Enhancing Employee Creativity in the Banking Sector: A Transformational Leadership Framework

Abstract

Despite the growing academic interest in transformational leadership and employee creativity, the banking sector has not yet received enough consideration. Mostly, the banking sector was assumed to be an inappropriate setting for employee creativity as it is a tightly supervised and controlled segment of an economy. Nevertheless, some research studies in advanced nations emphasized the significance of employee creativity in a banking context. However, the case of developing countries (e.g., Pakistan) has remained an understudied area. Against this background, the objective of this study was to examine the relationships between transformational leadership (TL), perceived organizational support (POS), and employee creativity (EC) through work engagement (WE). Some private banks were selected, situated in a large metropolitan city, with data collected for the present research by a self-administered questionnaire. The structural equation modeling (SEM) technique was employed to analyze data. It was observed that TL and POS induce EC, whereas WE mediated these relationships. These findings may help policymakers of the banking industry to improve employee creativity through WE.

1. Introduction

Employees are indispensable resources for an organization, especially if it becomes more competitive in the current dynamic business world. Furthermore, increased competition inclines both firms and workers to become innovative. Personnel who succeed in achieving their objectives, aligned to strategic goals, are the most important employees for top management. Companies must promote innovativeness and invention to become competitive and sustainable in their industries [1]. In addition, the workforce’s creativity plays a significant role in organizational performance [2]. Employee creativity (EC) is the basis of a company’s achievement or failure and is sometimes perceived as the most imperative asset of a firm [3]. Therefore, creativity and novelty are essential assets of an organization [4]. The workers’ creativity may also lead to obtaining new knowledge, which may boost the firm’s growth and increase its success and chances of survival [5,6]. Thus, the firms should build up EC among their workers to remain competitive [7]. According to Anderson, et al. [4], EC and novelty are the outcomes of new ideas and improved tasks in the forms of products and work processes. Likewise, the role of leadership is to motivate employees to use their capabilities for organizational success [8,9,10]. Good leadership always encourages the workforce’s creative behavior [11,12]. Leaders have legitimate authority to persuade their followers to pursue particular behaviors. Therefore, such dominant supervision inclines a firm’s inventive proficiencies [13]. Leadership is shaped by culture, environment, structure, the general background, and the type of a company’s business. Hence, leadership styles might differ depending on the manager and on the firm [14]. Consequently, different studies are required for different businesses and countries.

Based on these arguments, the researchers developed certain research objectives: (1) to investigate the relationship between transformational supervision and worker creativity; (2) to investigate the mediating role of work engagement in transformational leadership and employee creativity; (3) and to investigate the intervening role of work engagement on employee creativity and perceived organizational support. Transformational leadership has been proven to motivate a workforce to produce innovative and valuable ideas for production, services, and processes [3,15,16]. Supervisors using transformational leadership are recognized as key factors of EC and novelty [17,18]. Transformational leaders also try to incline their followers towards higher work engagement (WE) [19]. Work engagement is defined as:

• vigor (as it requires high levels of energy, psychological resilience, consistency when facing problems, and the capacity to expend significant effort during work time);
• dedication (a feeling of motivation, self-respect, and the capacity to confront challenges); and
• absorption (bringing happiness to the individual and removing his/her anxiety) [20].

Eisenberger and Stinglhamber [21] proposed that perceived organizational support (POS) positively relates to WE. POS is the degree to which a company considers the worker’s input and satisfies their emotional needs [22]. Rhoades and Eisenberger [23] argued that POS may raise EC through improving organizational loyalty, cultivating performance, and minimizing the intention to leave attitude against impartial practices and supervisory assistance. Even though various research on transformational leadership has already been carried out, such as in the health sector [24,25,26,27], research rarely targets the banking sector [28]. Generally, banking sector employees spend a significant amount of time interacting with their customers [29]. Currently, the government and the industry are putting more pressure on bankers [30]. Consequently, employees are asked to work harder, stay longer at work, and perform tasks beyond their expertise [31]. As a result, bank employees are suffering from stress [32,33].

The present research covers the banking sector of Pakistan, as previous inquiries concerned other fields such as the health sector [34], the manufacturing industry [35], and the education sectors [36]. However, this research might be generalized to every bank worldwide. The banking industry of Pakistan is growing steadily, and, as a consequence, there is a strong rivalry between banks. In that context, a bank may efficiently manage its human resources by using a range of specific leadership styles [37]. Transformational leadership might build up self-confidence and work fulfillment among bank employees [38]. Currently, the sector has to face many issues, such as lack of dedication, employee turnover, and work strain in its workforce [37]. The Pakistani banking industry remained less affected by the pandemic because consumers have shifted to e-banking as an alternative to conventional banking [39,40]. According to the state bank of Pakistan, private banks felt a slight cash depletion because consumers withdrew huge amounts from ATMs, but, overall, banks remained stable during the COVID-19 pandemic. As a consequence, the importance of effective leadership has grown. The current economic situation of Pakistan and the constantly changing financial policies have amplified the importance of the banking sector which faces several challenges [41].

