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Abstract

Purpose: This study examines the influence of leadership and work-life balance on employee performance through employee engagement as a mediating variable. The study hypothesizes that leadership and work-life balance positively affect employee engagement and employee performance, both directly and indirectly.


Research Method: This study employed a quantitative approach with a causal-correlational design. Data were collected through questionnaires distributed to 100 employees selected from a population of 144 employees using simple random sampling. The research variables consisted of leadership, work-life balance, employee engagement, and employee performance. Data analysis was conducted using Structural Equation Modeling–Partial Least Squares (SEM-PLS).


Results and Discussion: The findings indicate that leadership and work-life balance positively and significantly affect employee engagement and employee performance. Employee engagement also has a significant positive effect on employee performance. Furthermore, employee engagement significantly mediates the relationship between leadership and employee performance, as well as between work-life balance and employee performance.


Implications: The findings emphasize the importance of strengthening leadership quality and implementing work-life balance policies to improve employee engagement and organizational performance in the financial service industry.


Originality: This study integrates the Job Demands-Resources Model and Social Exchange Theory by positioning employee engagement as a mediating mechanism in the multifinance industry, a gap noted in previous studies.

Keywords

leadership work-life balance employee engagement employee performance

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This work is licensed under a Creative Commons Attribution 4.0 International License.

How to Cite
Rachmawati, R., Badaruddin, B., & Latief, F. (2026). Employee Engagement as the Key Mechanism Driving Leadership and Work-Life Balance Toward Employee Performance. Advances in Economics & Financial Studies, 4(2), 192–207. https://doi.org/10.60079/aefs.v4i2.853
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