Democratic leadership and organizational performance: the moderating effect of contingent reward

Abstract

Purpose: The purpose of this study is to investigate the moderating effect of contingent reward on the relationship between democratic leadership and organizational performance. Design/methodology/approach: Explanatory and cross-sectional survey designs were used. A quantitative research approach was also adopted to collect the data from 476 employees in the telecommunication industry. Using statistics package for social science, the data was analyzed via descriptive statistics, correlation and hierarchical regression techniques. Findings: The results reveal that both democratic leadership and contingent reward have a significant positive relationship with organizational performance. Furthermore, contingent reward significantly augments and moderates the relationship between democratic leadership and organizational performance. Thus, the combination of democratic leadership and contingent reward would more likely produce higher organizational performance. Originality/value: This study has made a significant contribution to leadership and organizational literature by establishing the effectiveness of contingent reward as a moderator on the relationship between democratic leadership and organizational performance in a telecommunication industry.