Academy of Entrepreneurship Journal (Print ISSN: 1087-9595; Online ISSN: 1528-2686)

Research Article: 2021 Vol: 27 Issue: 6

The Influence of Transformational Leadership and the Work Environment On Employee Performance: Mediating Role of Discipline

Setyo Riyanto, Universitas Mercu Buana

Endri Endri, Universitas Mercu Buana

Abdul Hamid, Universitas Mercu Buana

Citation Information: Riyanto, S., Endri, E., Hamid, A. (2021). The influence of transformational leadership and the work environment on employee performance: mediating role of discipline. Academy of Entrepreneurship Journal, 27(6), 1-11.


The research aims to analyze the level of influence of the application of transformational leadership style, work environment on the work discipline of civil servants in the Ministry of Villages, Disadvantaged Regions and Transmigration of the Republic of Indonesia (KemendesPDTT) and its impact on employee performance in dealing with frontier, outermost and disadvantaged areas in the territory of the State Republic of Indonesia. The research design used was an associative explanative research with a survey method. The study population was all PNS Kemendes-PDTT. Respondents were selected using purposive sampling technique. The number of respondents in this study were 116 people. Data processing uses Structural Equation Modeling (SEM) with the Partial Least Square (SmartPLS) version 3.0 program. The research was conducted from January 2020 to July 2020. The empirical findings of the study reveal that with a transformational leadership style and work environment, both through the process of establishing employee discipline and directly affecting the performance of civil servants at the Ministry of Villages, Disadvantaged Areas and Transmigration. Republic of Indonesia (Kemendes-PDTT)


Work Environment, Discipline, Leadership, Employee Performance.


Development in the frontier, outermost and underdeveloped areas in Indonesia is currently the focus of the Government of the Republic of Indonesia, whose implementation is carried out by the Ministry of Villages, Disadvantaged Areas, and Transmigration. However, considering the location of these areas, which are included in the frontier, outermost and underdeveloped categories, they are still relatively low, lacking facilities and infrastructure, and remote and far from various crowds; the implementation of tasks in these areas is often hampered. Many employees are reluctant to carry out their duties in these areas. Initial research conducted on civil servants at the Directorate General of Community Development shows that several fundamental reasons affect civil servants' performance responsible for development activities in frontier, outermost and disadvantaged areas, especially employee work discipline. From the observations made during this research, it appears that employees' work discipline is closely related to the leadership style of their superiors and employees' perceptions of the workplace environment. Based on existing facts on the ground, we research what factors have a direct and indirect influence on the performance of civil servants in the Ministry of Villages, Disadvantaged Areas, and Transmigration; especially in the three dominant factors that have been found from the initial research that has been done before, namely the leadership style of the superior, in this case how well the superiors apply the application of transformational leadership values in their daily Leadership in leading their subordinates, what has been the organization's efforts to create an environment. Work conducive to employees' ability to work well and what is no less important is how much employees can discipline themselves in work and submit to and obey orders from their superiors according to their duties, authorities, and responsibilities.

Employee performance is considered very important to encourage higher organizational growth (Fong & Snape, 2015). Service-focused employee performance is critical to achieving business goals and maintaining a competitive edge. Previous studies have examined the effect of transformational leadership and the work environment with discipline as a mediator variable on employee performance, but still provide conflicting empirical evidence. The findings of Buil et al. (2019), Kammerhoff et al. (2019) and Luo et al. (2019) related to the relationship between transformational leadership and employee performance shows that transformational has a significant effect on employee performance. However, Eliyana et al. (2019); Razak et al. (2018) and Jaiswal and Dhar (2015) show contradictory results that transformational leadership has no significant effect on employee performance. Yamin (2020) proves that intrinsic motivation and transformational leadership can improve employee performance. Organizations face several tasks creating a dynamic and comfortable environment for employees. To deal with the changing and evolving environment and change to be successful and stay competitive, the organization needs to satisfy its employees by meeting employee needs and providing good working conditions (Riyanto et al., 2021). Managers are aware of the existence of a good work environment to optimize high job satisfaction (Permana et al. 2021). Muguongo et al. (2015) found a significant relationship between work environment and satisfaction. However, the non-conducive work environment in industrial banking in India has proven to have a negative impact on employee satisfaction (Dhamija et al., 2019). Also, Riyanto et al., (2021) found that the work environment has no effect on employee performance. The discrepancies in these findings provide further opportunities in further research to confirm these gaps. Therefore, this study is intended to examine the relationship between discipline, transformational leadership, work environment, and employee performance.

