The effects of transformational leadership and HRM practices on employee outcomes and productivity in the Greek hospitality industry during COVID-19

Purpose The present study investigates the role of “Transformational Leadership (TFL)” on employees' work engagement and its effect on their “Productivity” and “Extra-Role Customer Service” behaviors. In doing so, the present study examines the mediating role of two crucial variables, namely the creation of a “Service Climate” and the role of “Trust” that employees show toward their managers. Last but not least, this research examines the potential role of High Performance Work Systems (HPWS) as a moderator. Design/methodology/approach Partial Least Squares Structural Equation Modeling (PLS-SEM) was used on a sample of 459 customer-contact employees across thirteen 4- and 5-star Greek hotel organizations. Findings This study reveals the mechanism through which “TFL” impacts employees' productivity. Specifically, “TFL” first impacts employees' “Trust” toward their managers and helps toward creating a “Social Climate”. In turn, both “Trust” and “Social Climate” directly impact employees' “Work Engagement” who respond by showing increased “Productivity” and by exhibiting “Extra-Role Customer Service” behaviors. Nevertheless, the role of HPWS as a moderator was not confirmed. Practical implications The present study underscores the need for hotels' management to pay the required attention on creating an employment relationship based on “Trust”, as well as on creating a “Service Climate” in order for their employees to become work engaged and highly productive. Originality/value This is among the first studies that examine the “TFL” effects on employee outcomes in the Tourism and Hospitality sector, during the COVID-19 era.