Charting creativity in government: the relationship between transformational leadership, psychological empowerment and employee creative performance

Purpose This paper aims to explore the link between transformational leadership and employee creativity through the lens of self-determination theory, with psychological empowerment serving as a mediating factor. Additionally, it will examine how financial rewards and job formalization might moderate this relationship. Design/methodology/approach The research uses a survey approach, targeting employees and supervisors from government ministries in the United Arab Emirates through purposive sampling. The study collected data from 254 participants via an online questionnaire and analyzed it using the partial least squares structural equation modeling technique in SmartPLS4. Findings The results show that transformational leadership has a significant impact on the psychological empowerment and creative performance of employees. The relationship between transformative leadership and employee creative performance is mediated by psychological empowerment. Additionally, the moderating effects of financial rewards and job formalization are explored. The findings do not support the moderating role of job formalization, and financial rewards negatively moderate the transformational leadership–psychological empowerment relationship. Research limitations/implications The research is centered on a particular cultural setting and government ministry employees, thus limiting the generalizability. Originality/value This study explores at how transformational leadership affects employee creativity, considering the role of psychological empowerment and how financial rewards and job structure might influence this relationship.