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Academy of Entrepreneurship Journal Volume 27, Issue 6, 2021
1 1528-2686-27-6-639
Citation Information: Riyanto, S., Endri, E., Hamid, A. (2021). The influence of transformational leadership and the work
environment on employee performance: mediating role of discipline. Academy of Entrepreneurship Journal,
27(6), 1-11.
THE INFLUENCE OF TRANSFORMATIONAL
LEADERSHIP AND THE WORK ENVIRONMENT ON
EMPLOYEE PERFORMANCE: MEDIATING ROLE OF
DISCIPLINE
Setyo Riyanto, Universitas Mercu Buana
Endri Endri, Universitas Mercu Buana
Abdul Hamid, Universitas Mercu Buana
ABSTRACT
The research aims to analyze the level of influence of the application of transformational
leadership style, work environment on the work discipline of civil servants in the Ministry of
Villages, Disadvantaged Regions and Transmigration of the Republic of Indonesia (Kemendes-
PDTT) and its impact on employee performance in dealing with frontier, outermost and
disadvantaged areas in the territory of the State Republic of Indonesia. The research design used
was an associative explanative research with a survey method. The study population was all PNS
Kemendes-PDTT. Respondents were selected using purposive sampling technique. The number
of respondents in this study were 116 people. Data processing uses Structural Equation
Modeling (SEM) with the Partial Least Square (SmartPLS) version 3.0 program. The research
was conducted from January 2020 to July 2020. The empirical findings of the study reveal that
with a transformational leadership style and work environment, both through the process of
establishing employee discipline and directly affecting the performance of civil servants at the
Ministry of Villages, Disadvantaged Areas and Transmigration. Republic of Indonesia
(Kemendes-PDTT).
Keywords: Work Environment, Discipline, Leadership, Employee Performance.
INTRODUCTION
Development in the frontier, outermost and underdeveloped areas in Indonesia is
currently the focus of the Government of the Republic of Indonesia, whose implementation is
carried out by the Ministry of Villages, Disadvantaged Areas, and Transmigration. However,
considering the location of these areas, which are included in the frontier, outermost and
underdeveloped categories, they are still relatively low, lacking facilities and infrastructure, and
remote and far from various crowds; the implementation of tasks in these areas is often
hampered. Many employees are reluctant to carry out their duties in these areas. Initial research
conducted on civil servants at the Directorate General of Community Development shows that
several fundamental reasons affect civil servants' performance responsible for development
activities in frontier, outermost and disadvantaged areas, especially employee work discipline.
From the observations made during this research, it appears that employees' work discipline is
closely related to the leadership style of their superiors and employees' perceptions of the
workplace environment. Based on existing facts on the ground, we research what factors have a
Academy of Entrepreneurship Journal Volume 27, Issue 6, 2021
2 1528-2686-27-6-639
Citation Information: Riyanto, S., Endri, E., Hamid, A. (2021). The influence of transformational leadership and the work
environment on employee performance: mediating role of discipline. Academy of Entrepreneurship Journal,
27(6), 1-11.
direct and indirect influence on the performance of civil servants in the Ministry of Villages,
Disadvantaged Areas, and Transmigration; especially in the three dominant factors that have
been found from the initial research that has been done before, namely the leadership style of the
superior, in this case how well the superiors apply the application of transformational leadership
values in their daily Leadership in leading their subordinates, what has been the organization's
efforts to create an environment. Work conducive to employees' ability to work well and what is
no less important is how much employees can discipline themselves in work and submit to and
obey orders from their superiors according to their duties, authorities, and responsibilities.
Employee performance is considered very important to encourage higher organizational
growth (Fong & Snape, 2015). Service-focused employee performance is critical to achieving
business goals and maintaining a competitive edge. Previous studies have examined the effect of
transformational leadership and the work environment with discipline as a mediator variable on
employee performance, but still provide conflicting empirical evidence. The findings of Buil et
al. (2019), Kammerhoff et al. (2019) and Luo et al. (2019) related to the relationship between
transformational leadership and employee performance shows that transformational has a
significant effect on employee performance. However, Eliyana et al. (2019); Razak et al. (2018)
and Jaiswal and Dhar (2015) show contradictory results that transformational leadership has no
significant effect on employee performance. Yamin (2020) proves that intrinsic motivation and
transformational leadership can improve employee performance. Organizations face several tasks
creating a dynamic and comfortable environment for employees. To deal with the changing and
evolving environment and change to be successful and stay competitive, the organization needs
to satisfy its employees by meeting employee needs and providing good working conditions
(Riyanto et al., 2021). Managers are aware of the existence of a good work environment to
optimize high job satisfaction (Permana et al. 2021). Muguongo et al. (2015) found a significant
relationship between work environment and satisfaction. However, the non-conducive work
environment in industrial banking in India has proven to have a negative impact on employee
satisfaction (Dhamija et al., 2019). Also, Riyanto et al., (2021) found that the work environment
has no effect on employee performance. The discrepancies in these findings provide further
opportunities in further research to confirm these gaps. Therefore, this study is intended to
examine the relationship between discipline, transformational leadership, work environment, and
employee performance.