The present study contributes to the current literature dealing with organizational management in several ways. First, it points out that transformational leadership enhances employee creativity (EC). Nevertheless, EC is not formally required by organizations, but it can be beneficial for them. The banking sector of Pakistan is highly competitive. To further aggravate the situation, the banking sector is labeled as a systematized sector and thus has to follow standard operating procedures. Thus, any rival bank can easily imitate these procedures. On the contrary, creative ideas introduced by the employees are not easy to imitate because they depend on a particular experience and on the different organizational characteristics. However, in the literature, it remains unclear what leadership effect this has on the creation of this novel character or behavior of the employees, such as their creativity. Research novelty relies on explaining the mechanism that drives the employees’ involvement in creative tasks. As per the researchers’ observations, the present research is a pioneering work aiming to characterize transformational supervision among Pakistani bankers. Likewise, this is a uniqueness of the current study that work engagement (WE) is tested as a mediator among TL, perceived organizational support (POS), and employee creativity (EC). The present study emphasizes investigating the relation between TL, worker creativity, and perceived organizational support via work engagement in the Pakistani banking industry. The remainder of the current research is separated in the following sections. The subsequent part explains related literature to form hypotheses. The following segment mentions the research design that consists of sampling, data collection, and questionnaire formation procedures. After this, the findings part is mentioned, including hypotheses authentication by various statistical analyses. Finally, the last segment describes the discussion part that consists of inferences for theory and application and constraints of this survey accompanied by forthcoming research guidelines.

2. Theory and Hypotheses

The job demands–resources (JD-R) model [42] has been employed to develop hypotheses. According to the theory, there are particular risk factors in each profession linked to job stress which belong to two different categories: job demands and job resources [43]. This theory is assumed to apply to different occupational backgrounds, regardless of the specific demands and resources. Job demands encompass physical, emotional, societal, and organizational facets of the work that need corporal and psychological endeavor and related to specific costs [42]. In addition, job possessions consist of those emotional, physical, communal, and organizational characteristics related to a work that are required to achieve objectives, reduce job demands and costs, arouse individual development, learning, and growth [42].

Transformational leadership joins with the JD-R theory as a job resource in a way that a transformational leader is expected to enrich his followers with a social resource by developing a job setting where personnel feels flexible in serving the organization. Furthermore, a transformational leader aims to reduce job demand and increase job resources [44]. The employees perceive this in a positive way, and the leader is seen as someone supporting them at the workplace. In exchange, the employees will respond positively by performing their job with more energy and by engaging themselves in additional roles that involve creativity. Thus, transformational management may be realized as “supervisors and subordinates sort each other’s development toward an advanced degree of goodness and inspiration” [45]. Transformational leaders encourage innovative ideas from the employees. Many researchers assert as TL and EC are linked positively [46,47] by promoting workers to be more devoted to their jobs. This kind of leader motivates subordinates to focus on organizational goals over individual objectives. They respect their subordinates and appreciate their skills and innovative ideas [28].

TL supports communal benefits and assists the employees in reaching their shared objectives [48,49]. Transformational leaders are charismatic and are reputed for their capacity to accomplish changes and development [50]. Furthermore, TL consists of four elements like “idealized effect, inspirational enthusiasm, intellectual stimulus, and charisma” [51]. TL has been the subject of many studies [52] and is currently one of the most widely researched leadership-related topics, evidenced by a higher number of citations in the literature [53]. It has been reported that individuals following transformational managers are additional industrious at any level (regardless of the productivity is observed at the unit, personal, or organizational level) [54]. A similar study was conducted by Imran et al. [55], who reported that TL positively promoted job performance through a high-performance work system among service employees.

Many researchers argue that transformational leadership is a significant factor that induces subordinate’s creativity [56]. One of the fundamental tasks of transformational leadership is nurturing advancement [57]. Shin and Zhou [58] recognized a remarkable strong association between employee creativity (EC) and transformational leadership (TL). EC can be defined as a “typically individual capability to harvest innovative concepts, shape exceptionally on current principles that mirror new methods and suggest novel resolves” [59]. Studies also illustrate that it is a process that integrates the creativity of employees and creative ideas with organizational goals [60,61]. Furthermore, the study of Batovrina [62] stated as “EC is a basic feature which directs organizations ahead”.