Literature Review

Work Environment

The organization's work environment is vital for management to pay attention to the work environment directly or indirectly influencing employees in carrying out their jobs (Riyanto et al., 2021). Employees' work environment can affect carrying out assigned tasks, for example, with the air conditioner (AC), adequate lighting. Nguyen et al. (2015) added that a condition related to workplace characteristics to employee behavior and attitudes could be associated with psychological changes due to things experienced in their work or certain conditions. This situation will continue as an organizational concern where work boredom, monotonous work, and fatigue can affect employee psychology. Work environments that require a high level of manager-controlled flexible scheduling require workers to be active and require managers to change schedules and allow more hours (Wood, 2018). Individuals with higher "self-focus" usually pay less attention to work environment factors and instead rely more on self-perception to make ethical decisions (Kish-Gephart et al., 2019). A friendly work environment can hardly be identified and measured (Nguyen et al., 2015). Employee development provides opportunities for employees to socialize their duties and workplaces so that training and development programs provide opportunities to help organizations (Virgiawan et al., 2021). According to this theory, when ethical leaders such as managers are present at work as role models, employees emulate them. They study desired behavior by observing how managers behave and what behaviors should be rewarded and punished. If these employees do a terrible job, they will not find good references. If the organization leaves its employees in an attractive work environment, the former employees can introduce them to their previous workplaces (Riyanto et al., 2021). This learning occurs in industrial locations in a real-world environment where real-world problem solving can be practiced. Task design is defined to include team autonomy, intra-team coordination, and task meaning. More independent teams can improve their performance by adapting to changing job requirements (Park & Park, 2019).

Employee Discipline

Discipline is compliance, appropriate behavior, and actions taken against employees who do not comply with organizational rules. Discipline is believed to be related to the use of violence and formal authority, or it can be said that "moral strengthening and self-control" (Hidayati et al., 2010). According to Figari (2011) defines discipline in two separate categories. The first category's definition reflects the original Latin roots of the word discipline, 'learning,' with a focus on developing self-mastery through teaching problem-solving skills and learning more productive ways of expressing feelings. The second category definition relates to external control, obedience to authority, and punishment. Besides, each discipline is supported by specific concepts such as "career success" and "job success," which make it difficult to clearly define and operationalize the boundaries of "success". The discipline operates on the convergence of several organizational tools, although it does not necessarily bring followers. A continuous quality improvement system, a central expression of the global managerial vision, must be translated into a specific context (Figari, 2011). Discipline and punishing, in which Foucault distinguishes power and discipline, is the starting point for discussing self-discipline. This concept is somewhat vague and requires a certain definition. Discipline means that it is related to a set of skills or knowledge. The disciplinary policy should clarify that employees have a right to know what to expect and what might happen if they violate organizational rules. It is also emphasized that the organization will treat employees following fair justice principles. In general, management disciplines have lost faith in the modernist detachment and are getting closer to engaging in 'after modern' practices (Wood, 2018).

