Original Research

The mediating role of empowerment, performance feedback and goal difficulty in the relationship between transformational leadership and employee attitudes in South Africa’s direct-selling sector

Clayton M. Stone, Leone T.B. Jackson

Received: 02 Mar. 2026; Accepted: 04 June 2026; Published: 30 July 2026

Copyright: © 2026. The Authors. Licensee: AOSIS.
This work is licensed under the Creative Commons Attribution 4.0 International (CC BY 4.0) license (https://creativecommons.org/licenses/by/4.0/).

Abstract

Orientation: The role of dispositional factors in explaining the mechanism by which transformational leadership impacts employee attitudes is over-emphasised, sometimes at the expense of utilising contextual variables to explain the relationship between leadership and employee attitudes.

Research purpose: The study examined the indirect roles of empowerment, performance feedback and goal difficulty in the relationship between transformational leadership, job satisfaction and organisational citizenship behaviour (OCB).

Motivation for the study: There is a lack of empirical research investigating the relationships among transformational leadership, job satisfaction and OCB, as well as the indirect roles of empowerment, performance feedback and goal difficulty in these relationships.

Research approach/design and method: Following a positivist paradigm and quantitative approach, managers completed questionnaires (N = 222), and the data were analysed using SmartPLS 4.

Main findings: Transformational leadership has a positive and statistically significant effect on empowerment, performance feedback and goal difficulty. Empowerment and performance feedback also positively and significantly affect job satisfaction and OCB. Moreover, the indirect effects of the relationship between transformational leadership and job satisfaction and OCB were confirmed.

Practical/managerial implications: Poor direct links between transformational leadership and employee attitudes suggest that direct-selling organisations should focus less on promoting transformational leadership as a broad leadership style and instead on performance feedback and empowerment, which could translate into increased job satisfaction and OCB.

Contribution/value-add: This study confirms the basic assumptions of social exchange theory (SET) and highlights contextual mechanisms strengthening the influence of transformational leadership in promoting job satisfaction and OCB in the micro-franchise context.

Keywords: transformational leadership; job satisfaction; OCB; empowerment; performance feedback; goal difficulty.

Introduction

A notable characteristic of the South African economy is the dominance of a relatively small number of large firms across many sectors (Aghion et al., 2008; Fedderke et al., 2018). There is a rising need for more inclusive entrepreneurship in the country to lessen ownership concentration and broaden economic opportunities for more South Africans. Accordingly, entrepreneurship and small business growth have featured prominently in the country’s growth strategies over the years (e.g. the Accelerated and Shared Growth Initiative for South Africa (2008); the 9-point plan to boost economic growth, outlined in President Zuma’s 2015 State of the Nation Address, and the National Treasury’s 2019 Economic transformation, inclusive growth and competitiveness: Towards an economic strategy for South Africa). However, progress remains limited, with unemployment persisting and ownership concentration continuing to pose significant challenges for the country.

The franchising sector is one component of the South African economy that has been relatively overlooked in these efforts. Limited published research has examined retail trade in Africa (Makgosa et al., 2013), particularly within the micro-franchising context. This paucity of research is surprising and a gap worth filling. Findings indicate that South Africa features a much more active franchising sector than its peers, a trend that has remained consistent for several decades. Franchising plays a significant role in the country’s restaurant and retail sectors.

According to World Franchising Council survey data, South Africa records the second-highest franchising contribution to national output worldwide and is the only emerging market in the top five. The Franchise Association of South Africa (FASA) reports that the country has approximately 850 active franchisor brands, with about 4000 franchisees operating across 35 000 franchise units. It is evident that franchising is a significant contributor to formal employment in South Africa. According to FASA, approximately 500 000 employees are employed in franchised units across the country. This represents a significant section of the labour market. What remains unknown is the role that transformational leadership and situational factors can play in fostering positive employee attitudes in this sector.

Transformational leaders can facilitate change in the work environment. They can create an inspiring new vision and bring others on board because they already believe in the process. The organisation, its leaders and its employees reach their full potential when the organisational vision is effectively implemented. It therefore seems important to focus on the presence of transformational leaders to enhance change initiatives facing society (e.g. popularising enterprise ownership and active participation in the economy). Transformational leaders, through their concern for the organisation’s members and their role modelling, can greatly assist in fostering change and positive attitudes among employees.

Research suggests that transformational leadership is positively associated with employee motivation (Li et al., 2020). The relationship between transformational leadership and employee attitudes at work is also well established in the literature (Avolio et al., 2004). Although substantial research has examined leadership models, there remains a gap regarding the role of performance management activities and motivational mediators, such as goal difficulty, performance feedback and empowerment, in linking transformational leadership (the independent variable) to employee job attitudes (the dependent variable), particularly within the direct-selling and micro-franchising sector in the context of a developing country. This represents a knowledge, evidence, empirical and population research gap.

Despite the empirically established links between transformational leadership and employee job attitudes, relatively little is known about the psychological and contextual mechanisms through which these relationships operate (Castro et al., 2008). Leadership is commonly defined as a leader’s ability to motivate followers towards a shared goal, mission or vision (Chemers, 2001). It is necessary to examine how a transformational leadership style interacts with psychological processes, such as goal difficulty, performance feedback and empowerment, to understand its influence on employee attitudes.

Much of the leadership literature has traditionally emphasised the role of formal leaders, sometimes attributing employee attitudes primarily to leader behaviour while giving less attention to employee-level psychological and collective processes. This perspective may overlook the role of contextual and interactional mechanisms in shaping positive employee attitudes.