Transformational leadership style is perhaps the most impressive way for encouraging modernization of several companies [63,64]. Similarly, according to Jyoti and Dev [65], transformational leaders are the basic agents to support creativity and innovativeness among workers. TL is known for its potential to source substantial developments in a firm’s strategy, vision, behavior, and values [66,67]. Several studies depicted a significant impact of transformational leadership on the employees’ creativity [68,69]. Nonetheless, the existence and growth of firms are based on this significant link between TL and creativity [69]. Transformational leadership supports EC through expertise improvement and knowledge sharing between groups [70]. Hence, transformational supervision is a predecessor for improving EC [71,72].

Hypothesis 1 (H1).

Transformational leadership affects employee creativity significantly.

Work engagement has become a basic concept regarding desired organizational outcomes for employees and the company [73]. Engaged workers enjoy their jobs and are dedicated [74]. Some empirical studies discovered that workers with a superior work engagement level show affirmative job attitudes and endeavors [75,76]. Based on these reasons, improving “WE” is a significant benefit for firms. Previous research disclosed thatwork possessions and mainly social assistance contribute a positive role in the growth of “WE” [77]. Indeed, studies confirmed that engaged workforces show immersed effort, extra vigor, and passion at work, delivering an improved service [78,79]. TL and “WE” have a positive relation [80]. According to Kahn [81], their sense of emotional security, significance, and readiness can arise. Such leaders can encourage their subordinates by providing challenges to them. Vila-Vázquez et al. [82] mentioned the role of TL to boost work engagement and promote the firms’ sustainability by positively persuading the workers’ welfare and engagement [19,83,84,85].

Hypothesis 2 (H2).

Transformational leadership significantly relates to work engagement.

TL leads to more open-minded employees, more prone to innovation, and more entrepreneurial [86,87]. Sundaray [88] argued that work engagement is quite difficult to imitate, which means involved personnel are determined in their responsibilities and will be extremely devoted to their job. Workers who consistently improve their work setting through competencies are more involved, leading to higher performance in their jobs [89]. Engaged workers are more prone to feel curiosity and are open to acquire new skills [90,91]. They also succeed at presenting resourceful solutions, perceiving inventively, and using flexible reasoning [92,93]. In addition, they are self-motivated to share innovative ideas with colleagues. Thus, employees who are immersed in their work are quite open to experiencing novel ideas for improving existing processes. In fact, such personnel is motivated to utilize their expertise, which is required to perform tasks innovatively. Researchers suggest these hypotheses on the basis of the review.

Hypothesis 3 (H3).

Work engagement affects worker creativity positively.

Hypothesis 4 (H4).

Work engagement mediates between transformational leadership and employee creativity.

POS evaluates the capability of an organization to manage its workforce and measure how much employees value their roles in the company [22,94]. Organizational support encourages employees to devote and involve themselves in their jobs to propose innovative methods of executing work and produce novel concepts [95]. POS is positively related to the evaluation of work performance [96], concern to help out colleagues [97], the tendency to display valuable ideas for organizational wellbeing, and affective commitment [98]. Employees also intend to preserve the benefits and economic associations they observe in shared relations [99]. Thus, POS is significantly linked to work engagement [100,101]. Stefanidis and Strogilos [102] also found that higher levels of POS affect work engagement significantly.

Hypothesis 5 (H5).

Perceived organizational support significantly relates to Work engagement.

POS is the extent to which a worker notices as his firm reassures, compliments, prizes, and identifies those who generate inventive concepts at work [103]. Yu and Frenkel [104] observed that organizational support had a constructive and significant impact on the workers’ creativity. Personnel exhibit superior creativeness with the help of higher POS [105]. Akgunduz et al. [106] concluded that employees’ creativity and perceived organizational support are not related. Nonetheless, much research for instance, [5,107,108] supported as a higher level of perceived organizational support increases the EC. Often, effective employees contribute to organizational success. When firms realize the importance of their workforce, then these workers are involved in positive organizational behaviors. Therefore, EC is also one of the affirmative behaviors. Consequently, when subordinates feel that their firms consider them valuable assets, they try to be more involved in organizational activities and eventually intend to become creative. Hence, researchers propose the subsequent hypotheses.

Hypothesis 6 (H6).

Perceived organizational support affects employee creativity positively.

Hypothesis 7 (H7).

Work engagement mediates between worker creativity and perceived organizational support.

The hypotheses tested in this study are shown in Figure 1.

3. Methodology

The banking sector of Pakistan was targeted to collect data for the present research. The authors intentionally selected the four largest private banks in Lahore to represent the financial institutions. Lahore is the provincial capital of Punjab Province and an important business hub of Pakistan. These banks are Habib Bank Limited, United Bank Limited, Allied Bank Limited, and MCB Bank. These banks were nominated for their large number of employees. Nevertheless, the researchers interacted with human resource managers of selected institutions to obtain support and agreement for data collection before starting the formal data analysis section. The authors also had an agreement with the top management of nominated firms to retain moral conduct in the data gathering procedure.

