Leading depleted employees: exploring the boundaries of transformational leadership

Given the importance of the employee–supervisor relationship, much research has focused on understanding the relationship between transformational leadership and its positive outcomes such as employee well-being and reduced turnover intentions. However, research findings related to transformational leadership more broadly are mixed, which suggests an ongoing need to understand its boundary conditions. This manuscript examines psychological distress as a potential boundary condition of the relationship between transformational leadership, well-being and turnover intentions.

Drawing on the Conservation of Resources theory, we investigate how employee psychological distress may weaken the positive relationship between transformational leadership, employee well-being and turnover intentions. We present two studies that investigate whether employees’ psychological distress moderates the relationship between transformational leadership and employee well-being (Study 1), and subsequent turnover intentions (Study 2).

Results from Study 1 (N = 161) suggest that psychologically distressed employees derive no benefits in well-being from transformational leadership, in comparison to employees who are average or low in psychological distress. Study 2 (N = 382) replicates this result and further suggests that employee well-being mediates the relation between transformational leadership and turnover intentions when employee psychological distress is average or low, but not when employee psychological distress is high.

Taken together, these two studies suggest that transformational leadership, despite its many benefits, has limited effectiveness for employees experiencing high levels of psychological distress. These studies advance theory by identifying psychological distress as a moderator of this popular leadership style. Further, our findings offer practical value for organizations and leaders seeking to better support psychologically distressed employees, identifying several human resource implications for employee-supervisory relationships.