Inclusive Leadership and Employees Pro-Social Rules Breaking in Banking and Insurance Sector of Peshawar: Mediating Role of Psychological Safety and Moderating Effect of Leader-Member Exchange

Abstract

Abstract

This research critically investigated the intervening effect of psychological safety and the role of Leader member exchange (LmX) as a moderator on inclusive leadership and employee pro-social rule-breaking. The study analyzed the data gathered via survey questionnaires from 250 workers in the insurance and banking sectors in Peshawar. The validity and reliability of the scales were verified, and hypotheses were tested. The research comes to the conclusion that inclusive leadership has a positive effect on Pro-Social Rules breaking (PsRb). The research also found that psychological safety affects the relationship between Inclusive leadership (InCl) and employees’ pro-social rules breaking (PsRb). The researcher also noticed that the relationship between InCl and Psychological Safety (PsySafety) is moderated by LmX, which indicates that high LmX implies a high relationship between InCl and PsySafety and low LmX means a low relationship between the two. The study recommended that the insurance and banking sectors should adopt inclusive leadership characteristics to encourage employees to work for organizational benefits, customers and their colleagues.

        Keywords: inclusive leadership, pro-social rules breaking, psychological safety, leader-member exchange