In addition, researchers acquired acquainted contracts from respondents of the study willingly. Woefully, it is described that due to the massive COVID-19 pandemic, it was problematic for authors to collect data directly from workers. Most of the banks did not allow researchers to stay on-premises for longer hours. Therefore, the authors requested human resource officials to nominate a few individuals among employees for collecting answers for the authors. Hence, the researchers provided essential guidance on how to fill out the questionnaires. Five hundred questionnaires were distributed among four banks, and 252 complete surveys were received from bankers. Hence, this study had a return rate of 50%. Data were collected within three weeks. Data were collected anonymously to avoid problems of privacy or confidentiality. The data gathering procedure was achieved in the months of April 2021 to June 2021. Ethical guidelines stated in Helsinki Declaration were followed for this research [109,110].

Measurements and Managing Social Desirability

This research adopted instruments from prior established surveys. Hence, the consistency and validity of the instrument were pretested. Thus, transformational leadership was operationalized by a 7-items questionnaire by Carless et al. [111]. One of the sample items was “My manager talks about an explicit and optimistic idea of the future”. Alpha coefficient was 0.90, which is more than the threshold value of 0.70 recommended by Nunnally (1978). Numerous tools are available to measure transformational leadership, for instance, Multifactor Leadership Questionnaire (MLQ) [112], Conger–Kanungo scale [113], the Leadership Practices Inventory [114], and the Transformational Leadership Questionnaire [115]. However, these scales are quite long and thus take a long time to be completed [116]. Many researchers have used this scale, for example, Buil et al. [117], Khan et al. [118]. Employee creativeness was computed by an adapted questionnaire by Zhou and George [108]. It has 13 statements. A sample item is “I propose novel means to attain objectives or goals”. This scale is also short and reliable as compared to the previous measures of creativity, for example, the Rebus test [119], Creative Behavior Index [120], and Biographical Index Creativity Behavior [121]. It is also faster to complete. The Cronbach alpha of this tool was 0.82 [122]. This measure is also used by researchers like [65,123]. In the same way, WE was measured by Utrecht Work Engagement scale of Schaufeli et al. [124], which contained 9 statements. One of the sample items from this tool was “At job, I realize full of vigor”. UWES-9 is preferred over UWES-17 as the structure of the UWES-9 persisted comparatively consistent in different backgrounds and over time [125]. This scale is widely used, for instance, by scholars [27,117]. Finally, perceived organizational support was measured by using the scale of Rhoades and Eisenberger [23], and this scale had 8 items. These eight items achieved high factor loading among the 36-item questionnaire of Eisenberger et al. [126] and the POS tool is considered reliable [127]. A sample item from this scale was “The organization values my contribution to its wellbeing”. A 7-point Likert scale was used by the researchers for current survey.

For handling social desirability, we went through different steps. For example, all questions of the survey were arbitrarily dispersed all over the survey. Researchers executed this technique to interrupt the possible order of answers for statements. This method is consistent with the study of Chang et al. [128]. It is also beneficial to deal with the chance of probable liking or disliking a particular variable. Correspondingly, experts inspected the survey for correctness and suitability [129,130]. It was essential to stop imprecision and confusion in a statement, for example, due to homonyms.

Additionally, the data collection personnel were asked to guide the respondents through the process. They also endorsed remedies to reduce the degree of social desirability [131,132].

Table 1. Demographics.

Demographic	Frequency	%
Gender
Female	88	35
Male	164	65
Age (Year)
20–30	155	61
30–40	71	28
40–50 & Above	26	11
Experience (Years)
1–5	134	53
5–10	74	29
10–15	25	10
15–20 and Above	19	8
Designation
Assistant Manager	123	49
Manager	88	35
Senior Manager	30	12
AVP/VP	11	4
Total	252	100

explains the demographic statistics of the sample.

4. Results and Findings

4.1. Common Method Bias

Researchers commenced data analysis to check the existence of common bias methods (CMB). Authors performed this analysis as data relevant to variables in the study were gathered from individual participants. Therefore, it is essential to clarify the presence of CMB. Moreover, the researchers decided to perceive the probable existence of CMB. In this way, as per the recommendations of Harman [133], the scholars performed a single-factor analysis in SPSS. Hence, the researchers permitted the questionnaire statements to be loaded on single-factor. According to Harman’s suggestions, when the result of a single-factor test accepts a variable that dispenses 50% variance or beyond, this is specified as data inquires for scholars’ significant attention to mention the CMB problem. Consequently, single-factor analysis results confirmed the nonexistence of a factor that was dispensing beyond 50% variance. A single factor shared the highest variance, 33.27%, which was below the cut-off value of 50%. Thus, scholars confirmed as common method bias would not be a problem in testing.