Transformational Leadership

Leadership has a strong relationship between leaders and followers who expect real change and results that reflect their goals (Bastari et al., 2020). Organizations define leadership as "the ability to influence groups to achieve goals." This leadership style can be studied well. To achieve higher levels of sustainability in today's society requires individual action, where involves a group and then sees a positive impact that requires leadership (Vila-Vázquez et al., 2018). The leadership skills dimension refers to the character and world vision that a leader can demonstrate (Chua & Ayoko, 2019). Studies have shown that their behavioral attributes and reflective personality are important aspects. Many authors have associated strategic Leadership as an approach to developing an environment conducive to innovation to advance organizational, human, social, and structural capacities (Lai et al., 2020; Silitonga et al., 2020). Leadership is an inherently social phenomenon and can understand and respond effectively to complex social behavior (Hapsari et al., 2021; Chun et al., 2016). These traits can get a person noticed, but they must be reviewed and developed in experience. Research shows that competencies develop that appear over time and manifest themselves in different ways and situations. The origin of Leadership comes from the beliefs and values that cause a group to face internal and external problems. If what the leader proposes is successful and works, it is gradually divided into shared assumptions. Leadership is an important managerial function that helps maximize effectiveness and achieve organizational goals. Modern leadership theory has enabled organizations to create a culture of empowerment that enhances performance and leadership in the workforce (Nohe & Hertel, 2017). This behavior undoubtedly affects employees' attitudes at work, and team leadership style is one of the main factors that make or break team success (Herdman et al., 2017). Leadership is one of the most frequently discussed management phenomena. It can be traced back to the past, which is much discussed in ancient books and manuscripts. Leadership was initially considered a trait inherent in a person, occurs in individuals, is impossible to learn, and is related to genes. Leadership is believed to lead to aristocracy and monarchy because of the birthright, where power is passed from generation to generation, related to the Leadership of the dynastic family.

Employee Performance

Work performance is assessed by quality and quantity based on the work standards set by the company. Employee performance will be very good if they have high skills and have hopes for a better future (Pancasila et al., 2020). Good performance is optimal performance based on company standards and supports the achievement of company goals (Astuty & Udin, 2020). Performance is influenced by three factors: First, individual factors consisting of abilities and expertise, background, and demographics. Second, psychological factors consisting of perceptions, attitudes, personality, learning and motivation. Third, the organizational factors consist of resources, leadership, rewards, structure and design work. Job performance is the value of employee behavior that contributes to achieving organizational goals. This definition includes employee behavior that can determine which behavioral boundaries are (and are not) relevant to job performance. Performance can be divided into job performance and driver performance, especially those related to work behavior factors. Behavioral performance is mainly represented by spontaneous behavior and different workplace roles, which can be broken down into positive behaviors (such as organizational citizenship behavior) and negative behavior (Han et al., 2016). While role performance is defined as an employee's actions to meet the conventional demands of his job, extra-role performance refers to an employee's activities outside the boundaries at his discretion.

Employees who have high performance were found to have a more outstanding obligation to help the organization achieve its goals, stronger commitment, increased reward expectations for high performance, and all of these results were consistently found to be associated with increased performance in additional roles (Susanto et al., 2020). Managers and employees likely perceive performance differently across cultures, leading to cross-cultural and intercultural differences in the definition and interpretation of performance. Therefore, in an individualistic culture, emphasis will be placed on individual efforts and outcomes, requiring objective and measurable performance criteria and expected manager performance in terms of quality/quantity, longer working hours, greater responsibility and flexibility, and fewer requests for rewards in various forms. Evidence suggests that climate affects crop yields more, so a better climate is likely to increase yields. Evaluation can increase employee motivation and encourage employees to participate in innovative programs, and facilitate the achievement of desired results (Paais & Pattiruhu, 2020). Performance reviews generate feedback, and performance improvement plans help employees acquire skills that maximize their potential (Vizano et al., 2021; Setiyani et al., 2020).


The researcher analyzes the relationship between the independent variables and the dependent variable through quantitative research using survey methods. This research was conducted by measuring the indicators of the independent (exogenous) variables, namely Leadership, and work environment, and work discipline as intervening variables, while the dependent variable (endogenous) in this study was employee performance as described in Table 1 on Research indicators.

