Impact of Inclusive Leadership on Employees’ Adaptive Performance: The Mediating role of psychological Capital in Education Sector

Abstract

This paper aims to investigate the effect of inclusive leadership on employee’s adaptive performance as mediated by psychological capital. The emergence of complex business environments and rapid changes in customer’s needs have forced the business organizations to respond more innovatively. For this purpose, researchers have theoretically and empirically tested different dimensions of organizational working environment. The study employed structural equation modeling to analyze the impact of inclusive leadership and psychological capital on adaptive performance. In this research, 1000 resamples were generated, and an indirect effect was computed for each of these samples to assess the mediating role of psychological capital in the relationship between inclusive leadership and adaptive performance. Data was examined by using both the descriptive and inferential analysis. The study's findings indicate that inclusive leadership has a substantial and positive influence on individuals' adaptive performance, ultimately leading to increased employee productivity. Moreover, psychological capital was identified as a mediator in the relationship between inclusive leadership and employees' adaptive performance. Inclusive leaders enhance psychological capital by fostering an environment where employees' mistakes are tolerated and by promoting optimism and self-efficacy. Employees with a high level of psychological capital are better equipped to adapt to changes effectively, promote organizational learning, and enhance their ability to cope with evolving job requirements.