Accordingly, this study proposes that contextual psychological processes, specifically goal difficulty, performance feedback and empowerment function as mediators or moderators in the relationship between transformational leadership and positive employee attitudes, such as job satisfaction and organisational citizenship behaviour (OCB). The proposed model, therefore, offers an alternative explanation for positive employee attitudes by situating leadership effects within broader psychological and contextual mechanisms. The conceptual model is presented in Figure 1.

FIGURE 1: Proposed hypothetical model.

The proposed hypothetical model represents three parallel mediation models in which the independent variable (IV) (TL = X) affects the dependent variable (DV) (Y¹ = JS and Y² = OCB) through three mediators (performance management activities/motivators = goal difficulty [GD], performance feedback [PF] and psychological empowerment [PE]) simultaneously. If one accepts that performance management is a process and not an event (continuous throughout the year), then one would appreciate that, in practice, these three activities do not follow in a causal sequence (series mediation models) (Tofighi & Kelley, 2020).

The figure shows that transformational leadership positively impacts OCB and job satisfaction through goal difficulty, performance feedback and psychological empowerment. The assumption is based on transformational leaders’ tendencies to articulate a vision, role model, foster goal acceptance, set high performance expectations and provide support to the individuals coupled with intellectual stimulation (Podsakoff et al., 2014). All these leadership behaviours are linked to goal difficulty (setting targets in the language of the institution where the research was conducted). Leaders who provide performance feedback also facilitate fostering goal acceptance and high-performance expectations. Such leaders are likely to set standards when reflecting on people experiencing poverty. Regarding role modelling performance of subordinates, structural empowerment involves some elements of role modelling and vision articulation. Work environments that reflect such features are more likely to evoke a sense of achievement and success, foster a desire to do more than is expected and assist other employees without expecting immediate rewards in return.

Literature review

Theoretical framework: Social exchange theory

Social exchange theory (SET) is one of the most influential theories for examining work behaviour anchored in normative social interactions (Cropanzano & Mitchell, 2005). The theory suggests that social behaviour results from an exchange process aimed at optimising outcomes while reducing costs, with reciprocity as a central principle (Davlembayeva & Alamanos, 2023). Transformational leaders’ behaviours (e.g. inspiration, empowerment) support a high-quality leader-employee relationship characterised by trust and mutual respect (Bani Ahmad et al., 2024). Cropanzano et al. (2017) also propose that it is through such social relationships that leaders offer valuable resources, and that employees reciprocate by enacting discretionary positive behaviours, reflected in elevated job satisfaction, affective commitment and OCB. This perspective draws on SET to effectively frame the proposed mediation through goal difficulty, empowerment and performance feedback. This study, therefore, utilised SET to explore the relationship between transformational leadership, OCB and JS, as mediated by goal difficulty, empowerment and performance feedback.

Model predictor: Transformational leadership

Transformational leadership is defined as a leadership style that can create significant, vision-driven change in employees and an organisation. Transformational leaders display individual consideration towards employees, motivating them to perform at their best and develop their own leadership skills (Bass & Riggio, 2006). They foster a compelling vision, establish group goals and empower individuals to reach their highest potential, thereby enhancing overall commitment and performance. Transformational leaders also influence how individuals perceive themselves, inspiring them and enabling them to exceed expectations. This leadership style brings out the best in employees and motivates them to achieve optimal outcomes for the organisation (Schedlitzki & Edwards, 2014).

Model outcomes: Employee attitudes

Job satisfaction

Aziri (2011) defines job satisfaction as an employee’s sense of achievement and success. It is directly related to productivity and work performance, as well as to personal well-being. Job satisfaction means doing the work one loves, doing it well and being rewarded for one’s efforts. Job satisfaction is a positive emotional state related to a person’s perspective on their job or work experience. The advantages of job satisfaction include, but are not limited to, increased personal efforts, improved communication skills and employee abilities and increased retention, thereby contributing to the growth of an organisation (Ali et al., 2018).

Organisational citizenship behaviour

Organisational citizenship behaviour is defined as ‘work-related behaviours that are discretionary, not related to the formal organisational reward system, and in the aggregate, promote the effective functioning of the organisation’ (Bateman & Organ, 1983, pp. 588–589). A key component of this behaviour is that employees assist others without expecting immediate rewards. An organisational citizen is therefore viewed as an employee who contributes effectively to the organisation without explicit instructions from superiors or formal job requirements and without expectation of formal rewards (Munawir et al., 2019).

Model mediators

Mediators are variables that provide additional information about how or why two variables (independent and dependent) are strongly associated. According to Wu and Zumbo (2007, p. 369), in a mediation model, the independent variable (in this case: Transformational leadership) is presumed to influence the mediators (in this case: Empowerment, performance feedback and goal difficulty), which in turn influence the dependent variables (in this case: Job satisfaction and OCB). The hypothetical model proposed in this study illustrates the mediating effects of empowerment, performance feedback and goal difficulty, as depicted in Figure 1.

Empowerment

Empowerment has been defined in various ways, though most researchers agree that it involves granting employees discretion over task-related activities. Empowerment is commonly understood as a motivational process that enhances employees’ intrinsic task motivation by strengthening their sense of competence, impact, meaningfulness and choice (Thomas & Velthouse, 1990). In contemporary research, empowerment is also associated with delegation of authority, teamwork, staff training and effective communication within organisations (Al-Omari et al., 2020).

Performance feedback

Performance feedback is defined as ‘information provided by an agent regarding aspects of one’s performance and understanding’ (Hattie & Timperley, 2007, p. 81). It is also described as a formal system for evaluating and assessing an individual’s performance to determine their ability to complete tasks and meet responsibilities within a specific timeframe while maintaining productivity (Alzoraiki et al., 2023). Performance feedback enables employees to monitor their progress, adjust their strategies and regulate their level of effort. It helps clarify performance standards and expectations, reduces job ambiguity, supports goal alignment, provides recognition for good performance and enhances employees’ sense of competence.

