International Journal of Modern Engineering and Management

Employee Engagement as a Mediator Between Transformational Leadership, HR Practices and Organizational Performance: Empirical Evidence from Indian Corporate Sector

Author(s):

Deepa Agarwal, Ramesh Vellipalli

Affiliation: Department of Business Administration, Gitam University, Visakhapatnam, Andhra Pradesh, India

Page No: 55-62-

Volume issue & Publishing Year: Volume 3, Issue 5, 2026/05/14

Journal: International Journal of Modern Engineering and Management | IJMEM

ISSN NO: 3048-8230

DOI: https://doi.org/10.5281/zenodo.20426706

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Abstract:

Employee engagement has emerged as one of the most widely studied constructs in contemporary organisational behaviour research, consistently demonstrating strong associations with firm-level performance outcomes including productivity, profitability, customer satisfaction, and employee retention. Despite this empirical consensus in Western management literature, the mechanisms through which antecedent organisational factors — specifically transformational leadership behaviour and strategic human resource practices — influence employee engagement, and the subsequent mediating role of engagement in translating these antecedents into measurable organisational performance gains, remain insufficiently examined within the Indian corporate context, characterised by hierarchical authority structures, collectivist cultural norms, and rapidly evolving workforce expectations driven by demographic generational shifts. This study develops and empirically tests a theoretically grounded mediation model — rooted in Social Exchange Theory, Conservation of Resources Theory, and Self-Determination Theory — in which employee engagement mediates the relationships between transformational leadership, HR practices, and two organisational outcomes: overall performance (balanced scorecard composite) and turnover intention. Structured questionnaire data were collected from 556 full-time employees across five industry sectors — IT/technology, manufacturing, healthcare, banking, and retail — spread across eight Indian cities using stratified random sampling. Exploratory and confirmatory factor analyses confirmed scale reliability and validity (all Cronbach's α ≥ 0.847; AVE ≥ 0.587; CFI = 0.96). Structural Equation Modelling (SEM) using AMOS 24.0 revealed that both transformational leadership (β = 0.51, p < 0.001) and HR practices (β = 0.44, p < 0.001) significantly predicted employee engagement, which in turn strongly predicted organisational performance (β = 0.63, p < 0.001) and negatively predicted turnover intention (β = −0.57, p < 0.001). Bootstrap mediation analysis (1,000 samples) confirmed significant full mediation of the HR practices–performance relationship and partial mediation of the transformational leadership–performance relationship through employee engagement. Sector-moderated analysis revealed that the engagement–performance path is significantly stronger in knowledge-intensive sectors (IT, healthcare) than in transactional sectors (retail, manufacturing), with practical implications for differentiated HRM strategy across Indian industry verticals.

Keywords:

employee engagement, transformational leadership, HR practices, organizational performance, turnover intention, structural equation modelling, mediation, India, Social Exchange Theory, Conservation of Resources Theory

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