Table 1 Research Indicators
Variable   Indicators
Work Environment WL 1 Workspace lighting
WL 2 The air temperature in the workroom
WL 3 Comfortable work environment
WL 4 Work tool condition
WL 5 Workplace cleanliness
WL 6 Complete facilities at work
WL 7 Assigned task responsibilities
WL 8 Attention and support from leaders
WL 9 Cooperation between employees
WL 10 Evenly distributed workload
Work Discipline D 1 The size of the compensation
D 2 The desire to find additional outside income
D 3 Leaders become role models for subordinates
D 4 Written rules for employees
D 5 Regulation of conditions and situations
D 6 Application of rules at work
D 7 Firm Leadership and sanctions
D 8 Upright discipline
D 9 The size of the compensation
Transformational Leadership TL 1 Leaders foster confidence and trust in their subordinates
TL 2 Be admired and become a role model
TL 3 Admired Articulate a vision of the future
TL 4 Speak optimistically with enthusiasm
TL 5 Encourage the expression of ideas from subordinates
TL 6 Encourage innovative thinking
TL 7 Involving subordinates in decision making
TL 8 Taking into account the needs of subordinates, abilities
TL 9 Listen to the suggestions of subordinates attentively
TL 10 Advise, teach and train
Employee Performance EP 1 Take part in training
EP 2 Explanation of the employee's work position
EP 3 Instructions to employees
EP 4 Provide excellent service to the community
EP 5 Complete work effectively and efficiently
EP 6 Always prioritize quality in providing services
EP 7 Follow the development of science and technology
EP 8 Add knowledge, skills to carry out tasks
EP 9 Ready to perform tasks
EP 10 Maintain cooperation between agencies
EP 11 Work excitedly to pursue the targets

Results and Discussion


Discriminant Validity is obtained by comparing the coefficient of AVE Root or Square Root Average Variance Extracted from each variable with the correlation value more than 0.5 between variables in the model.

Table 2 shows that each variable in this study has an AVE value greater than 0.5. There is only one variable with a value of less than 0.5, namely the work environment towards transformational Leadership.

Table 2 Discriminant Validity (Fornell-Lacker Criterium)
  Discipline Employee performance Transformational leadership Work environment
Discipline 0.749      
Employee performance 0.844 0.626    
Transformational leadership 0.645 0.714 0.724  
Work environment 0.547 0.590 0.453 0.609

As shown In Figure 1, we can see the effect of indicators on each of the predetermined variables. Based on the study results, it can be concluded that employee discipline has a very strong influence on employee performance compared to transformational Leadership and the work environment where the employee discipline value is above 0.5. Meanwhile, transformational leadership has a significant effect on employee discipline.

Figure 1 The Structural Model

Table 3 illustrates the level of a positive influence of transformational leadership on employee performance, which is very significant (p-value 0,000), as well as the aspect of the work environment which shows a positive and significant level of influence on employee performance but with less intensity when compared to the effect that comes from transformational leadership.

Table 3 Summary of the Structural Model
  Original Sample (O) Sample Mean (M) Standard Deviation (STDEV) T Statistics
P Values
Transformational Leadership -> Employee Performance 0.297 0.292 0.053 5.588 0.000
Work Environment -> Employee Performance 0.190 0.198 0.050 3.794 0.000


Transformational leadership either through the process of forming employee discipline or directly determining employee performance. Good leadership can be a role model for employees because it provides examples that can create admiration and motivation so that they work with discipline and full responsibility. Close collaboration between transforming leaders and disciplined employees is the key to creating the best performance. Therefore, a transformational leader must demonstrate a variety of behaviors to nurture and enhance the psychological states that contribute to job engagement. Research by Bastari et al. (2020) which makes motivation an intervening variable which reveals that transformational leadership has a significant effect on employee work performance. Employee work motivation also has a significant effect on employee performance. Lai et al. (2020) found that transformational leadership using a variety of behaviors helps to provoke the benefits of organizational followers so that it inspires active employee involvement and can create better task performance. Shaheen et al. (2020) examined the mediating role of employee engagement in relation to organizational cronyism and employee performance. The results reveal that organizational cronyism is negatively related to employee performance. The analysis confirms the mediating role of job involvement in the relationship between organizational cronyism and employee performance.

