International Journal of Business Management and Economic Review

Vol. 5, No. 02; 2022

ISSN: 2581-4664

THE EFFECT OF TRANSFORMATIONAL LEADERSHIP ON EMPLOYEE

PERFORMANCE AND ORGANIZATIONAL PERFORMANCE MEDIATED BY JOB
SATISFACTION AND ORGANIZATIONAL COMMITMENT OF BANDA ACEH PLN
CUSTOMER SERVICE IMPLEMENTATION UNIT

Mawaddah Warahmah, Hamdi Harmen and T. Meldi Kesuma

Management Department, Universitas Syiah Kuala, Indonesia

http://doi.org/10.35409/IJBMER.2022.3367

ABSTRACT
This study aims to measure the effect of transformational leadership on employee performance
and organizational performance mediated by job satisfaction and organizational commitment. This
study was conducted at the State Electricity Company (PLN), in the customer service
implementation unit (UP3) at Banda Aceh (PLN UP3 Banda Aceh). The research population was
150 people, where the entire population was a permanent employee and has worked for more than
3 years. The Census method was used to determine the number of samples. Data was collected by
distributing questionnaires. The research model was analyzed using Structural Equation Modeling
(SEM). The results conclude that transformational leadership affects satisfaction, commitment, the
performance of PLN UP3 Banda Aceh employees, and PLN UP3 Banda Aceh performance;
Satisfaction affects the performance of PLN UP3 Banda Aceh employees and PLN UP3 Banda
Aceh performance; commitment affects the performance of PLN UP3 Banda Aceh employees and
PLN UP3 Banda Aceh performance; Satisfaction mediates the role of transformational leadership
on performance of PLN UP3 Banda Aceh employees and PLN UP3 Banda Aceh performance; and
commitment mediates the role of transformational leadership on performance of PLN UP3 Banda
Aceh employees and PLN UP3 Banda Aceh performance. The results of this test succeeded in
formulating the function of improving the performance of PLN UP3 Banda Aceh, which is a
function of strengthening transformational leadership, strengthening commitment, and improving
the performance of PLN UP3 Banda Aceh employees. These findings become the basis for
supporting further research that can be developed by adding variables such as corporate citizenship
behavior and employee empowerment.

Keyword: Transformational Leadership, Job Satisfaction, Organizational Commitment,

Employee Performance, Organizational Performance.

1. INTRODUCTION
PLN (Persero), as a State Electricity Company in Indonesia, or commonly referred to as PLN
is one of the companies engaged in the supply of electrical energy in Indonesia. As a State-Owned
Enterprise (BUMN), PLN is required to provide electrical energy for the needs of the community.
In the context of public services, the customer service implementation unit (UP3) of PLN of Banda
Aceh City (PLN UP3 Banda Aceh) of course must provide good service. However, it turns out that

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there are still complaints from the public regarding services at PLN UP3 Banda Aceh, namely that
there are still field officers who are arrogant and also impolite in serving customers. This will also
have an impact on the performance of PLN where the many complaints will tarnish the image of
PLN in the eyes of the public.
From the results of the assessment of employee performance at PLN UP3 Banda Aceh City,
it is known that there has been a decline from 2019 to 2020 wherefrom all aspects of the assessment
an average value of 78 in 2019 and 69 in 2020. This value is not following the regulations
applicable to Regional PLN. Aceh. This also has a direct impact on organizational performance
where the summary value becomes an assessment of the organization as a whole. The factors that
affect the performance of both employees and the organization of PLN UP3 in Banda Aceh City
are strongly influenced by factors of leadership style, employee job satisfaction, organizational
commitment.
Secondary data from the HR department at the PLN UP3 Banda Aceh office revealed that
several problems identified employee dissatisfaction and lack of commitment by employees. This
is indicated by the level of absenteeism or absenteeism of employees increasing every year with
the largest percentage in 2018 of 16.25%. This means that employee absenteeism reaches a
percentage of more than 15% and the standard set by the company for the number of employee
attendance per month should not be less than 85%. In addition to the level of employee absenteeism
or absenteeism, satisfaction indicators include employee turnover. The turnover rate at PLN UP3
Banda Aceh reached 4.8% in 2018. The same thing is also shown from the level of commitment
owned by employees wherein 2020, the level of commitment of PLN UP3 Banda Aceh employees
only got a score of 62.5% of the target of 100 %. This indicates that there is something that must
be improved from the commitment of its employees.

