Ripple effect of destructive leadership: the proactive role of psychological capital in psychological disidentification and job performance

Based on conservation of resources theory (COR), this research aims to investigate the relationship between destructive leadership behavior (DLB) and employee’s job performance (peer rated) considering the mediating role of psychological disidentification (PsyDis) and moderating effect of psychological capital (PsyCap). This study empirically tests a moderated-mediation model by applying structural equation modeling technique using time-lag design (three waves) based on primary data (n = 377) collected from service sector organizations in Pakistan. The service sector provides a theoretically meaningful context because it is the largest and fastest-growing sector of Pakistan’s economy and is characterized by frequent supervisor-employee interactions, making the effects of destructive leadership particularly salient. The results show that destructive leadership behavior has a negative impact on employees’ job performance through psychological disidentification. Moreover, the moderating role of psychological capital decreases the indirect effect of destructive leadership on job performance by reducing the strength of positive relationship between destructive leadership and psychological disidentification. The current study adds to the literature by including an identity-based mechanism into the analysis of destructive leadership outcomes, as well as illustrating the buffering effect of psychological capital. This study contributes to the destructive leadership literature by examining the proposed relationships in the Pakistani service sector, thereby broadening the contextual scope of destructive leadership research beyond predominantly Western contexts. This research also provides practical insight, and the results may prove valuable for organizations that aim to reduce the negative consequences of destructive leadership through leadership development and building psychological capital of their employees.