Goal difficulty

House (1977) developed several propositions concerning the enhancing impact of challenging goals on the relationship between charismatic leadership behaviour (considered a dimension of transformational leadership according to Bass & Avolio, 1995) and follower performance. He proposed that followers would have higher levels of acceptance and satisfaction with charismatic leaders who communicate high expectations of, and confidence in, followers. Thus, high expectations communicated through challenging goals enhance the followers’ response to a charismatic leader. Transformational leaders who use inspirational motivation (considered a dimension of transformational leadership according to Bass & Avolio, 1995) use an optimistic future to provide meaning and challenge for followers. Difficult goals provide challenge. Leaders can translate their visions into tangible contributions that can be made by followers through the goal-setting process. Furthermore, employees can be expected to want to be part of such an organisation.

The relationship between empowerment, performance feedback and goal difficulty

Research indicates that empowerment is positively related to performance feedback (Baird et al., 2020; Lee & Kim, 2020) and goal difficulty (Coun et al., 2022; Joo & Nam, 2019). Research has also empirically confirmed that performance feedback is positively related to goal difficulty (Atmaja et al., 2023; De Kleijn, 2023). Evidence from previous studies confirms that goal difficulty is positively related to performance feedback (Atmaja et al., 2023; De Kleijn, 2023) and empowerment (Coun et al., 2022; Joo & Nam, 2019).

Hypothesis development

Transformational leadership and mediators

Studies have indicated that transformational leadership is positively related to performance feedback (Lee et al., 2021; Lin et al., 2020), empowerment (Cheng et al., 2023; Samuel & Engelbrecht, 2021) and goal difficulty (Ahmad et al., 2023; Li, 2022). Challenging goals also intellectually stimulate employees (a dimension of transformational leadership as described by Bass & Avolio, 1995), and once their needs are met by a considerate leader, these goals may further focus them towards higher levels of performance. It can therefore be hypothesised that:

• H1: TL positively impacts empowerment.
• H2: TL positively impacts performance feedback.
• H3: TL positively impacts goal difficulty.

Transformational leadership and employee attitudes (job satisfaction and organisational citizenship behaviour)

The value of researching transformational leadership and its consequences within a company has received significant attention in the literature. The importance stems from transformational leadership’s association with important employee outcomes. It is therefore important to examine transformational leadership, because research suggests it is positively related to JS (Chi et al., 2023; Hilton et al., 2023) and OCB (Davis et al., 2022; Dafe et al., 2026). It can therefore be hypothesised that:

• H4: TL positively impacts JS.
• H5: TL positively impacts OCB.

Mediators and employee attitudes

Previous studies have shown the relevance of focusing on empowerment, performance feedback and goal difficulty and on the consequences of these practices and why they are essential. According to the literature, it is critical to focus on empowerment and its consequences. It is essential to examine empowerment because research suggests it is positively related to JS (Akhter et al., 2021; Cruz et al., 2022) and OCB (Nauly et al., 2022; Van der Hoven et al., 2021). It can therefore be hypothesised that:

• H6: Empowerment impacts positively on JS.
• H7: Empowerment impacts positively on OCB.

It is crucial to examine performance feedback because research suggests that it is positively related to job satisfaction (Davidescu et al., 2020; Doctor et al., 2023) and OCB (Guo & Ling, 2020; Haider et al., 2019). It can therefore be hypothesised that:

• H8: Performance feedback impacts positively on JS.
• H9: Performance feedback impacts positively on OCB.

The importance stems from the association between goal difficulty and important employee outcomes. It is vital to examine goal difficulty because research suggests that it is positively related to JS (Gogoi & Baruah, 2021; Manolache & Epuran, 2023) and OCB (Faria, 2022; Ha & Moon, 2023). It can therefore be hypothesised that:

• H10: Goal difficulty impacts positively on JS.
• H11: Goal difficulty impacts positively on OCB.

The mediation role of empowerment, performance feedback and goal difficulty

Choi et al. (2016) investigated and confirmed the relationships among perceived transformational leadership, empowerment and job satisfaction in Malaysia. This means that employee empowerment not only is indispensable for enhancing job satisfaction but also mediates the relationship between transformational leadership and job satisfaction. Saira et al. (2021) empirically tested the mediating effect of psychological empowerment in the relationship between transformational leadership and OCB. The findings of the present study indicate that psychological empowerment did mediate the relationship between transformational leadership and OCB. This finding concurs with the results of Ibrahim et al. (2024). It can therefore be hypothesised that:

• H12: Empowerment mediates the relationship between TL and JS.
• H13: Empowerment mediates the relationship between TL and OCB.

The mediating role of performance feedback has been confirmed by studies that sought to explain the relationship between its variables. Results from Lee et al. (2019) found that performance feedback mediated the relationship between transformational leadership and job performance. It can therefore be hypothesised that:

• H14: Performance feedback mediates the relationship between TL and JS.
• H15: Performance feedback mediates the relationship between TL and OCB.

According to Steinmann et al. (2018), transformational leaders influence followers’ job satisfaction and proactive behaviour through the mediating role of goal difficulty. A study by Caillier (2016) established the mediating role of goal difficulty in the relationship between transformational leadership and OCB. It can therefore be hypothesised that:

• H16: Goal difficulty mediates the relationship between TL and JS.
• H17: Goal difficulty mediates the relationship between TL and OCB.