2. LITERATURE STUDY
Employee Performance
According to (Edison, Riyanti, & Yustiana, 2016) Performance is the result of a process
that refers to and is measured over a certain period. (Soetrisno, 2016) mentions many factors
that affect employee performance, one of which is effectiveness and efficiency, authority and
responsibility, discipline, and initiative. (Dessler & Angelica, 2016) using three basic
dimensions in assessing employee performance, namely achievement of numerical goals,
achievement of basic work, and mastery of competence. Performance appraisal is a method
used to assess the work performance of an employee whether he or she has achieved the work
target assigned to him (Lie & Siagian, 2018). To be able to continuously improve employee
performance, a supervisory team is needed from each implementing department. This is because
to ensure the level of activity passed by employees is following applicable procedures and
regulations.

Organizational Performance
(Bangun, 2012) and (Sembiring, 2012) revealing organizational performance is the result
of work during a certain period compared to various possibilities. (Boyatzis, 1982) mentions that
three main factors affect performance, namely, individuals in the organization, the organizational
environment, and roles & tasks. Improved organizational performance is strongly supported by the
strategic ability of the leadership in directing and moving its members towards the expected goals

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(Boyatzis, 1982).

Job Satisfaction
Job satisfaction is an employee's attitude towards work related to the work situation, which
involves physical and psychological factors (Supartha, Parwita, & Bayu, 2013). According to (Lie
& Siagian, 2018) and (Kreitner & Kinicki, 2014), there are four aspects of work that most
influence job satisfaction, namely compensation, benefits, job security, and work-life balance, all
of which relate to the ability of employees to meet their basic needs. (Luthans, 2013) stated that
satisfaction is a favorable or unfavorable emotional state with which employees perceive their
work. Job satisfaction in this research is often mentioned as satisfaction.

Organizational Commitment
Organizational commitment, or in this research will also often be called commitment,
reflects the degree to which a person recognizes an organization and is committed to its goals
(Krajcsák, 2018);(Maiti & Sanyal, 2018). Organizational commitment can be defined as an
employee's self-identification of the organization where they work by adopting the principles,
goals, and values of the organization, then trying to achieve organizational benefits and wanting
to continue working with the organization (Kalkavan & Katrinli, 2014). Organizational
commitment is a sense of belonging and psychological relationship from employees to the
organization or the involvement of emotional relationships between employees and the
organization to establish a working relationship (Bakhshi & Kumar, 2011). Organizational
commitment is a level of recognition of employees of an organization with goals, and expectations
to maintain good relations between employees and the organization (Eliyana, Ma’arif, & Muzakki,
2019).

Transformational Leadership
An organization will succeed or even fail largely determined by leadership (Thoha,
2010);(Megheirkouni, 2017). Transformational leadership is an approach taken by organizational
leaders to motivate employees to identify organizational goals and interests to work following the
expectations desired by the leader (Buil, Martínez, & Matute, 2019). Transformational Leadership
is a leadership style in establishing relationships with followers (employees) to gain the trust and
respect of the leader, then Transformational Leadership to motivate work more than the
expectations of employees to achieve organizational goals (Boamah, Laschinger, Wong, & Clarke,
2018). According to (Ancok, 2012) describes the four dimensions of transformational leadership,
namely: idealized influence, intellectual stimulation, individual concern, and inspirational
motivation.

Framework
The research framework can be described as follows.