4.2. Convergent Validity, Factor Loadings, and Reliability Analysis

The researchers performed different analyses in the subsequent part to ensure reliability and validity. Hence, the scholars initially analyzed convergent validity that was validated by average-variance extracted (AVE) statistics of each concept. In addition, the researchers assessed factor loadings of entire statements of a construct and detected no issue in items loading of a concept, as the loading range of whole items exceeded the standard threshold of 0.5. Afterwards, the scholars calculated AVE of each variable via measuring sum of squares of entire item leadings and, consequently, divided by no of statements. Of these, there were 7 items of TL, and thus, the authors primarily calculated the sum of squares loading of 7 items and subsequently divided by 7. Therefore, the researchers measured the AVE of all constructs. The results of the AVE allow the authors to estimate the basis of convergent validity: when the AVE result of a specific construct is above 0.50, then the items of this factor are converging. Thus, a common threshold of convergent validity is accepted. The convergent validity (AVE) findings of each paradigm are mentioned in

Table 2. Convergent validity and reliability results.

	AVE	A	C.R
TL	0.64	0.89	0.92
EC	0.71	0.91	0.94
POS	0.65	0.90	0.91
WE	0.68	0.87	0.90

Notes: A = cronbach alpha, C.R = composite reliability.

. These results show that all AVEs exceed the cut-off value of 0.50. Therefore, it is evident that there is no convergent validity issue in the dataset. Similarly, the results of reliability were based on Cronbach alpha values of every construct and composite reliability (CR) values. A general principle to establish a scale’s reliability is that the sum of figures (α and CR) should be equivalent to or beyond 0.70. The findings of Table 2 display the nonexistence of reliability issues, since all concepts produce satisfactory values. Consequently, the authors validated as there is no reliability problem in the present study. Table 2 shows the results of convergent validity and reliability.

Table 3. Correlation, discriminant validity, and model fit indices results.

Construct	Mean	S.D.	TL	EC	WE	POS
TL	5.38	0.75	0.76	0.564 **	0.467 **	0.471 **
EC	4.89	0.73		0.78	0.375 **	0.424 **
WE	4.47	0.76			0.71	0.460 **
POS	3.28	0.71				0.74
Model fit indices	Range	Obtained
χ2/df	3.00	2.96
RMSEA	0.08	0.066
NFI	0.90	0.959
CFI	0.90	0.944
GFI	0.90	0.952

Notes: S.D. = standard deviation, ** = significant values of correlation, bold diagonal = discriminant validity results.

includes the findings of model fit indices (MFIs). The results of different MFIs were assessed against their standard range (given in Table 3), and it was established that the results produced significant outcomes. For example, the value of χ²/df was lower than 0.3 [134,135] was desirable. Similarly, the values of goodness of fit index (GFI) > 0.90, root mean square error of approximation (RMSEA) < 0.08, comparative fit index (CFI) > 0.90, and normed fit index (NFI) > 0.90 were significant as evidenced from Table 3.

The authors then performed correlation analysis and discriminant validity tests. Accordingly, they obtained the results of different model fit indices. In addition, these findings show that the correlation values among all the concepts are significantly positive and the constructs are positively interrelated. Likewise, the correlation value between transformational leadership (TL) and employee creativity (EC) is 0.564 **, which is positive and significant. The researchers calculated the square root of the AVE of every variable individually to authenticate discriminant validity. The authors compared the square root value of the AVE of every construct with correlation values after measuring the square roots of AVEs. Discriminant validity was recognized according to the criterion of Fornell and Larcker [136], when correlation statistics are lower than square root values of AVE of a variable. For instance, the square root of AVE of EC is 0.71, which is beyond the correlation figure among TL and EC (0.564 **). Thus, the discriminant validity criterion is validated in accordance with Fornell and Larcker [136].

4.3. Hypotheses Testing

The authors employed the structural equation modeling (SEM) method for hypotheses testing. SEM is usually used for discovering the relationship between latent variables in an integrated approach generally grounded on an authenticated theory. It is important to remember here that latent variables are not directly computable and are based on many indicators. SEM is a good method to display the inter-relations of latent constructs and their relations with the result. They may lead to the direct or indirect impact of latent variables. It is a more reliable technique to develop a valid model, and the experts have the opportunity to adapt or modify the model. However, the experts did not feel that there were any problems regarding regression analysis and could obtain the relations of variables merely with the outcomes. Nevertheless, traditional regression analysis tackles diverse issues to estimate the complex models and some mediators or moderators. Therefore, the current researchers favor SEM over conventional regression through SPSS. It is relatively easy to perform a regression analysis for the novice, but in social research, path analysis or structural equation modeling is more suitable to reveal interconnected links. Mediating with direct and indirect impacts is almost impractical in the case of conventional regression analysis through SPSS. Moreover, the regression assumptions using the conventional regression analysis are held responsible for being established poorly, which raises other objections to its efficiency [137].