LITERATURE REVIEW
Work Environment
The organization's work environment is vital for management to pay attention to the work
environment directly or indirectly influencing employees in carrying out their jobs (Riyanto et
al., 2021). Employees' work environment can affect carrying out assigned tasks, for example,
with the air conditioner (AC), adequate lighting. Nguyen et al. (2015) added that a condition
related to workplace characteristics to employee behavior and attitudes could be associated with
psychological changes due to things experienced in their work or certain conditions. This
situation will continue as an organizational concern where work boredom, monotonous work,
and fatigue can affect employee psychology. Work environments that require a high level of
manager-controlled flexible scheduling require workers to be active and require managers to
change schedules and allow more hours (Wood, 2018). Individuals with higher "self-focus"
Academy of Entrepreneurship Journal Volume 27, Issue 6, 2021
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Citation Information: Riyanto, S., Endri, E., Hamid, A. (2021). The influence of transformational leadership and the work
environment on employee performance: mediating role of discipline. Academy of Entrepreneurship Journal,
27(6), 1-11.
usually pay less attention to work environment factors and instead rely more on self-perception
to make ethical decisions (Kish-Gephart et al., 2019). A friendly work environment can hardly
be identified and measured (Nguyen et al., 2015). Employee development provides opportunities
for employees to socialize their duties and workplaces so that training and development
programs provide opportunities to help organizations (Virgiawan et al., 2021). According to this
theory, when ethical leaders such as managers are present at work as role models, employees
emulate them. They study desired behavior by observing how managers behave and what
behaviors should be rewarded and punished. If these employees do a terrible job, they will not
find good references. If the organization leaves its employees in an attractive work environment,
the former employees can introduce them to their previous workplaces (Riyanto et al., 2021).
This learning occurs in industrial locations in a real-world environment where real-world
problem solving can be practiced. Task design is defined to include team autonomy, intra-team
coordination, and task meaning. More independent teams can improve their performance by
adapting to changing job requirements (Park & Park, 2019).
Employee Discipline
Discipline is compliance, appropriate behavior, and actions taken against employees who
do not comply with organizational rules. Discipline is believed to be related to the use of
violence and formal authority, or it can be said that "moral strengthening and self-control"
(Hidayati et al., 2010). According to Figari (2011) defines discipline in two separate categories.
The first category's definition reflects the original Latin roots of the word discipline, 'learning,'
with a focus on developing self-mastery through teaching problem-solving skills and learning
more productive ways of expressing feelings. The second category definition relates to external
control, obedience to authority, and punishment. Besides, each discipline is supported by specific
concepts such as "career success" and "job success," which make it difficult to clearly define and
operationalize the boundaries of "success". The discipline operates on the convergence of several
organizational tools, although it does not necessarily bring followers. A continuous quality
improvement system, a central expression of the global managerial vision, must be translated
into a specific context (Figari, 2011). Discipline and punishing, in which Foucault distinguishes
power and discipline, is the starting point for discussing self-discipline. This concept is
somewhat vague and requires a certain definition. Discipline means that it is related to a set of
skills or knowledge. The disciplinary policy should clarify that employees have a right to know
what to expect and what might happen if they violate organizational rules. It is also emphasized
that the organization will treat employees following fair justice principles. In general,
management disciplines have lost faith in the modernist detachment and are getting closer to
engaging in 'after modern' practices (Wood, 2018).
Transformational Leadership
Leadership has a strong relationship between leaders and followers who expect real
change and results that reflect their goals (Bastari et al., 2020). Organizations define leadership
as "the ability to influence groups to achieve goals." This leadership style can be studied well. To
achieve higher levels of sustainability in today's society requires individual action, where
involves a group and then sees a positive impact that requires leadership (Vila-Vázquez et al.,
2018). The leadership skills dimension refers to the character and world vision that a leader can
Academy of Entrepreneurship Journal Volume 27, Issue 6, 2021
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Citation Information: Riyanto, S., Endri, E., Hamid, A. (2021). The influence of transformational leadership and the work
environment on employee performance: mediating role of discipline. Academy of Entrepreneurship Journal,
27(6), 1-11.
