Leading for performance: emotional intelligence, leadership style and organizational outcomes in Greek local governments

Purpose This study investigates how emotional intelligence (EI) and leadership styles influence employee performance in a Greek municipal administration. It examines three outcomes extra effort, perceived leader effectiveness and satisfaction – while situating EI as a form of non-cognitive human capital in resource-constrained settings. The analysis highlights the interplay between leadership behaviors and emotional competencies in shaping public employee engagement and organizational performance. By focusing on the Municipality of Lefkada, the study contributes to debates on human capital and organizational behavior in bureaucratically rigid, fiscally constrained contexts typical of Southern European local governments. Design/methodology/approach A structured employee survey (n = 43) was conducted using the Wong and Law Emotional Intelligence Scale (WLEIS) and Multifactor Leadership Questionnaire (MLQ-5X). To address multicollinearity, principal component analysis (PCA) reduced leadership dimensions into two orthogonal components. Regression models then assessed the effects of leadership, EI and demographics on performance outcomes. Active leadership behaviors – transformational and transactional – were positively associated with satisfaction, effectiveness and extra effort, while passive leadership was negatively related. Emotion regulation (ROE) emerged as the most influential EI factor. Models displayed high explanatory power (R2 > 0.80), underscoring leadership’s central role. Findings Overall EI levels were high, though appraisal of others’ emotions (OEA) lagged behind other competencies. Transformational leadership was strongly and positively related to employee extra effort, satisfaction and perceived effectiveness. Transactional leadership, although prevalent, was associated with weaker performance effects and even negative links to effort and effectiveness, suggesting inefficiencies in municipal management. Passive leadership consistently harmed outcomes. Among EI traits, only emotion regulation predicted higher satisfaction and discretionary effort. While EI correlated with leadership styles, regression results suggest institutional and contextual factors may overshadow individual competencies in shaping leadership behaviors in Greek local governments. Research limitations/implications The study’s small sample size (n = 43), single-case design and reliance on self-reported data limit external validity and causal inference. Although PCA mitigates multicollinearity, other diagnostic issues (e.g. heteroskedasticity and nonlinear effects) could not be fully tested. Future research should include multiple municipalities, larger samples and longitudinal or experimental designs to capture causal pathways. Despite these limitations, the findings highlight the value of integrating EI and leadership into public administration theory, suggesting that refining methodological approaches can yield more robust insights into the role of non-cognitive human capital in shaping organizational performance. Practical implications Leadership development and EI training offer practical avenues for improving public sector performance, particularly in municipalities with scarce resources and bureaucratic rigidity. Emotion regulation emerged as a trainable skill linked to employee motivation and satisfaction. Encouraging transformational and active transactional leadership while curbing passive managerial practices may improve service delivery and foster more engaged public workforces. These results support embedding non-cognitive skills into HRM systems, recruitment and leadership evaluations. Municipal administrations can thus enhance organizational resilience and citizen-oriented service delivery by integrating emotional competencies alongside traditional performance management tools. Originality/value This study bridges emotional intelligence and leadership theory within a human capital framework, advancing understanding of non-cognitive skills in public service productivity. It provides empirical evidence from a rarely examined context – a Greek island municipality – thereby enriching scholarship on Southern European local governments. Methodologically, the use of PCA-enhanced regression addresses leadership style collinearity, offering an innovative approach to small-sample public administration research. Conceptually, it frames EI as an organizational input shaping discretionary effort, satisfaction and leader effectiveness. The findings inform both academics and practitioners seeking to strengthen public sector performance through behavioral competencies.