Research design

Research paradigm, method, design, population and sampling

In line with the positivist paradigm, this study used a quantitative approach, utilising a cross-sectional research survey design, with a non-probability convenience sample. The micro-franchising company where the research was conducted normally comprise of the following layers of staff: The franchisor (issues the licence to trade using their name), the business manager or distributorship and franchisee, team leaders responsible for sales (80 of them in the Republic of South Africa (RSA) with R500 000.00 sales per month), managers (those with R25 000.00 sales per month) responsible for direct-selling agents (sales units). The company (population) employs 2000 managers at any given time, and this study targeted 400 managers from five distributorships within the direct-selling micro-franchising company in South Africa. The sample size was determined using the Krejcie and Morgan (1970) formula. A population of 2000 should use a sample of 322. We targeted 400 to minimise the risk of poor internet coverage and unreliable email addresses.

Team leaders sent an information sheet (invitation, informed consent and survey link) to 400 managers via email to participate in the study. The five distributorships were targeted because Internet access was better in their areas, and they were also closer to urban areas. As a result of the nature of the product sold and the customers targeted, 89% of the company’s employees are female. The researchers collected the data via a SurveyMonkey questionnaire. Two hundred and twenty-two (222: 56% response rate) managers fully completed the questionnaire. Additional features of the participants are presented in Table 1.

Table 1 shows that most respondents were female (89.2%), aged 41–50 years (32.9%), and from the Eastern Cape (33.9%).

Research measuring instruments

The research variables were assessed using validated measurements from existing literature. Creditable psychometric properties were obtained when we tests the structured questionnaire with participants from the research population (n = 70) in a pilot run. Constructs were measured on a five-point Likert scale, ranging from 1 ‘strongly disagree’ to 5 ‘strongly agree’:

• The transformational leadership dimension was measured using the 10-item scale from Bass and Avolio’s (1995) questionnaire. A sample item from the scale: ‘My leader spends time teaching/coaching me’.
• Goal difficulty was operationalised using Wright’s (2004) five-item scale. A sample item from the scale: ‘The work objectives in my role require a great deal of effort’.
• The empowerment construct was measured using Spreitzer’s (1995) 11-item psychological empowerment scale. A sample item from the scale: ‘I have freedom in determining how to do my job as a manager’. This scale was slightly adapted by adding ‘as a manager’ to suit the context.
• Performance feedback was measured using the 10-item scale from Tsui et al. (1997). A sample item from the scale: ‘As a manager, my accuracy when performing core tasks is higher than average’. This scale was slightly adapted by adding ‘as a manager’ to suit the context.
• Job satisfaction was measured using the scale by Brayfield and Rothe (1951) and shortened to five items by Judge et al. (2000). A sample item from the scale: ‘I feel fairly satisfied with being a … manager’ This scale was slightly adapted by adding ‘as a manager’ to suit the context.
• To measure organisational citizenship behaviour, the researchers used a shortened version (only the positive five items) of a questionnaire developed by Smith et al. (1983). A sample item from the scale: ‘I assist my team leader with his or her work’. This scale was slightly adapted by adding ‘my team leader’ to suit the context.

Data analysis

The study employed SmartPLS 4.1.1.8, a partial least squares structural equation modelling and bootstrapping software to analyse the proposed parallel mediation model. Partial least squares structural equation modelling is an analytical technique that prioritises repetition; thus, it maximises the variance in endogenous latent variables (Hair et al., 2019). Partial least squares structural equation modelling is suitable for exploratory research, especially for explaining the relationships among variables in a model (Hair et al., 2019; Ringle et al., 2013). Prior to data analysis, the dataset was screened for missing values and survey quality controls. The numeric marker –99 was used to signify a missing value in the data set. There were no respondents with missing data exceeding 15% of the total indicators; therefore, no cases were removed from the dataset prior to further processing. For the remaining cases, missing values were handled using mean replacement. The overall missing data accounted for less than 2.8% of the total dataset, ensuring no substantial reduction in statistical power. No IP duplications were detected.

Assessing a measurement model helps researchers evaluate how well and appropriately the model fits the reality in the field (based on collected data). This evaluation considered internal consistency reliability, which was assessed using Cronbach’s alpha and composite reliability (CR). Convergent validity was assessed by evaluating the item’s outer loading value and the average variance extracted (AVE) value of the construct. Discriminant validity was assessed using the Fornell-Larcker criterion (Hair et al., 2019) and the Heterotrait-Monotrait ratio (HTMT). In assessing the structural model, several values were considered, including standardised root mean squared residual (SRMR), exact fit criteria were used to assess model fit, the construct’s tolerance (VIF), coefficient of determination (R²), effect size (f²) and predictive relevance (Q²) value. Bootstrap confidence intervals of the indirect effects were considered to assess mediation effects.

Ethical considerations

Ethical clearance to conduct this study was obtained from the People Management Scientific Committee of North-West University Business School and the Research Ethics Committee (FEEMS REC) Faculty of Economics and Management Sciences (Ref. No. NWU-00665-22-A4).

Results

Assessment of the measurement model

Internal consistency

Indicator reliability: The outer loading of the item should be greater than 0.708. Twelve items across four constructs (EM 5.2, EM 5.3, EM 5.9, PF 6.5, GD 4.2.3, GD 4.2.4, GD 4.2.5, OCB 3, JS 3, JS 4, JS 5 and PF 6.5) had weaker outer loadings (below 0.708). However, only six items (GD 4.2.4, GD 4.2.5, JS 3, JS 4, JS 5 and PF 6.5) were eliminated to increase the construct’s AVE value, which was below the threshold of 0.500; deleting these items met the minimum value for AVE.