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Job Satisfaction
H5
H3 H9
H10
H6 Employee
Performance
H1
Transformational
Leadership
H2 H11
Organizational
Performance

H7 H
12

H4
H8
Organizational
Commitment

Figure 1. Thinking Framework

Hypothesis
H1 = Transformational leadership affects the performance of PLN UP3 Banda Aceh employees.
H2 = Transformational leadership affects the performance of the PLN UP3 Banda Aceh
H3 = Transformational leadership affects Satisfaction of PLN UP3 Banda Aceh employees.
H4 = Transformational leadership affects Commitment of PLN UP3 Banda Aceh employees
H5 = Satisfaction affects the performance of PLN UP3 Banda Aceh employees
H6 = Satisfaction affects the performance of the PLN UP3 Banda Aceh
H7 = Commitment affects the performance of PLN UP3 Banda Aceh employees
H8: Commitment affects the performance of the PLN UP3 Banda Aceh
H9: Transformational leadership affects the performance of PLN UP3 Banda Aceh employees
through the satisfaction
H10: Transformational leadership affects the performance of PLN UP3 Banda Aceh through the
satisfaction
H11: Transformational leadership affects the performance of PLN UP3 Banda Aceh employees
through the commitment
H12: Transformational leadership affects the performance of PLN UP3 Banda Aceh through the
commitment

3. METHOD
This research was carried out at PLN UP3 in the city of Banda Aceh with objects namely
Transformational Leadership, Satisfaction, Commitment, employee performance (Performance of
PLN UP3 Banda Aceh employees), and organizational performance (PLN UP3 Banda Aceh
Performance). The population was 150 respondents (employees) who work at PLN UP3 Banda
Aceh where the entire population was permanent employees and has worked for more than 3 years.
The Census method was used to determine the number of samples.
The population (as the sample) is shown in the table below :
Table 1. Population

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No Field/Position Number of people

1 UP3 Manager 1
2 ULP Manager 6
3 Marketing Manager 8
4 Network Manager 9
5 Generator Manager 15
6 Planning Manager 13
7 SPV (Supervisor) K3 14
8 SPV (Supervisor) Procurement Implementation 2
9 SPV (Supervisor) Finance 8
10 SPV (Supervisor) Logistics 3
11 SPV (Supervisor) technique 16
12 SPV (Supervisor) Construction 5
13 PDKB 14
14 Human Resource Manager 11
15 Energy transaction manager 7
16 SPV Consumption 5
17 SPV HAR 6
18 SPV technique 7
Source: PLN UP3 Banda Aceh, Year 2020

The researchers built constructs for each of the variables based on previous theories, and the
provisions that bind the measurement of employee performance and organizational performance
as presented in the following table.:
Table 2. Measurement Indicators

No Variable Indicator
1 Employee Quality of work, Quantity of work,
Performance Punctuality, Work effectiveness,
(Z1) Independence, Work commitment
(Robbins & Judge, 2017)
2 Organizational Productivity, Service Quality,
Performance Responsiveness, Responsibility,
(Z2) Accountability
(Bangun, 2012)
3 Job Job, Wage, Promotion, Supervisor,
Satisfaction Coworkers
(Y1) (Luthans, 2013)
4 Organizational Conformity of company values with
Commitment employee values, Willingness to the
(Y2) organization, Pride of the company,
Desire to survive in the company

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(Mowday et al., 2013)

5 Transformatio Analytical ability, Communication
nal leadership skill, Courage, Listening ability,
(X) Assertiveness
(Uha, 2013)

Direct hypothesis testing used Structural Equation Modeling (SEM) analysis through Amos
software (Hair, Hult, Ringle, & Sarstedt, 2016). Furthermore, indirect hypothesis testing
(mediation) was carried out using the model (Baron & Kenny, 1986).

4. RESULTS
The structural model for the effect between variables is shown as follows.

Figure 2. SEM Test Results

The results of hypothesis testing after fulfilling the SEM assumptions are revealed as
follows.

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Table 3. Test Result

Estimate S.E. C.R. P
Commitment <-- Transformational Leadership .742 .099 7.495 ***
-
Satisfaction <-- Transformational Leadership -.042 .020 2.08 .049
-
Employee <-- Transformational Leadership -5.785 2.173 -2.662 .016
Performance -
Organizational <-- Transformational Leadership -3.694 1.024 -3.607 .001
Performance -
Employee <-- Satisfaction .173 .023 7,522 ***
Performance -
Organizational <-- Satisfaction 2.350 .192 7.031 ***
Performance -
Organizational <-- Commitment 5.523 2.441 2.263 .024
Performance -
Employee <-- Commitment 8.168 3.794 2.153 .023
Performance -
Source: Primary Data, 2021 (processed)

