Digital leadership and employee performance: The mediating role of organizational brilliance in the banking sector

Abstract

This paper investigates how digital leadership influences employee performance within Palestinian commercial banks and how organizational brilliance mediates this relationship. A quantitative research design was used by conducting a cross-sectional survey of 380 employees. Structural equation modelling (SEM) was employed to test both direct and indirect associations between the variables of the study. The results indicate that digital leadership positively impacts organizational brilliance, and organizational brilliance has a significant positive impact on employee performance. Nevertheless, the linear correlation between digital leadership and employee performance is no longer statistically significant when organizational brilliance is added, which means that the mediation effect is complete. These findings indicate that digital leadership enhances the performance of employees by enhancing organizational capabilities, including innovation, knowledge management, and teamwork working practices. The research points out that the success of digital leadership depends on the capacity of the organization to convert the leadership practices into facilitative internal environments. In practice, the conclusion means that digital technologies alone are not enough to be applied in banking institutions, and organizations should invest in the development of leadership and organizational systems that promote learning, innovation, and employee engagement. This will be able to improve the quality of services, efficiency, and competitiveness in the long term, especially in developing economies that are experiencing a high rate of digitalization.