However, researchers need to be careful when eliminating items with outer loadings below 0.708 and examine the effect of each item’s removal on the CR. The elimination of items should be considered only when deleting the indicator increases CR (Hulland, 1999), as was the case in this study. Therefore, Table 2 shows outer loadings below 0.708 that were not eliminated because the AVE for their construct was above 0.5. This result confirms that the model demonstrates convergent validity and that the AVE values are acceptable. The results are shown in Table 2 and Table 3.

Internal consistency reliability was evaluated through composite reliability (CR) and Cronbach’s alpha. A CR value of 0.7 or higher suggests adequate internal consistency; however, Hair et al. (2017) comment that Cronbach’s alpha (α) values above 0.60 are typically acceptable in exploratory research settings. As illustrated in Table 3, most of the scales employed in this study met the established thresholds for both Cronbach’s alpha and (CR).

Convergent reliability

According to Hair et al. (2019), convergent reliability indicates how well a measure correlates positively with other measures of the same construct. It is evaluated using the average variance extracted (AVE), which should be greater than 0.5, which was the case in this study.

Discriminant validity

Discriminant validity assessment has become a generally accepted prerequisite for analysing relationships between reflectively measured constructs. In the context of variance-based structural equation modelling, such as PLS-SEM, the Fornell-Larcker criterion and cross-loadings analysis are considered outdated methods for assessing discriminant validity. Discriminant validity was initially assessed by comparing an item’s cross-loading in the construct and its cross-loading in other constructs (attached as annexures). Screening of the cross-loadings confirmed that one item had the highest cross-loading on its own construct.

Discriminant validity was also evaluated using the Fornell-Larcker criterion (Hair et al., 2019). This method involves comparing the square roots of the AVE values with the correlations between the latent variable and other constructs. For discriminant validity to hold, the square root of the AVE for each construct should exceed its correlation with any other construct, as demonstrated in Table 4. Henseler et al. (2015) demonstrated that the Fornell-Larcker criterion and cross-loading approaches do not reliably detect the lack of discriminant validity in common research situations. They therefore propose an alternative approach, based on the multitrait-multimethod matrix, to assess discriminant validity: The heterotrait-monotrait ratio of correlations (HTMT). In PLS-SEM, all constructs correlate with the heterotrait-monotrait ratio (HTMT) and do not include 1.0.

Common method bias

Testing for common method bias (CMB) ensures that relationships in survey data are not artificially inflated or deflated by the use of the same measurement method. Researchers typically use three main statistical techniques to detect and evaluate this bias: Harman’s single-factor test, full collinearity assessment and the confirmatory factor analysis (CFA) marker technique. This study employed Harman’s single-factor test and full collinearity assessment.

Harman’s single-factor test: An exploratory factor analysis (EFA) was conducted using SPSS, forcing all study items into a single, unrotated factor. If a single factor accounts for 50% or more of the total variance, it suggests CMB is a significant issue. In this study, the first factor explained 49.2% of the variance, indicating that CMB is not an issue. This method is widely used but has been criticised for lacking statistical rigour and for providing a false sense of security.

Full collinearity assessment: This test assesses for collinearity by building an alternative model with a randomly generated marker variable and is often used in variance-based structural equation modelling (like SmartPLS 4). The variance inflation factor (VIF) for the variables used was examined, and all VIF values were less than or equal to 3.3, indicating the model is generally free from CMB (see Table 5).

Assessment of the structural model

Model fit

While PLS-SEM is primarily predictive, model fit indicates how well the model reproduces the sample covariance matrix. Standardised root mean squared residual (SRMR), exact fit criteria and normed fit index (NFI) are typically used to assess model fit. For SRMR, a good fit is indicated by values less than 0.08. The model fit was assessed using the SRMR, with a value of 0.063 (below 0.08), indicating a good fit. For NFI, values closer to 1 are better, typically 0.90. An NFI of 0.723 was obtained in this study. However, NFI is less common in PLS reporting than in covariance-based structural equation modelling (CB-SEM).

Some values were considered when assessing the structural model, namely the coefficient of determination (R²), the effect size (f²), the predictive relevance (Q²) value and the construct’s tolerance (VIF). The results of this analysis are reported in Table 5.

The R² coefficient represents the proportion of variance in the endogenous latent variable (dependent variable) explained by all independent variables linked to it. The value of f² represents the amount of contribution of the independent variable to the dependent variable in practice. Transformational leadership (TL) explained the most variance in psychological empowerment (with large practical significance) when comparing its role to the mediators in this model. As for the outcomes in the model, the predictors and mediators as exogenous variables (TL, EM, FB and GD) explained 40.4% and 39.2% (both with large practical significance) of the variance in job satisfaction and OCB, respectively, when comparing their role to the mediators in this model.

A Q² predictive value greater than zero indicates that the model fits the data well. A Q² predictive value of zero or less suggests the model lacks predictive relevance, which is not the case in this study. Table 5 also shows that the VIF values were higher than 0.2 but lower than 5.0. Therefore, the construct in this study could not be eliminated or combined with other constructs to address collinearity problems (because the independent variable explained the same variance as the dependent variable). As the VIF values were less than or equal to 3.3, the model is generally considered free of CMB.

The following section provides answers to the stated hypothesis.

Structural equation modelling was used to test the hypotheses above, and the results are shown in Figure 2 below.

FIGURE 2: Structural equation modelling output path relationships.

Direct effects

Table 6 shows that TL significantly impacted EM (β = 0.512; p < 0.001; [0.389 – 0.618]), FB (β = 0.327; p < 0.001; [0.178 – 0.441]) and GD (β = 0.267; p < 0.001; [0.127 – 0.396]). Hence, H1, H2 and H3 were accepted. Table 6 also suggests that the paths from transformational leadership to the dependent variables, namely job satisfaction (β = 0.213; p = 0.225; [−0.053 – 0.227]), and OCB (β = 0.009; p = 0.893; [−0.113 – 0.151]), were insignificant. It can therefore be inferred that TL does not directly impact job satisfaction and OCB. Consequently, H4 and H5 were rejected.

