Impact of servant leadership on employee life satisfaction through Islamic work ethics in the Islamic banking industry

Abstract

The current study proposes a novel conceptual model in which Islamic work ethics has a mediating role in the relationship between servant leadership and employees’ life satisfaction within Pakistan’s banking sector. The model draws on the theory of leader-member exchange (LMX). Data from a sample of 240 were evaluated using structural equation modeling using SmartPLS 3.2.7 software. The findings indicate that servant leadership significantly impacts employees’ life satisfaction. Furthermore, Islamic work ethics mediated this effect. This study introduces ground-breaking bank inputs by creating a new integrated model based on LMX theory. While the impact of several dimensions of Islamic work ethics on employees’ life satisfaction has been widely investigated, the present study is the first to explore the roles of servant leadership and Islamic work ethics in leveraging bank employees’ life satisfaction. The results suggest that bank managers should enact servant leadership in their business and serve their employees ethically to improve their life satisfaction. Additionally, this study provides key theoretical contributions to the literature on Islamic banking.