demonstrate (Chua & Ayoko, 2019). Studies have shown that their behavioral attributes and
reflective personality are important aspects. Many authors have associated strategic Leadership
as an approach to developing an environment conducive to innovation to advance organizational,
human, social, and structural capacities (Lai et al., 2020; Silitonga et al., 2020). Leadership is an
inherently social phenomenon and can understand and respond effectively to complex social
behavior (Hapsari et al., 2021; Chun et al., 2016). These traits can get a person noticed, but they
must be reviewed and developed in experience. Research shows that competencies develop that
appear over time and manifest themselves in different ways and situations. The origin of
Leadership comes from the beliefs and values that cause a group to face internal and external
problems. If what the leader proposes is successful and works, it is gradually divided into shared
assumptions. Leadership is an important managerial function that helps maximize effectiveness
and achieve organizational goals. Modern leadership theory has enabled organizations to create a
culture of empowerment that enhances performance and leadership in the workforce (Nohe &
Hertel, 2017). This behavior undoubtedly affects employees' attitudes at work, and team
leadership style is one of the main factors that make or break team success (Herdman et al.,
2017). Leadership is one of the most frequently discussed management phenomena. It can be
traced back to the past, which is much discussed in ancient books and manuscripts. Leadership
was initially considered a trait inherent in a person, occurs in individuals, is impossible to learn,
and is related to genes. Leadership is believed to lead to aristocracy and monarchy because of the
birthright, where power is passed from generation to generation, related to the Leadership of the
dynastic family.
Employee Performance
Work performance is assessed by quality and quantity based on the work standards set by
the company. Employee performance will be very good if they have high skills and have hopes
for a better future (Pancasila et al., 2020). Good performance is optimal performance based on
company standards and supports the achievement of company goals (Astuty & Udin, 2020).
Performance is influenced by three factors: First, individual factors consisting of abilities and
expertise, background, and demographics. Second, psychological factors consisting of
perceptions, attitudes, personality, learning and motivation. Third, the organizational factors
consist of resources, leadership, rewards, structure and design work. Job performance is the
value of employee behavior that contributes to achieving organizational goals. This definition
includes employee behavior that can determine which behavioral boundaries are (and are not)
relevant to job performance. Performance can be divided into job performance and driver
performance, especially those related to work behavior factors. Behavioral performance is
mainly represented by spontaneous behavior and different workplace roles, which can be broken
down into positive behaviors (such as organizational citizenship behavior) and negative behavior
(Han et al., 2016). While role performance is defined as an employee's actions to meet the
conventional demands of his job, extra-role performance refers to an employee's activities
outside the boundaries at his discretion.
Employees who have high performance were found to have a more outstanding
obligation to help the organization achieve its goals, stronger commitment, increased reward
expectations for high performance, and all of these results were consistently found to be
associated with increased performance in additional roles (Susanto et al., 2020). Managers and
employees likely perceive performance differently across cultures, leading to cross-cultural and
Academy of Entrepreneurship Journal Volume 27, Issue 6, 2021
5 1528-2686-27-6-639
Citation Information: Riyanto, S., Endri, E., Hamid, A. (2021). The influence of transformational leadership and the work
environment on employee performance: mediating role of discipline. Academy of Entrepreneurship Journal,
27(6), 1-11.
intercultural differences in the definition and interpretation of performance. Therefore, in an
individualistic culture, emphasis will be placed on individual efforts and outcomes, requiring
objective and measurable performance criteria and expected manager performance in terms of
quality/quantity, longer working hours, greater responsibility and flexibility, and fewer requests
for rewards in various forms. Evidence suggests that climate affects crop yields more, so a better
climate is likely to increase yields. Evaluation can increase employee motivation and encourage
employees to participate in innovative programs, and facilitate the achievement of desired results
(Paais & Pattiruhu, 2020). Performance reviews generate feedback, and performance
improvement plans help employees acquire skills that maximize their potential (Vizano et al.,
2021; Setiyani et al., 2020).
METHODOLOGY
The researcher analyzes the relationship between the independent variables and the
dependent variable through quantitative research using survey methods. This research was
conducted by measuring the indicators of the independent (exogenous) variables, namely
Leadership, and work environment, and work discipline as intervening variables, while the
dependent variable (endogenous) in this study was employee performance as described in Table
1 on Research indicators.