Li et al. (2019) found that transformational leadership and job involvement are significantly related to innovative work behavior. The findings also show a significant impact of transformational leadership on trust in a leader, and a subsequent positive impact on employee engagement jobs. To promote employees' innovative work behavior, leaders in organizations should strive to involve them effectively in their work by gaining trust, which can help them participate in creative activities. Breevaart et al. (2016) revealed that employees are actively involved in their work and receive higher performance ratings from their leaders when the leader uses more transformational leadership behaviors, and when employees use more self-leadership strategies. Furthermore, we show that transformational leadership behaviors are more effective when employees have a high (vs. low) need for leadership and vice versa for self-leadership. Rumaropen (2019) proves that emotional intelligence directly has a significant positive effect on transformational leadership and employee performance. Transformational leadership directly has a significant positive effect on performance. Emotional intelligence has a significant positive effect on employee performance with the mediating effect of transformational leadership. Transformational leadership is not proven as a mediating effect in analyzing the effect of emotional intelligence on employee performance. Study Findings Para-González et al. (2018) revealed that the adoption of transformational leadership styles improves performance when specific systems of HRM practices, learning and innovation are developed in an organization. Manesh et al. (2018) revealed that transformational leadership allows leaders to be able to motivate employees to implement changes effectively to improve performance.

The work environment, either through the process of establishing employee discipline or directly has a significant effect on performance. The results of the study are in line with the findings of Idris et al. (2020, Hidayati et al. (2019) and Liestiani et al. (2019) that the work environment has a positive effect on employee performance. Putri et al. (2019) research results prove that work discipline is able to mediate the influence of the work environment on employee performance. Idris et al. (2020) also concluded that job satisfaction can directly or indirectly mediate the relationship between work environment and employee performance. Managers realize the importance of a good work environment to make the best use of the level of job satisfaction. The research of Dhamija et al. (2019) actually proves that a work environment that is not conducive has a negative effect on employee satisfaction resulting in decreased employee performance. Work discipline directly determines the achievement of the best employee performance if they carry out the job with full responsibility under any circumstances. research is in line with the findings of Ferdinandus (2020) and Liestiani et al. (2019) stated that work discipline has a significant effect on employee performance. Razak et al. (2108) proved that work discipline has the greatest influence on employee performance.


The results of this study indicate that overall the implementation of transformational Leadership and the work environment, both through the process of establishing employee discipline and directly, has a significant effect on the performance of the state civil servants Ministry of Villages, Disadvantaged Areas and Transmigration of the Republic of Indonesia (Kemendes-PDTT). The most significant influence comes from how much admiration and the role model a Leader plays. The thing which is significant but has a relatively small effect is the aspect of responsibility for the tasks that have been given to employees. Good Leadership is an independent and continuous learning process, training, and relevant leadership experiences such as responsibility to the task to the goals to be achieved. Effectively anticipated and unexpected obstacles Leadership need cooperation between employee, to be a key, described as setting direction, aligning people, motivating. This illustrates that employee performance is closely related to how employees carry out work according to their responsibilities. In general, work discipline has a positive and significant effect on the performance of the employees of the Ministry of Kemendes-PDTT. Another thing that arises from this research is that employees' willingness to be ready to perform tasks in any situation is the lowest aspect. Thus, direct superiors' role as role models to always provide exemplary examples always to be ready to carry out their duties will significantly affect employees' performance level in the Ministry of Health-PDTT environment.


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