Relationships between leader behaviors, employee well-being, and profit target achievement: evidence from a company-wide survey in Japan

What kinds of leader behaviors can simultaneously promote employee well-being and financial performance? Sustained organizational success requires advancing both outcomes, yet how leadership behaviors are associated with these outcomes remain unclear. Using four consecutive years of company-wide survey data from a Japanese homebuilder, we examined relationships between nine leader behaviors and branch-level employee well-being, as well as branch-level financial performance. After confirming the factor structure of the behavior items, we conducted hierarchical linear models and cross-lagged panel models. We found that three types of leader behaviors (employee development, communication, and sustainable work efficiency) were positively related to branch-level employee well-being, after controlling for branch demographics and year effects. In contrast, one behavior (workplace strategy, defined as clarifying the branch strategy and individual goals) was positively related to financial performance. In the longitudinal analyses, leader behaviors were not associated with subsequent employee well-being, whereas higher employee well-being was consistently associated with higher subsequent ratings of leader behaviors. We discussed priorities for allocating limited leadership resources to foster a happy workplace and contribute to financial outcomes, as well as the potential mechanisms underlying the observed associations between leader behaviors and both outcomes.