The structural equation modeling (SEM) technique is employed to authenticate hypotheses. In fact, most contemporary authors prefer this method to study data at a higher level [138,139,140] because it allows researchers to evaluate numerous relationships simultaneously. Hence, researchers performed structural models using AMOS to estimate the hypotheses of the present research. Researchers in the preliminary section examined direct relationships theorized in Hypotheses 1, 2, 3, 5, and 6. Thus, scholars executed a structural model without the intervention of mediators.

Table 4. The results for Hypotheses 1, 2, 3, 5 and 6.

Path	Estimates	S.E	CR	p-Value	LLCI	ULCI	Decision
TL → EC	(β1) 0.44 **	0.057	7.72	0.001	0.196	0.546	Accepted
TL → WE	(β2) 0.42 **	0.056	8.37	***	0.264	0.658	Accepted
WE → EC	(β3) 0.27 **	0.071	4.00	***	0.265	0.645	Accepted
POS → WE	(β5) 0.41 **	0.053	8.89	***	0.259	0.639	Accepted
POS → EC	(β6) 0.24 **	0.052	5.72	***	0.398	0.742	Accepted
Model fit indices	Range	Obtained
χ2/df	3.00	2.86
RMSEA	0.08	0.058
NFI	0.90	0.954
CFI	0.90	0.957
GFI	0.90	0.966

Notes: ULCI = upper-limit confidence interval, LLCI = lower-limit confidence interval, **, *** = significant values.

represents findings of direct effect for Hypotheses 1, 2, 3, 5, and 6. The model fit scores were in tolerable range (χ²/df = 2.86, RMSEA = 0.064, CFI = 0.957, GFI = 0.966, NFI = 0.954). Additionally, the results of Hypothesis 1 were significant (β1 = 0.44 **, p < 0.001), confirming as TL significantly relates to EC. Thus, Hypothesis 1 is confirmed on the basis of findings. Likewise, the authors accepted Hypothesis 2 of this research by repeating the process defined earlier. Similarly, findings confirmed as TL links to “WE” positively. Therefore, Hypothesis 2 is confirmed as well (β2 = 0.42 **, p < 0.001). Moreover, Hypothesis 3 is approved since results show that work engagement relates to employee creativity positively (β3 = 0.27 **, p < 0.001). However, Hypothesis 5 is accepted as the findings demonstrate that Perceived organizational support (POS) affects work engagement (WE) significantly (β5 = 0.41**, p < 0.001). Correspondingly, Hypothesis 6 is accepted because results display POS has a significant effect on employee creativity (EC) (β6 = 0.24 **, p < 0.001).

Subsequently, researchers executed SEM to examine the mediation of “WE” between TL and EC. “WE” was also analyzed as a mediator among POS and EC. So, the authors selected bootstrapping method and chose a big bootstrapping model of 2000 via a bias-corrected confidence interval at 95%. This technique is anticipated by many researchers over the conventional method to estimate mediation effect, by Baron and Kenny [141] also recommended it. Well-known researchers such as Hayes [142] and Zhao et al. [143] criticized this technique a lot. Moreover, the Sobel test method is also objected due to low mediation power when it is compared to bootstrapping procedure [144].

Results of bootstrapping method (

Table 5. Mediation for H4 and H7.

Path	Estimates	S.E	Z-Score	p-Value	LLCI	ULCI	Decision
TL → WE→ EC	(β4) 0.47 **	0.026	4.61	***	0.178	0.392	Accepted
POS → WE→ EC	(β7) 0.45 **	0.029	3.79	***	0.196	0.286	Accepted
Model fit indices	Range	Obtained
χ2/df	3.00	2.41
RMSEA	0.08	0.046
NFI	0.90	0.969
CFI	0.90	0.962
GFI	0.90	0.969

Notes: ULCI = upper-limit confidence interval, LLCI = lower-limit confidence interval, **, *** = significant values, S.E = standard error.

) confirmed as work engagement (WE) partly mediates between TL and EC. Similarly, “WE” mediates partially between POS and EC. The authors presumed that there is a complete mediation since beta statistics are increased (β1 = 0.44 ** to β4 = 0.47 **), (β1 = 0.44 ** to β7 = 0.45 **) and are also positive (p < 0.001). In addition, model fit indices results are improved as contrasted to direct impact which elucidates that it is a good match between theory and data (χ²/df = 2.61, RMSEA = 0.052, CFI = 0.972, GFI = 0.969, NFI = 0.964). Hence, Hypotheses 4 and 7 are confirmed and “WE” also mediates amongst TL and EC. In addition, it is accepted that “WE” mediates between POS and EC. Table 5 displays the mediation effect of work engagement.

