This research study seeks to examine the effect of transactional and transformational leadership styles on work
outcomes by considering banking sector of Pakistan. The focus of this research was to explore the mediation
effect of trust between leadership styles and two work outcomes i.e., organizational commitment and turnover
intention of employees. Zhu and Akhtar (2014) found out that trust plays a mediating role between
transformational leadership styles and work outcomes, so this study has proceeded their findings by focusing
on +A648another leadership style and work outcomes.
For data collection, 350 employees were selected by using purposive sampling technique from the banks
operating in Lahore. The criteria for selecting purposive sample was established so that effective results can be
obtained. Questionnaire with five point Likert scale was used for data collection because it was a comparatively
low-cost, fast and effective way of gaining huge quantity of information from a big sample. After distributing
350 questionnaires among bank employees, 304 were found properly filled and appropriate. So the response
rate for this study was 86.85% that is usually considered noteworthy. After collecting data, MS excel was used
to organize data and to check missing values and unengaged responses. SPSS was also used to check regression
assumptions and for hypothesis testing. After dealing with regression assumptions, hypotheses were tested.
To determine the mediation effect of employee trust between leadership styles and work outcomes, Sobel test
and Baron & Kenny approach was used.
The regression result exposed that transactional and transformational leadership styles has no effect on
turnover intention of employees of banks operating in Lahore. While transactional and transformational
leadership style except individual consideration dimension have significant impact on employee's
commitment. This study also found out that transformational leadership style and transactional leadership
except management by exception (passive) dimension has significant impact on employee trust.
The mediation results showed that trust mediates the relationship between transformational leadership style
and work outcomes i.e., organizational commitment and turnover intention of employees. While result of both
mediation tests also exposed that trust plays a mediating role between transactional leadership style and
organizational commitment of employees but doesn't mediate the relationship of transactional leadership and
turnover intention. In the end managerial implications, contribution of study and limitations has also been
discussed.