LEADING OR LEAVING? THE DUAL IMPACT OF TRANSFORMATIONAL AND TOXIC LEADERSHIP ON EMPLOYEE RETENTION IN PAKISTAN'S PHARMACEUTICAL SECTOR: MEDIATING ROLE OF JOB SATISFACTION AND MODERATING EFFECT OF WORK OVERLOAD

Abstract

This study aims to investigate the impact of transformational and toxic Leadership on employee retention in Pakistan's pharmaceutical sector. It also examines how job satisfaction mediates the relationship between leadership style and employee retention, as well as how work overload moderates these relationships. Given the increasing employee turnover in this industry, this study seeks to provide practical insights for enhancing retention through effective Leadership and work environment policies. A standardized questionnaire was used to collect data from 216 employees of pharmaceutical companies in Karachi, Pakistan, employing a quantitative research methodology. The study's variables, including transformational leadership style, toxic leadership style, job satisfaction, work overload, and employee retention, were tested using software such as SmartPLS 4.0 and Structural Equation Modeling (SEM).  Additionally, before testing the structural routes, the validity and reliability of the measuring model were assessed. The results of this study show that transformational Leadership has a significant positive impact on employee retention, with job satisfaction serving as a mediating variable. On the other hand, toxic Leadership has adverse effects on both employee retention and job satisfaction. Work overload was found to reduce these relations by decreasing the positive impacts of transformational Leadership and increasing the adverse effects of toxic Leadership on employee retention. These results highlight the importance of leadership styles and workload management in fostering employee satisfaction and commitment. The limitations of this study include its geographical restriction to pharmaceutical firms in Karachi, which can influence the generalizability of the results to other sectors or areas. Personal information can be influenced by social interest bias, and the cross-sectional design limits the ability to make causal inferences. Future studies should increase the sample size across other cities and use a longitudinal design to confirm these relations over time. Pharmaceutical companies are recommended to invest in leadership development initiatives, highlighting transformative behaviors such as inspiration, empowerment, and personal attention. Systems should be established to evaluate and mitigate toxic leadership styles. To maintain the benefits of good Leadership and reduce stress, companies also need to regularly assess and manage job overload. Enhancing job satisfaction through career development, appreciation, and a positive workplace environment can help companies retain their employees.

Key words: Transformational Leadership style, Toxic Leadership style, Job Satisfaction, Work Overload, Employee Retention, Pharmaceutical Industry, Pakistan.