Discussion of Findings

Discussion of results is mentioned in this section. For instance, convergent validity (AVE) findings of each construct surpass cut-off value of 0.50. Thus, it is evident that there is no convergent validity problem in the dataset. Likewise, the reliability results were based on Cronbach alpha values of every construct and composite reliability (CR) values. These findings show that there is no reliability issue in this study, as all the concepts have values of more than 0.70. In addition, different model fit indices (MFIs) were evaluated against their standard range, and the results were significant. For instance, value of χ²/df = 2.96 was less than 0.3, goodness of fit index (GFI) = 0.952 which was greater than 0.90, and root mean square error of approximation (RMSEA) = 0.066 was lower than 0.08. In the same way, value of comparative fit index (CFI) = 0.944 was greater than 0.90 and normed fit index (NFI) = 0.959 was also beyond 0.90, were significant. Similarly, the results of correlation analysis were positive and explained the relationship among variables. Likewise, the correlation between TL and EC is 0.564 **, which is significant. The correlation between TL and WE is 0.467 ** which is also affirmative and shows strong relation. Moreover, relation between “WE” and EC is positive as the correlation value is 0.375 **. POS and EC were also correlated because the value is 0.424 **. Likewise, the correlation between POS and “WE” is 0.0460 **, which is significant. The findings of all the hypotheses were confirmed due to positive β values and proved as significant. For example, Hypothesis 1 was significant (β1 = 0.44 **, p < 0.001), which displayed that TL significantly related to bankers’ EC. Similarly, authors approved Hypothesis 2 as well (β2 = 0.42 **, p < 0.001) and depicted TL linked to “WE” positively. In addition, Hypothesis 3 was accepted since findings showed that work engagement significantly related to employee creativity (β3 = 0.27 **, p < 0.001). Nevertheless, Hypothesis 5 is confirmed as the results validated that perceived organizational support (POS) affected work engagement (WE) positively (β5 = 0.41 **, p < 0.001). Likewise, Hypothesis 6 was verified because findings displayed as POS had a significant effect on employee creativity (EC) (β6 = 0.24 **, p < 0.001). Moreover, beta statistics were increased (β1 = 0.44 ** to β4 = 0.47 **), (β1 = 0.44 ** to β7 = 0.45 **), and also positive (p < 0.001). Thus, Hypotheses 4 and 7 were confirmed. Therefore, “WE” mediated amongst TL and EC. Furthermore, it was accepted that “WE” also mediated between POS and EC.

5. Conclusions, Implications, and Future Recommendations

The present study is based on JD-R theory as a theoretical model to analyze the effect of (TL) and (POS) on (EC) through (WE) in the banking industry. In fact, transformational leadership joins the JD-R model as a job resource because transformational leaders are expected to develop their subordinates with a social resource through a supportive work climate where workers feel satisfaction to perform their responsibilities. When employees believe in and trust their leaders that they support them, they consequently behave positively. Moreover, the transformational leadership style helps to balance job demands and job resources [145]. Thus, these employees are expected to deliver work beyond formal tasks and may be involved in additional roles to enable creativity. Correspondingly, respondents of this research confirmed that their creativity is dependent on the support, appreciation, and assistance from their supervisors. The results also showed that TL positively develops EC in the banking industry of Pakistan. Transformational leaders may bring positive changes to their followers. The banking industry may develop transformational leadership in different ways such as cultivating a conducive work environment, working hard, being innovative, and providing mentorship. Thus, workers may feel as if they are valuable entities of their firms. In this context, the employees are more prone to learning new skills and becoming a source of inspiration for juniors. This work also revealed that TL and POS are major contributors to EC. Work engagement boosts POS and EC strongly. The findings of relation between TL and EC are in line with Koh et al. [146].

Figure 2 displays the results of the structural equation model (SEM).

The authors employed the JD-R model to explain the relation between TL and “WE”. The results (Figure 2) showed that TL brings more engagement from the employees in the workplace that is described by the fact that the workforces trust their managers more and feel more satisfied. The employees were also found to be more focused on their job. The results of this research are consistent with the findings of previous studies [147,148]. Generally, engaged employees are more inclined to develop innovative concepts and perform well in their professions. However, this is possible only if the workers are truly involved in their jobs. It is observed from the findings that employee creativity is an outcome of work engagement. When people get involved in their work, they become more creative. This is particularly important in the banking sector because of routine. Consequently, the human resource department should worry about creating an atmosphere where the employees feel more attached to their company by developing emotional and responsive affection with employers so that they feel more independent. Such results are consistent with earlier research by Khan et al. [149] and Zhang et al. [150]. When workers realize their worth and are encouraged by their leaders, they feel psychological, social, and emotional improvement and, eventually, this state directs them towards high dedication and engagement towards work. Thus, the results are consistent with the research of Duan et al. [151]. However, Zhang et al. [152] discovered that when challenge stressors are low or hindrance stressors are high, the impact of POS on EC decreases and becomes irrelevant.

