Linking Transformational Leadership and KPI Systems to Employee Performance: The Mediating Role of Expectancy-Based Motivation in Public Transportation
Abstract
Background: This research examines how transformational leadership and key performance indicator (KPI) systems influence employee performance, with expectancy-based motivation as a mediating mechanism in public transportation. The study addresses a gap in prior research that has commonly used general work motivation, organizational commitment, or job satisfaction rather than expectancy-based motivation to explain how leadership and performance-management systems are translated into performance outcomes.
Research Gap: Previous studies have examined transformational leadership and performance through general work motivation, organizational commitment, or job satisfaction. Such mediators are useful, but they do not directly specify the cognitive chain linking effort, performance, and valued outcomes. Furthermore, limited research has examined transformational leadership and KPI systems simultaneously in a public transportation context.
Novelty: This study focuses specifically on expectancy-based motivation as the mediating mechanism and examines transformational leadership and KPI systems simultaneously in a public transportation context. It extends expectancy theory from an individual-level motivational explanation to an integrated organizational model where leadership and KPI architecture function as antecedents of expectancy, instrumentality, and valence.
Method: A quantitative cross-sectional survey was analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) in SmartPLS. The measurement model was assessed through convergent validity and reliability, while the structural model was evaluated through path coefficients, indirect effects, and R-square.
Results: Transformational leadership positively affects employee performance (β=0.276) and expectancy-based motivation (β=0.489). KPI systems positively affect employee performance (β=0.241) and expectancy-based motivation (β=0.352). Expectancy-based motivation positively affects employee performance (β=0.418). The indirect effects of transformational leadership (β=0.204) and KPI systems (β=0.147) through expectancy-based motivation are significant, indicating partial mediation. The model explains 64.2% of the variance in expectancy-based motivation and 71.1% of employee performance.
Conclusion: Public transportation organizations should combine transformational leadership with transparent, fair, and behaviorally balanced KPI systems, supported by coaching, feedback, recognition, and ethical safeguards. The findings extend expectancy theory by showing that leadership and KPI design operate as organizational antecedents of expectancy, instrumentality, and valence perceptions in a public-service setting.
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