transformational leadership, authentic leadership and servant leadership each predicted job performance, employee psychological capital, organisational virtuousness. Only servant leadership and authentic leadership predicted employee thriving. Second, employee psychological capital and employee thriving positively predicted job performance. Third, employee psychological capital mediated the relationship between positive leadership behaviours (transformational and servant leadership) and employee thriving. Fourth, organisational virtuousness mediated the relationship between positive leadership behaviours (transformational and authentic leadership) and employee thriving. Finally, employee thriving also mediated the organisational virtuousness - job performance and employee psychological capital - job performance relationships.<br><br> Overall, this thesis has several theoretical and managerial implications. In terms of its theoretical contributions, this thesis is one of the first to theoretically relate several positive psychology constructs (organisational virtuousness, psychological capital and thriving) to positive leadership behaviours (transformational, authentic and servant leadership) and job performance. Consequently, the thesis theorised several key antecedents of employee psychological capital, organisational virtuousness and employee thriving. In addition, the thesis confirmed the significant impact of three separate leadership styles on job performance within the banking and software industries and, subsequently, added to existing knowledge on how leadership manifested in these industries in Pakistan. Further, the thesis added significantly to the social exchange theory, broaden-and-build theory and the socially embedded model of thriving by providing valuable evidence on the relationship between the research constructs in these industries in Pakistan. In terms of methodological contributions, this thesis adopted a complex research design to avoid the problem of common method variance bias and utilised various advanced data analysis techniques. These methods provided solid foundations, ensuring the quality of the findings of the thesis. In terms of practical contributions, these findings could assist managers to adapt their leadership behaviour according to transformational, authentic and servant leadership styles, resulting in higher employee psychological capital, organisational virtuousness and employee thriving behaviour among banking- and software-industry employees, which, in turn, could lead to improvements in job performance.<br><br> Future research directions include the need to examine the role of other leadership styles such as ethical leadership, empowering leadership, substitutes for leadership, social process of leadership and leader-member exchange in regard to enhancing positive psychological resources. Further, future studies could benefit from using a qualitative methodology to identify other antecedents that promote employee positivity at work. Additionally, future studies could investigate other potential mediators in the relationship between positive leadership and positive psychological resources. Those probable mediators may include high performance work practices, perceived organisational support, employee resilience, efficacy and focus in the relationship between leadership and performance. Finally, future studies could examine the role of cultural factors and other contextual factors that could influence the relationship between positive leadership, positive psychological resources and job performance.<br><br>