Powered by Society: Public Value mediates the Impact of Transformational Leadership on Work Outcomes

Our study investigates how an organization’s contribution to society (macro-level) relates to a person’s work outcomes and individual well-being (micro-level). Focusing on the occupational context and using cross sectional data of 1520 respondents we propose the organization’s societal value added in terms of creating public value to be an important mediator for effects of transformational leadership on work engagement, civic virtue, absenteeism, and happiness. We found general support for this both in method bias uncorrected and corrected analysis, suggesting employees to be influenced by the organization’s public value. However, we found no significant relations to absenteeism. Unexpectedly, transformational leadership revealed low positive relationships to work engagement and negative relationships to civic virtue and happiness. The study contributes to further understand the societal dimension of peoples’ workplace experience.