Transformational leadership, idiosyncratic deals and employee outcomes

Abstract

PurposeTransformational leadership (TFL) has been suggested to create positive changes in employees with the goal of developing them into leaders. The authors integrate this well-established leadership style with recent research on idiosyncratic deals (i-deals). The authors suggest TFL as a predictor of task and development-based i-deals, and propose i-deals as a mediating mechanism linking TFL to employee outcomes (job satisfaction, job stress and manager-rated performance).Design/methodology/approachThe authors used a time-lagged research design, and collected four waves of data from 140 employees and 78 leaders.FindingsTFL was found to be an important predictor of i-deals. I-deals predicted job satisfaction and job stress; and it mediated the relationship between TFL and these two employee outcomes. Yet, i-deals were not associated with employee performance and did not mediate the relationship.Originality/valueFirst, it shows that transformational leaders who consider employees' unique skills and support their professional growth are more likely to grant personalized arrangements. Second, drawing from social exchange theory, it illustrates that i-deals may act as a linkage between TFL and employee outcomes. The paper bridges leadership and i-deals literature to identify key leverage points through which leaders can enhance employee satisfaction, well-being and performance.