The impact of extrinsic and intrinsic motivation on job satisfaction: The mediating role of transactional leadership

In the context of middle eastern countries like Saudi Arabia, the existing literature lacks in sufficient research on the impact of Transactional Leadership (TL) on job satisfaction (JS) and the indirect impact of extrinsic motivation (EM) and intrinsic motivation (IM) on achieving JS. This research investigates the direct influence of TL on JS and the indirect impact of EM and IM on achieving JS. The study defines compensation satisfaction (CS) and performance-based incentives (PBIs) as factors driving EM and employee empowerment (EE), while employee recognition drives (ER). Data were collected through survey questionnaires from 300 managers across different small, medium-sized, and large enterprises in Saudi Arabia. The analysis utilized partial least squares structural equation modeling. The findings indicate that both EM and IM significantly influence JS. The relationship between these motivations and job satisfaction is moderated by TL. Specifically, TL enhances the positive effects of EM on JS while attenuating the impact of IM. These results underscore the pivotal role of TL in establishing a connection between employee motivation and their job satisfaction level. This highlights the importance for businesses to cultivate a leadership style that aligns with the underlying motivations of their workforce, leading to improved staff morale and increased productivity. This study contributes a unique perspective by emphasizing TL’s significance within the organizational framework, particularly concerning job satisfaction and motivation in an evolving work landscape characterized by automation and remote work practices.