Driving Employee Productivity in “Small and Medium Sized Enterprises” ( <scp>SMEs</scp> ): How Sustainable Leadership, Employee Adaptability, and Emotional Intelligence Make a Difference

ABSTRACT This research study examines the driving factors for enhancing employee productivity in “Small and Medium‐sized Enterprises” (SMEs). Specifically, it investigates the impact of sustainable leadership on employee productivity with mediation mechanism of employee adaptability and the moderation effect of emotional intelligence. Data were collected from 483 employees working in SMEs. The Partial Least Squares Structural Equation Modeling (PLS‐SEM) approach was used for hypotheses testing. This methodology was considered as suitable for this contemporary research study because it has the capability for handling complex relationships among multiple variables simultaneously. The results demonstrate substantial relationships between sustainable leadership, employee adaptability, emotional intelligence, and productivity. Sustainable leadership establishes a significant effect on both employee adaptability and employee productivity. Employee adaptability plays a key role in mediating the association between sustainable leadership and employee productivity. Emotional intelligence emerges as a vital moderating factor, affecting the relationship between sustainable leadership, employee adaptability, and productivity. The present research study provides a unique understanding by illuminating how leadership, employee adaptability, and emotional intelligence are useful for the employees working in SMEs of developing countries such as Pakistan. This investigation highlights and fills the research gap with the mediating role of resilience and agility along with the moderation effect of emotional intelligence. The study model incorporates novel constructs in the form of mediation (i.e., employee resilience, agility) and moderation (i.e., emotional intelligence) that influence the productivity of employees working in SMEs and offers new insights to management in enhancing performance. Moreover, it opens avenues for future research studies to delve into this literature domain in different cultures and contexts. It is an initial exploration in Pakistan, which aims to elucidate these relationships.