LEADERSHIP STYLES AND EMPLOYEE PERFORMANCE IN NON-PROFIT ORGANIZATIONS: THE MEDIATING ROLE OF EMPLOYEE MOTIVATION AND CREATIVITY

Abstract

Non-profit organizations (NPOs) depend on employees and volunteers to deliver services and advance the NPOs’ missions. This study examines how leadership styles shape employee motivation and creativity and, in turn, performance in NPOs. Primary data were collected via a structured questionnaire from 179 NPO employees in Croatia and analyzed using PLS-SEM. Results indicate that transformational and transactional leadership styles are positively associated with motivation and creativity, which both relate positively to performance. In contrast, autocratic and laissez-faire leadership styles were either non-significant or negatively associated with these outcomes (while democratic leadership was non-significant for motivation but negative for creativity). These findings suggest that emphasizing inspirational vision, individualized support, clear goals, and fair recognition can bolster day-to-day motivation and creative effort, translating into improved performance and greater organizational stability. In terms of theory, the study clarifies motivation and creativity as dual mechanisms linking leadership styles to performance within the non-profit context. In terms of practical implications, the results offer clear guidance for leadership development and HR policy in resource-constrained NPOs.