5.1. Theoretical Implications

According to the results, TL and perceived organizational support are important job resources and affect employee creativity positively. Therefore, the present research expands the JD-R paradigm. Transformational leaders encourage employees and motivate them to acquire additional roles. It was theorized that workers who realize their firm supports them by providing help might demonstrate positive behaviors regarding their companies. Thus, employee creativity is also an affirmative behavior. The current study elucidates how the workers of an organization are involved in different creative tasks in the context of Pakistan’s banking industry. The phenomena of transformational supervision, work engagement, perceived organizational support, and employee creativity should be investigated empirically in the industries where employments are highly mechanical and repetitive. The findings demonstrate that TL and POS are strong contributors of “WE” and EC in the banking sector. However, transformational leadership should be investigated in different sectors. The impact of TL on EC can be investigated with different mediators or moderators as potential research.

5.2. Practical Inferences

The current research also appeals to managers. The JD-R model might be applied for improving human resource management. Based on the JD-R theory, banking professionals may design jobs to promote transformational leadership and perceived organizational support among workers for more employee engagement and more creativity at work. This model also offers guidance to professionals to take advantage of job resources such as TL and POS and gain dedication from the employees of the bank sector. Employees are dependent on transformational leaders for efficiency. Such innovative personnel are main pillars of the organization to gain success. Transformational supervisors motivate and inspire workers to produce creatively and develop a conducive environment for generating new ideas. Likewise, leaders should embrace positive behaviors which may enable the development of close relations with subordinates to boost creativity.

In order to develop the employees’ creativity, the human resource managers of the banking sector should run development programs and conduct training. Management can utilize personality tests to hire preferable individuals who possess the ability to become transformational leaders. In addition, supervision should promote an environment of self-learning for workers by recommending novel ways to complete tasks. Similarly, managers appreciate the contributions of the workforce and take care of their wellbeing to form employee responsibility and creativity for organizational performance. As the employees’ tasks are often tedious, it is useful to implement a reward system for example, by giving financial support for advanced education, granting access to interest-free personal loans bonuses, etc. Moreover, firms should introduce suitable procedures to permit idea generation.

Table 6. Hypothesis Status Summary.

No	Statement	Status	Source	Statistics
H1:	Transformational leadership has a significant impact on employee creativity	Confirmed	Koh et al. [146]	β1 = 0.44 **, p < 0.001
H2:	Transformational leadership significantly relates to work engagement	Confirmed	Ree and Wiig [148]	β2 = 0.42 **, p < 0.001
H3:	Work engagement has a significant effect on employee creativity	Confirmed	Khan et al. [149]	β3 = 0.27 **, p < 0.001
H4:	Work engagement mediates relationship amongst employee creativity and transformational leadership	Confirmed	Zhang et al. [151]	β4 = 0.47 **, p < 0.001
H5:	Perceived organizational support relates to work engagement	Confirmed	Stefanidis and Strogilos [103]	β5 = 0.41 **, p < 0.001
H6:	Perceived organizational support has a significant relation with employee creativity	Confirmed	Shantz et al. [106]	β6 = 0.24 **, p < 0.001
H7:	Work engagement mediates between perceived organizational support and employee creativity	Confirmed	Duan et al. [152]	β7 = 0.45 **, p < 0.001

Note: ** represent significant value.

presents the status of the hypotheses.

5.3. Limitations and Future Research Directions

The present research offers theoretical and applied suggestions for commercial banks to improve practices to develop a conducive innovative environment. However, it also has some limitations, for example, the scope of the study, sample choice, and various aspects which can encourage employee creativity. However, these constraints propose directions to conduct future research. Firstly, in terms of scope, this research includes merely commercial banks of Pakistan, which may restrict the applicability of the results. Hence, it would be advantageous to replicate the study in the government sector and various industries also to increase the application of findings. Secondly, the sample size can be enlargened compared to the current survey more thoroughly. Individual bankers are selected to perform the current research, which may restrain the generalizability of findings. Consequently, a large sample is suggested to deduce a wider generalization. Likewise, the study only focused on commercial banks located in Lahore city. Therefore, geographic emphasis raises opposition to the generalizability of present research. Future researchers are encouraged to include other cities such as Karachi, Faisalabad, and Rawalpindi to resolve these constraints. However, the survey participants are already employees of the four chosen banks for this research. Hence, they can be good representatives of the population of interest study. However, as with most survey studies, the convenience sampling approach can decrease external validity, such as generalizability. Thus, a more comprehensive survey design is suggested for the upcoming study.

This study employed cross-sectional data to explain relationships on its basis. This can also be a limitatio. Therefore, it embraces particular risks. Consequently, longitudinal data are recommended for forthcoming surveys. Furthermore, particular data about the mediation of work engagement among transformational leadership perceived organizational support and employee creativity are not available in the literature. Thus, future research may comprise more in-depth studies to understand the impacts of transformational leadership, perceived organizational support, and work engagement on employee creativity.