Table 1
RESEARCH INDICATORS
Variable
Indicators
Work Environment
WL 1
Workspace lighting
WL 2
The air temperature in the workroom
WL 3
Comfortable work environment
WL 4
Work tool condition
WL 5
Workplace cleanliness
WL 6
Complete facilities at work
WL 7
Assigned task responsibilities
WL 8
Attention and support from leaders
WL 9
Cooperation between employees
WL 10
Evenly distributed workload
Work Discipline
D 1
The size of the compensation
D 2
The desire to find additional outside income
D 3
Leaders become role models for subordinates
D 4
Written rules for employees
D 5
Regulation of conditions and situations
D 6
Application of rules at work
D 7
Firm Leadership and sanctions
D 8
Upright discipline
D 9
The size of the compensation
Transformational
Leadership
TL 1
Leaders foster confidence and trust in their subordinates
TL 2
Be admired and become a role model
TL 3
Admired Articulate a vision of the future
TL 4
Speak optimistically with enthusiasm
TL 5
Encourage the expression of ideas from subordinates
TL 6
Encourage innovative thinking
TL 7
Involving subordinates in decision making
TL 8
Taking into account the needs of subordinates, abilities
Academy of Entrepreneurship Journal Volume 27, Issue 6, 2021
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Citation Information: Riyanto, S., Endri, E., Hamid, A. (2021). The influence of transformational leadership and the work
environment on employee performance: mediating role of discipline. Academy of Entrepreneurship Journal,
27(6), 1-11.
TL 9
Listen to the suggestions of subordinates attentively
TL 10
Advise, teach and train
Employee
Performance
EP 1
Take part in training
EP 2
Explanation of the employee's work position
EP 3
Instructions to employees
EP 4
Provide excellent service to the community
EP 5
Complete work effectively and efficiently
EP 6
Always prioritize quality in providing services
EP 7
Follow the development of science and technology
EP 8
Add knowledge, skills to carry out tasks
EP 9
Ready to perform tasks
EP 10
Maintain cooperation between agencies
EP 11
Work excitedly to pursue the targets
RESULTS AND DISCUSSION
Results
Discriminant Validity is obtained by comparing the coefficient of AVE Root or Square
Root Average Variance Extracted from each variable with the correlation value more than 0.5
between variables in the model.
Table 2 shows that each variable in this study has an AVE value greater than 0.5. There is
only one variable with a value of less than 0.5, namely the work environment towards
transformational Leadership.
Table 2
DISCRIMINANT VALIDITY (FORNELL-LACKER CRITERIUM)
Discipline
Employee
performance
Transformational
leadership
Work
environment
Discipline
0.749
Employee performance
0.844
0.626
Transformational
leadership
0.645
0.714
0.724
Work environment
0.547
0.590
0.453
0.609
Academy of Entrepreneurship Journal Volume 27, Issue 6, 2021
7 1528-2686-27-6-639
Citation Information: Riyanto, S., Endri, E., Hamid, A. (2021). The influence of transformational leadership and the work
environment on employee performance: mediating role of discipline. Academy of Entrepreneurship Journal,
27(6), 1-11.
FIGURE 1
THE STRUCTURAL MODEL
As shown In Figure 1, we can see the effect of indicators on each of the predetermined
variables. Based on the study results, it can be concluded that employee discipline has a very
strong influence on employee performance compared to transformational Leadership and the
work environment where the employee discipline value is above 0.5. Meanwhile,
transformational leadership has a significant effect on employee discipline.
Table 3
SUMMARY OF THE STRUCTURAL MODEL
Original
Sample
(O)
Sample
Mean (M)
Standard
Deviation
(STDEV)
T Statistics
(|O/STDEV|)
P Values
Transformational Leadership ->
Employee Performance
0.297
0.292
0.053
5.588
0.000
Work Environment -> Employee
Performance
0.190
0.198
0.050
3.794
0.000
Table 4 illustrates the level of a positive influence of transformational leadership on
employee performance, which is very significant (p-value 0,000), as well as the aspect of the
work environment which shows a positive and significant level of influence on employee
performance but with less intensity when compared to the effect that comes from
transformational leadership.
Discussion
Transformational leadership either through the process of forming employee discipline or
directly determining employee performance. Good leadership can be a role model for employees
because it provides examples that can create admiration and motivation so that they work with
discipline and full responsibility. Close collaboration between transforming leaders and
disciplined employees is the key to creating the best performance. Therefore, a transformational
leader must demonstrate a variety of behaviors to nurture and enhance the psychological states
Academy of Entrepreneurship Journal Volume 27, Issue 6, 2021
8 1528-2686-27-6-639
Citation Information: Riyanto, S., Endri, E., Hamid, A. (2021). The influence of transformational leadership and the work
environment on employee performance: mediating role of discipline. Academy of Entrepreneurship Journal,
27(6), 1-11.
that contribute to job engagement. Research by Bastari et al. (2020) which makes motivation an
intervening variable which reveals that transformational leadership has a significant effect on
employee work performance. Employee work motivation also has a significant effect on
employee performance. Lai et al. (2020) found that transformational leadership using a variety of
behaviors helps to provoke the benefits of organizational followers so that it inspires active
employee involvement and can create better task performance. Shaheen et al. (2020) examined
the mediating role of employee engagement in relation to organizational cronyism and employee
performance. The results reveal that organizational cronyism is negatively related to employee
performance. The analysis confirms the mediating role of job involvement in the relationship
between organizational cronyism and employee performance.
