Transformational leadership and job satisfaction: the moderating effect of contingent reward

Purpose The purpose of this paper is to investigate the mechanisms that link transformational leadership to employee job satisfaction by examining the moderating effect of contingent reward on the relationships. Design/methodology/approach The study employed explanatory and cross-sectional survey design. Data were obtained from 315 bank employees and analyzed using correlational and multiple regression techniques. Findings The results revealed that there are positive relationships between the dimensions of transformational leadership and job satisfaction which are augmented by contingent reward. However, the relationships of idealized influence and intellectual simulation to job satisfaction are moderated by contingent reward, implying that, in the banking sector, the positive influence of these transformational leadership traits on employee job satisfaction can be enhanced by contingent reward. Originality/value The paper makes an important contribution to the existing organizational literature by establishing the utility of contingent reward as a moderator on the relationship between transformational leadership and employee job satisfaction in a banking sector.