Furthermore, empowerment significantly impacted job satisfaction (β = 0.462; p < 0.001; [0.198 – 0.690]) and OCB (β = 0.407; p < 0.001; [0.181 – 0.584]), and feedback significantly impacted on job satisfaction (β = 0.228; p = 0.015; [0.052 – 0.415]) and OCB (β = 0.302; p < 0.001; [0.134 – 0.464]). Accordingly, hypotheses H6, H7, H8 and H9 were supported. However, H10 was rejected because of the negative, non-significant relationship between goal difficulty (β = −0.122; p = 0.074; [−0.251 – 0.013]) and job satisfaction. In addition, goal difficulty did not significantly impact OCB (β = −0.03; p = 0.644; [−0.190 – 0.115]). Hence, H11 was also rejected.

Mediation: Indirect effects

This study was also interested in determining the indirect (mediating) effects of performance management activities such as goal difficulty, performance feedback and empowerment in the relationship between transformational leadership and job satisfaction and OCB. Bootstrap confidence intervals of the indirect effects were considered to assess mediation effects. The exclusion of zero (0) in the confidence intervals of the indirect effects, as well as significant indirect effects, was then considered as suggestive that the mediation role was confirmed. Table 7 presents the results of the mediation role of performance management activities, such as goal difficulty, performance feedback and empowerment, in the relationship between transformational leadership and job satisfaction and OCB.

Table 7 confirms the mediating roles of empowerment (β = 0.236, p = 0.002 [0.097 – 0.394]) and performance feedback (β = 0.075, p = 0.046 [0.016 – 0.161]) in the relationship between transformational leadership and job satisfaction. Table 7 also suggests that only the indirect effects of empowerment (β = 0.208; p < 0.001; [0.092 – 0.323]) and performance feedback (β = 0.099; p = 0.005; [0.038 – 0.173]) in the relationship between transformational leadership and OCB were confirmed. Hence, the acceptance of H12, H13, H14 and H15. Table 7 also suggests that goal difficulty (β = −0.033, p = 0.106 [−0.082 – −0.001]) did not significantly affect the relationship between transformational leadership and job satisfaction. Goal difficulty (β = −0.010; p = 0.670; [−0.059 – 0.031]) also did not significantly affect the relationship between transformational leadership and OCB, hence, the rejection of H16 and H17. All accepted hypotheses represent full mediation models because the direct relationships between the independent variable and the model outcomes (employee attitudes) were found to be insignificant.

Discussion

This study aimed to determine the relationships between variables. In addition, it intended to determine the indirect (mediating) effects of performance management activities such as goal difficulty, performance feedback and empowerment on the relationships between transformational leadership and job satisfaction and OCB.

The results suggest that transformational leadership significantly impacts empowerment, performance feedback and goal difficulty. This finding aligns with previous studies that have confirmed this relationship. Studies have additionally indicated that transformational leadership is positively related to performance feedback (Lee et al., 2021; Lin et al., 2020), empowerment (Cheng et al., 2023; Samuel & Engelbrecht, 2021) and goal-setting (Ahmad et al., 2023; Li, 2022). Transformational leaders are linked to empowerment because they provide an inspiring shared vision, individualised support and encourage innovative thinking, which directly boosts employees’ feelings of significance, competence and self-determination (Dust et al., 2014).

Transformational leadership and feedback are intrinsically linked, as transformational leaders foster an open, trusting environment that encourages employees to seek and act on feedback for growth. These leaders use regular, constructive and developmental feedback to inspire performance, build confidence and foster a culture of continuous improvement (Wang et al., 2016). As for the link between TL and GD, the results align with Steinmann (2018), who argues that transformational leaders communicate goals that are challenging and achievable, which boosts employee motivation to pursue them. It is also suggested that followers adopt organisational goals as their own, leading to higher levels of self-concordant motivation. This narrative suggests that, in line with SET, employees will reciprocate with positive attitudes at work if the working environment includes positive psychological features such as empowerment, performance feedback and challenging goals.

Transformational leadership did not significantly impact the dependent variables, namely job satisfaction and OCB. These findings are contrary to those of previous studies on job satisfaction (Chi et al., 2023; Hilton et al., 2023) and OCB (Dafe et al., 2026; Davis et al., 2022). While transformational leadership is generally associated with positive outcomes, the link between it and job satisfaction can be weak in certain contexts because of factors such as burnout from high demands, excessive change, high power distance culture and the failure of leaders to address foundational needs like compensation (Puni et al., 2018).

Much of the literature suggests a positive link between transformational leadership and OCB; however, some studies report weak or non-significant relationships. This inconsistency often arises because the impact of TL on voluntary behaviour is not always direct and is highly dependent on mediating factors, context and follower personality. A study of multinational corporations in Ghana found no significant direct link between TL and OCB, suggesting that the relationship is likely indirect rather than a direct cause-and-effect mechanism (Adjoa, 2018). This finding can also be explained by the lack of, or limited, direct supervision that characterises the micro-franchising context.

Empowerment was found to significantly impact job satisfaction and OCB. This finding concurs with previous research indicating that empowerment is positively related to job satisfaction (Akhter et al., 2021; Cruz et al., 2022) and OCB (Nauly et al., 2022; Van der Hoven et al., 2021). Similarly, performance feedback was found to substantially affect both job satisfaction and OCB, consistent with earlier studies showing positive relationships with job satisfaction (Davidescu et al., 2020; Doctor et al., 2023) and OCB (Guo & Ling, 2020; Haider et al., 2019). Goal difficulty was found to have a negative, non-significant relationship with job satisfaction and a non-significant impact on OCB. This finding is inconsistent with prior research, which reports positive associations between goal difficulty and job satisfaction (Gogoi & Baruah, 2021; Manolache & Epuran, 2023), as well as OCB (Faria, 2022; Ha & Moon, 2023).

