Does innovative work behavior and digital transformation drive employee performance? A sequential mediation approach

Purpose Grounded in transformational leadership (TL) theory and dynamic capability theory, the current study intends to explore the sequential mediating effect within the relationship between TL and job performance (JP). The study endeavors to provide a comprehensive understanding of how TL fosters innovative behavior and drives digital transformation (DT) within organizations, thereby enhancing overall JP. Design/methodology/approach Utilizing the sample of 303 participants collected from the Indian IT industry, the proposed hypotheses were tested. Final analysis was performed using the partial least squares structural equation modeling (PLS-SEM) approach. Findings The findings indicate that TL exerts both a direct and indirect significant positive impact on JP. Notably, innovative work behavior and DT emerge as critical mediators, functioning both independently and sequentially in this relationship. Research limitations/implications The study highlights that transformational leaders enhance employees’ innovation and adaptability, making them more likely to embrace DT. This integration of technology improves employee performance by increasing flexibility, efficiency and task comprehension. Originality/value The novelty of study lies in addressing complex and interconnected relationships (TL-IWB-DT-JP) in a unified research model, moving beyond studies that have focused on isolated mediation effects, hence opening a black box in leadership and performance literature. Furthermore, the study’s relevance is underscored by its focus on DT and its influence on employee job outcomes, which is critical for the ongoing global digital innovations.