TRANSFORMATIONAL AND TRANSACTIONAL LEADERSHIP, WORK ENGAGEMENT, AND THE ROLE OF PERFORMANCE APPRAISAL POLITICS: EVIDENCE FROM PAKISTAN’S PHARMACEUTICAL AND CHEMICAL INDUSTRIES

Abstract

This study investigates the impact of transformational and transactional leadership styles on employee job performance, with work engagement as a mediating variable and performance appraisal politics as a moderating variable. Data were collected through a survey of 410 employees from pharmaceutical and chemical companies in Pakistan. Using Partial Least Squares Structural Equation Modeling (PLS-SEM), the findings demonstrate that both leadership styles positively influence job performance, but transformational leadership has a significantly stronger impact. Work engagement partially mediates the relationships, highlighting the critical psychological mechanisms linking leadership to performance. Furthermore, performance appraisal politics moderates these relationships by weakening the positive effects of leadership and engagement under high political conditions. The study contributes to leadership and organizational behavior literature by contextualizing leadership dynamics within emerging economies and highly regulated sectors. Practical implications for leadership development, appraisal fairness, and work engagement strategies are discussed, along with study limitations and directions for future research.