Empowerment enhances job satisfaction through key factors such as increased autonomy (a feature of the micro-franchising context: Control over work methods), access to information and opportunities to learn and grow. Empowerment and OCB were found to be positively and significantly linked, because empowered employees – those with autonomy, competence and meaningful work – are more likely to voluntarily go above and beyond their job descriptions to help the organisation. Empowerment serves as a catalyst for OCB by fostering feelings of ownership and commitment (Bhardwaj et al., 2025). Performance feedback acts as a key motivator for employees to go above and beyond their formal job requirements. Regular, constructive feedback boosts job satisfaction, commitment and perceived fairness, which, in turn, encourages employees to engage in discretionary, helpful and cooperative behaviours (Tagliabue et al., 2020).

Goal difficulty and OCB are linked through a complex, often indirect relationship: Specific, challenging goals can increase formal performance but may reduce OCB by consuming employee energy. While goals provide focus (increasing altruism), they can also limit discretionary effort (lowering compliance) if employees feel overburdened (Vigoda-Gadot & Angert, 2007). Research shows that goal difficulty usually has a positive effect on job satisfaction, as setting clear, challenging and attainable goals increases employee engagement, motivation and performance; however, overly challenging goals can increase strain, reduce perceived success and negatively affect job satisfaction (Schkolski, 2025).

In addition, the study sought to determine the indirect (mediating) effects of performance management activities such as goal difficulty, performance feedback and empowerment on the relationship between transformational leadership, job satisfaction and OCB. This means that performance feedback and empowerment are imperative to the relationship between transformational leadership, job satisfaction and OCB in this sample.

The findings of this study are consistent with the results of Choi et al. (2016), who empirically confirmed that empowerment mediates the effect of transformational leadership on job satisfaction. In addition, these findings are consistent with those of Ibrahim et al. (2024) and Saira et al. (2021), who empirically tested and confirmed the indirect effect of psychological empowerment in the relationship between transformational leadership and OCB. This means that empowerment is salient for the relationship between TL and OCB.

The importance of OCB could be related to the fact that various TL behaviours, such as increased performance expectations and increased goal acceptance, are facilitated by setting an example (role modelling), individual support and intellectual stimulation. If this is the case, according to SET, employees will reciprocate with positive attitudes at work when they experience positive features in the work environment, thereby enhancing job satisfaction and OCB.

The same argument could be advanced for performance feedback as being significant in the relationship between TL and job satisfaction and OCB. The argument can also be strengthened by viewing performance feedback as a workplace resource through the lens of the job demand and resources model (JDRM). It is argued that resources support well-being, while demand leads to ill health (Jackson et al., 2006). Previous studies also support the indirect impact of performance feedback. Lee et al. (2021) confirmed that performance feedback mediates the relationship between work engagement and turnover intention. Lee et al. (2019) observed that performance feedback mediates the relationship between transformational leadership and job performance.

The present study confirms the significant impact of performance feedback on the relationship between transformational leadership, job satisfaction and OCB. The results also suggest that the indirect effects of goal difficulty in the relationship between transformational leadership and OCB could not be confirmed. All accepted hypotheses represent full mediation models because the direct relationships between the independent variable and the model outcomes (employee attitudes) were found to be insignificant. The near-absence of direct contact between managers and team leaders may also explain the insignificant indirect effects of transformational leadership on employee attitudes.

Theoretical implications

The significance of this study can be viewed from different perspectives. This study is based on and underpinned by the expectations and assumptions of the social exchange theory (SET), which is one of the most reputable psychological theories for clarifying exchanges and interactions between individuals and their organisations (Ng, 2023). This theory explains the development and demonstration of positive attitudes among employees toward their employers and organisations. The theory posits that the employer–employee relationship is determined by employers’ perceptions of their benevolence, as reflected in the provision of employee-centred transformational leadership and favourable job conditions (Ahmad et al., 2022), such as empowerment, performance feedback and goal difficulty. Hence, an employee will reciprocate positively when such favourable conditions are implemented in their workplace.

Additionally, South African studies on transformational leadership are primarily focused on large corporations. This study extends the body of evidence on transformational leadership to the entrepreneurship industry. Moreover, although transformational leadership research is well established, there remains a need for research exploring the contextual mechanisms by which transformational leadership influences employee attitudes (Dahleez et al., 2021).

This study introduced empowerment, performance feedback and goal difficulty (performance management activities) as mediators and confirmed their relationships with transformational leadership, job satisfaction and OCB.

Practical implications

Firstly, the results show that transformational leadership does not have a direct relationship with employee outcomes (job satisfaction and OCB). Instead, the relationship exists indirectly through the mediators (empowerment and performance feedback). This suggests that direct-selling organisations should focus less on promoting transformational leadership as a broad leadership style and instead on specific motivators that convert to employee outcomes. In practice, leaders need to empower their employees by involving them in decision-making, giving them autonomy and promoting task ownership (Bose et al., 2021). This is especially important in a direct-selling context, where individuals are self-motivated and function independently.

Secondly, the findings indicate that performance feedback is a notable mediator of both relationships: Between TL and job satisfaction and between TL and OCB. This underscores the importance of continuous, well-structured communication between employers and employees (Zheng et al., 2012). There is not much formal, structured supervision in the direct-selling environment, so regular feedback will help maintain engagement, clarify roles and strengthen desired behaviours. Organisations can enhance the quality of performance feedback by providing communication training courses, coaching programmes, job aids and learning projects to their managers and employees (Zheng et al., 2012).

