LEADERSHIP STYLES AND EMPLOYEE ENGAGEMENT: MEDIATING EFFECT OF PSYCHOLOGICAL DISTRESS IN DESPOTIC AND ETHICAL LEADERSHIP

Basharat Raza; Shrafat Ali Sair; Muhammad Shan

Basharat Raza Postdoctoral Researcher, Department of Management Sciences, Montreal, Quebec, CANADA
Shrafat Ali Sair Assistant Professor, Hailey College of Commerce, University of the Punjab, Lahore, Pakistan
Muhammad Shan PhD scholar, Institute of baking and Finance Bahauddin Zakariya University Multan, Pakistan

Keywords: Despotic Leadership, Ethical Leadership, Employee Engagement, Psychological Distress & Leadership Styles

Abstract

This study investigates the impact of despotic and ethical leadership upon employees’ engagement, focusing on the mediating role of psychological distress. Using a quantitative approach with data collected from employees in manufacturing SMEs, research analyzes the direct and indirect effects of different leadership styles on employee engagement. The findings reveal that despotic leadership negatively affects employee engagement both directly and indirectly over increased psychological distress, highlighting the detrimental impact of authoritarian leadership styles. Conversely, ethical leadership positively influences the employees’ engagement by reducing psychological distress, underscoring the benefits of ethical leadership in fostering a supportive work environment. The study's results emphasize the importance of addressing psychological distress to enhance employee engagement. The recommendations include that implementing leadership development programs and prioritizing mental health initiatives to improve employee well-being and productivity. The study contributes to literature by elucidating complex relationships amid leadership styles, psychological distress and employee engagement offering insights for the organizational effectiveness.