Transformational Leadership and Contextual Performance: The Mediating Role of Psychological Empowerment Among Employees of Fast-Moving Consumer Goods Firms in Port Harcourt, Nigeria

Abstract

Despite extensive evidence that transformational leadership enhances employee performance, the psychological mechanisms through which it influences contextual performance remain insufficiently explored, particularly in developing-country contexts. Drawing on Social Exchange Theory and Psychological Empowerment Theory, this study investigates the mediating role of psychological empowerment in the relationship between transformational leadership and employees' contextual performance of fast-moving consumer goods (FMCG) Firms in Port Harcourt, Rivers State, Nigeria. Using a cross-sectional survey design, data were collected from 287 employees across 14 selected FMCG organizations. Standardized and validated measurement scales were employed, and hypotheses were tested using mediation analysis via the PROCESS macro (Model 4). The findings reveal that transformational leadership significantly predicts contextual performance (β = .52, p < .001) and psychological empowerment (β = .61, p < .001), while psychological empowerment partially mediates the relationship between transformational leadership and contextual performance (indirect effect = .18, 95% CI [.09, .28]). The study contributes to leadership and organizational behavior literature by empirically clarifying the empowerment mechanism underlying discretionary work behaviors in a Nigerian sub-Saharan African organizational setting. Practical implications for leadership development and human resource management in FMCG organizations are discussed.