Thirdly, this research suggests that goal difficulty can sometimes have counterproductive effects, especially on job satisfaction. This proposes that unreasonably high-performance targets that do not align with employees’ abilities may negatively affect employee well-being in direct-selling settings, where the pressure to perform is already high.

Fourthly, as a result of the specific nature of the sample, these practical implications are most relevant to direct-selling companies characterised by independent, results-driven frameworks. Care should be taken not to generalise these results to conventional organisational settings.

Limitations

The researchers accept that the present study was not without its faults. The quantitative cross-sectional research approach examined transformational leadership, mediators and employee outcomes at a single point in time; thus, a cause-and-effect relationship could not be tested (Schofield, 2009). Although relationships were established, the cross-sectional design means that the sequence of events, reciprocal effects or other factors not included in the study can also not be ruled out. Future studies could overcome this limitation by using longitudinal or experimental research designs investigating the effect of transformational leadership on employee outcomes through specific mediators over time.

Moreover, as the study used a convenience sampling approach involving managers from a direct-selling company in South Africa, generalising the findings to other organisational settings and industries is unfortunately not possible. In addition, the selected company specialises in the direct sale of food storage containers and therefore has predominantly female sales agents and managers, further limiting the generalisability of the sample. The relationships and leadership dynamics in a direct-selling setup may differ from those in conventional corporate structures.

Additionally, the study’s relatively small sample size increased the risk of sampling and volunteer bias, as those who chose to complete the survey questionnaire may have had different views from those who chose not to participate. Future studies should consider larger and more diverse samples drawn from different organisations in South Africa. Probability-based sampling or a mixed-methods approach could also be used to enhance external validity and the study’s broader relevance.

As the study employed a self-report survey method, issues related to measurement validity and CMB may have influenced the findings. The positive association between transformational leadership, mediators and employee outcomes may be partly because of single-source bias rather than a true relationship. While incorporating individual variables such as age, gender and education as mediating or moderating factors in future studies could add more context, it will, unfortunately, not mitigate method bias. This study employed Harman’s single-factor test and a full collinearity assessment to rule out the presence of CMB. The researchers also suggest that this design-related shortcoming be tested for in all future studies of this nature.

Future research could consider other procedural and statistical approaches to mitigate CMB, such as removing common-scale properties, balancing positive and negative items, or including reversed-coded items. Researchers could also collect data from multiple sources, such as managers and sales agents; use temporal separation between predictor and employee outcome measures; include the unmeasured latent factor technique or possibly add a confirmatory factor analysis marker technique as suggested by Podsakoff et al. (2014). The measurement instruments also need to be applied to other direct-selling contexts, using larger sample sizes in South Africa, to ensure the results are generalisable in this sector of the country.

Further studies could also extend the conceptual framework of the research by examining other situational (e.g. trust, communication and tools of the trade) and dispositional factors (e.g. locus of control, self-efficacy and self-esteem) as well as other leadership styles, such as servant leadership, authentic leadership or transactional leadership, to investigate whether similar correlations develop across different leadership approaches.

Conclusion

Findings from this study indicate that transformational leadership (TL) is indirectly associated with employee attitudes such as job satisfaction and OCB through mediators, including performance management activities and motivational variables (i.e. performance feedback and empowerment). Transformational leadership was found to be poorly associated with job satisfaction and OCB and negatively associated with goal difficulty, suggesting that excessively high goals that do not match employees’ abilities could have a detrimental effect on employee attitudes.

This empirical submission highlights the salience of performance feedback and empowerment for the relationship between TL and job satisfaction and OCB, respectively. The use of TL, performance management activities and motivational variables (i.e. performance feedback and empowerment) as tactics for strengthening micro-franchising enterprises, therefore, seems a viable option for enhancing enterprise ownership among a broad spectrum of the lower-skilled population.

Finally, this study introduced and successfully demonstrated that empowerment and performance feedback (performance management activities) serve as psychological mechanisms (mediators) that could explain the relationships among transformational leadership, job satisfaction and OCB. This study thus confirms the importance of situational factors in explaining TL’s impact on employee attitudes.

Acknowledgements

This article is based on research originally conducted as part of Clayton Mark Stone’s doctoral thesis titled ‘Investigating the mediating effects of situational variables in the relationship between leadership and employee attitudes in the retail sector’, submitted to the North-West University Business School, Faculty of Economics and Management Sciences, North-West University in 2026. The thesis is currently unpublished and not publicly available. The thesis was supervised by Leone T.B. Jackson. The thesis was reworked, revised and adapted into a journal article for publication. The author confirms that the content has not been previously published or disseminated and complies with ethical standards for original publication.

Competing interests

The authors declare that they have no financial or personal relationships that may have inappropriately influenced them in writing this article.

CRediT authorship contribution

Clayton M. Stone: Investigation, Methodology, Project administration, Resources, Visualisation, Writing – original draft. Leone T.B. Jackson: Conceptualisation, Data curation, Formal analysis, Software, Supervision, Writing – review & editing. All authors reviewed the article, contributed to the discussion of results, approved the final version for submission and publication and take responsibility for the integrity of its findings.

Funding information

This research received no specific grant from any funding agency in the public, commercial or not-for-profit sectors.

Data availability

The data that support the findings of this study are available from the corresponding author, Clayton M. Stone, upon reasonable request.

Disclaimer

The views and opinions expressed in this article are those of the authors and are the product of professional research. It does not necessarily reflect the official policy or position of any affiliated institution, funder, agency or that of the publisher. The authors are responsible for this article’s results, findings and content.

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