The results in the table above explain that:

1. The role of transf. leadership on performance of PLN UP3 Banda Aceh employees
Testing Hypothesis 1 resulted in p worth 0.016. This figure <0.05 means that transf.
leadership affects the performance of PLN UP3 Banda Aceh employees. This result is in line
with the study of (Prahesti, Riana, & Wibawa, 2017) and (Djuraidi & Laily, 2020) where the
results of their study show that transf. leadership affects employee performance. For
employees, having a leader who can transform in leadership makes employees motivated and
willing to work well for the betterment of the company.

2. The role of transf. leadership on PLN UP3 Banda Aceh performance

Testing Hypothesis 2 resulted in p worth 0.001. This figure < 0.05 means that transf.
leadership affects PLN UP3 Banda Aceh Performance. The results of this test are in line with
the research (Orabi, 2016), (Ahmad & Ejaz, 2019). These results reveal that transformative
leadership practices are important for shaping performance outcomes.

3. The Role of transf. leadership on Satisfaction

Testing Hypothesis 3 resulted in p worth 0.000. This figure < 0.05 means that transf.
leadership affects satisfaction at PLN UP3 Banda Aceh. The results of this test are in line with
(Zulkarnaen & Sudarma, 2018) which also has study results that reveal transformational
leadership and compensation affects satisfaction. The application of a transf. leadership style
that includes charisma, inspirational motivation, intellectual stimulation, and individual
attention will be able to increase employee satisfaction.

4. The Role of transf. leadership on Commitment

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Testing Hypothesis 4 resulted in p worth 0.001. This figure < 0.05 means that transf.
leadership affects Commitment at PLN UP3 Banda Aceh. This result is in line with the results
of the studies conducted by (Siswatiningsih, Raharjo, & Prasetya, 2018) and (Lamidi, 2008)
that revealed transformational leadership affects commitment.

5. The role of satisfaction on the performance of PLN UP3 Banda Aceh employees
Testing Hypothesis 5 resulted in p of 0.000. This figure <0.05 means that satisfaction
affects the performance of PLN UP3 Banda Aceh employees. The results of this test are in
line with a study by (Sanjiwani & Suana, 2016) and (T. Hidayati & Rahmawati, 2016) where
they also prove that satisfaction affects employee performance. This reveals that every line of
company leadership must always pay attention to things that can grow and increase employee
satisfaction so that it will provide positive outputs for employee performance.

6. The role of satisfaction on PLN UP3 Banda Aceh performance

Testing Hypothesis 6 resulted in p of 0.000. This figure <0.05 can mean that
satisfaction affects PLN UP3 Banda Aceh Performance. According to study results (Bakotić
& Babić, 2013) reveals a clear relationship between satisfaction and organizational
performance is two-way.

7. The Role of Commitment on the performance of PLN UP3 Banda Aceh employees
Testing Hypothesis 7 resulted in p worth 0.023. This figure < 0.05 means that
Commitment affects the performance of PLN UP3 Banda Aceh employees. The results of this
test are in line with studies by (Cahyani, 2020), (Waterkamp, Tawas, & Mintardjo, 2017)
where the results of their study also reveal that commitment can improve employee
performance in the company.

8. The Role of Commitment on PLN UP3 Banda Aceh Performance

Testing Hypothesis 8 resulted in p worth 0.024. This figure < 0.05 means that
Commitment affects PLN UP3 Banda Aceh Performance. The results of this test are in line
with the results of a study conducted by (Kashefi et al., 2014) Where it is explained that
commitment plays a very important role in organizational performance.

The results of testing the indirect hypothesis are as shown in the following explanation:
1. The role of transf. leadership on performance of PLN UP3 Banda Aceh employees
through the satisfaction
To know the role of the transf. leadership variable on the performance of PLN UP3 Banda
Aceh employees through satisfaction, an analysis was carried out using the Sobel Test. The
result of the Sobel Test analysis is obtained and shown in the following results.