Li et al. (2019) found that transformational leadership and job involvement are
significantly related to innovative work behavior. The findings also show a significant impact of
transformational leadership on trust in a leader, and a subsequent positive impact on employee
engagement jobs. To promote employees' innovative work behavior, leaders in organizations
should strive to involve them effectively in their work by gaining trust, which can help them
participate in creative activities. Breevaart et al. (2016) revealed that employees are actively
involved in their work and receive higher performance ratings from their leaders when the leader
uses more transformational leadership behaviors, and when employees use more self-leadership
strategies. Furthermore, we show that transformational leadership behaviors are more effective
when employees have a high (vs. low) need for leadership and vice versa for self-leadership.
Rumaropen (2019) proves that emotional intelligence directly has a significant positive effect on
transformational leadership and employee performance. Transformational leadership directly has
a significant positive effect on performance. Emotional intelligence has a significant positive
effect on employee performance with the mediating effect of transformational leadership.
Transformational leadership is not proven as a mediating effect in analyzing the effect of
emotional intelligence on employee performance. Study Findings Para-González et al. (2018)
revealed that the adoption of transformational leadership styles improves performance when
specific systems of HRM practices, learning and innovation are developed in an organization.
Manesh et al. (2018) revealed that transformational leadership allows leaders to be able to
motivate employees to implement changes effectively to improve performance.
The work environment, either through the process of establishing employee discipline or
directly has a significant effect on performance. The results of the study are in line with the
findings of Idris et al. (2020, Hidayati et al. (2019) and Liestiani et al. (2019) that the work
environment has a positive effect on employee performance. Putri et al. (2019) research results
prove that work discipline is able to mediate the influence of the work environment on employee
performance. Idris et al. (2020) also concluded that job satisfaction can directly or indirectly
mediate the relationship between work environment and employee performance. Managers
realize the importance of a good work environment to make the best use of the level of job
satisfaction. The research of Dhamija et al. (2019) actually proves that a work environment that
is not conducive has a negative effect on employee satisfaction resulting in decreased employee
performance. Work discipline directly determines the achievement of the best employee
performance if they carry out the job with full responsibility under any circumstances. research is
in line with the findings of Ferdinandus (2020) and Liestiani et al. (2019) stated that work
discipline has a significant effect on employee performance. Razak et al. (2108) proved that
work discipline has the greatest influence on employee performance.
Academy of Entrepreneurship Journal Volume 27, Issue 6, 2021
9 1528-2686-27-6-639
Citation Information: Riyanto, S., Endri, E., Hamid, A. (2021). The influence of transformational leadership and the work
environment on employee performance: mediating role of discipline. Academy of Entrepreneurship Journal,
27(6), 1-11.
CONCLUSION
The results of this study indicate that overall the implementation of transformational
Leadership and the work environment, both through the process of establishing employee
discipline and directly, has a significant effect on the performance of the state civil servants
Ministry of Villages, Disadvantaged Areas and Transmigration of the Republic of Indonesia
(Kemendes-PDTT). The most significant influence comes from how much admiration and the
role model a Leader plays. The thing which is significant but has a relatively small effect is the
aspect of responsibility for the tasks that have been given to employees. Good Leadership is an
independent and continuous learning process, training, and relevant leadership experiences such
as responsibility to the task to the goals to be achieved. Effectively anticipated and unexpected
obstacles Leadership need cooperation between employee, to be a key, described as setting
direction, aligning people, motivating. This illustrates that employee performance is closely
related to how employees carry out work according to their responsibilities. In general, work
discipline has a positive and significant effect on the performance of the employees of the
Ministry of Kemendes-PDTT. Another thing that arises from this research is that employees'
willingness to be ready to perform tasks in any situation is the lowest aspect. Thus, direct
superiors' role as role models to always provide exemplary examples always to be ready to carry
out their duties will significantly affect employees' performance level in the Ministry of Health-
PDTT environment.
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27(6), 1-11.
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