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Figure 3. The transf. leadership influence on the performance of PLN UP3 Banda Aceh
employees through the satisfaction

The Sobel Test analysis above shows that the significant level of the mediating variable of
satisfaction where the Sobel test score obtained is -2.0226 with the one-tailed probability that
is 0.02155 and the two-tailed probability that is: 0.04310 or search probability value < 0.05.
The results of this test are in line with the research (Putra & Surya, 2020), and (Pambudi,
Mukzam, & Nurtjahjono, 2016) wherein his research revealed that there was an indirect effect
between transf. leadership styles on employee performance through satisfaction, which was
0.334. This reveals that a good transf. leadership style will improve employee performance
along through high satisfaction.

2. The role of transf. leadership on PLN UP3 Banda Aceh performance through the
satisfaction
To know the role of the transf. leadership variable on PLN UP3 Banda Aceh performance
through satisfaction, an analysis was carried out using the Sobel Test. The results of the Sobel
Test analysis is obtained and shown in the following results

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Figure 4. The transf. leadership influence on PLN UP3 Banda Aceh performance through the
satisfaction
The Sobel Test analysis above shows that the significant level of the mediating variable of
satisfaction is -2.01217 with the one-tailed probability that is 0.02210 and the two-tailed
probability that is: 0.04420 or search probability value < 0.05. The results of this analysis are
strengthened by research (S. N. Hidayati, 2014) where the results of his study revealed that
satisfaction mediates the role of transf. leadership on PLN UP3 Banda Aceh performance.

3. The role of transf. leadership on performance of PLN UP3 Banda Aceh employees
through the commitment
To know the role of the transf. leadership variable on the performance of PLN UP3 Banda
Aceh employees through the commitment, an analysis was carried out using the Sobel Test.
The result of the Sobel Test analysis is obtained and shown in the following results

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Figure 5. The transf. leadership influence on the performance of PLN UP3 Banda Aceh
employees through the commitment

The Sobel Test analysis above shows that the significant level of the mediating variable of
commitment is 2.06920 with the one-tailed probability that is 0.01926361 and two-tailed
probability is 0.03852 or the search probability value < 0.05. These results prove that
commitment fully mediates the transf. leadership role on the performance of PLN UP3 Banda
Aceh employees.

4. The role of transf. leadership on PLN UP3 Banda Aceh performance through the
commitment
To determine the role of the transf. leadership variable on PLN UP3 Banda Aceh's
performance through the commitment, an analysis was carried out using the Sobel Test. The
result of the Sobel Test analysis is obtained and shown in the following results.

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Figure 6. The transf. leadership influence on PLN UP3 Banda Aceh performance through the
commitment

The results of the Sobel Test analysis above show that the significant level of the mediating
variable of commitment is 2.1660 with the one-tailed probability that is 0.01515 and two-tailed
probability is 0.03030 or probability value search < 0.05. These results prove that commitment
fully mediates the transf. leadership role on the performance of PLN UP3 Banda Aceh.

5. CONCLUSION
The results conclude that transformational leadership affects satisfaction, commitment, the
performance of PLN UP3 Banda Aceh employees, and PLN UP3 Banda Aceh performance;
Satisfaction affects the performance of PLN UP3 Banda Aceh employees and PLN UP3 Banda
Aceh performance; commitment affects the performance of PLN UP3 Banda Aceh employees and
PLN UP3 Banda Aceh performance; Satisfaction mediates the role of transformational leadership
on performance of PLN UP3 Banda Aceh employees and PLN UP3 Banda Aceh performance; and
commitment mediates the role of transformational leadership on performance of PLN UP3 Banda
Aceh employees and PLN UP3 Banda Aceh performance. The results of this test succeeded in
formulating the function of improving the performance of PLN UP3 Banda Aceh, which is a
function of strengthening transformational leadership, strengthening commitment, and improving
the performance of PLN UP3 Banda Aceh employees. These findings become the basis for
supporting further research that can be developed by adding variables such as corporate citizenship
behavior and employee empowerment. This finding can also be used as a basis for further policy
formulation at PLN UP3. So that in the future, to improve organizational performance, PLN UP3

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Aceh can strengthen the transformational leadership character within the company, strengthen the
commitment of its employees, and also the performance of its employees.

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