This study examines the impact of transformational leadership on employee performance in small and medium-sized enterprises (SMEs) in Abuja, Nigeria. It focuses on the dimensions of Inspirational Motivation (IM), Individualized Consideration (IC), and Intellectual Stimulation (IS). The study population included approximately 15,000 SMEs in Abuja, with a sample size of 450 determined using Yamane’s formula, which accounts for a 20% non-response rate. Using a survey research design, data were collected through structured questionnaires and analyzed using multiple regression analysis to assess the relationships between leadership dimensions and employee performance outcomes. The findings reveal that IM (B = .645, p < .001) and IC (B = .314, p < .001) significantly enhance employee performance, fostering engagement, retention, and productivity, while IS (B = .011, p = .469) had a minimal impact due to resource and institutional constraints. The study recommends prioritizing IM and IC to address immediate performance challenges and employee retention while progressively incorporating IS as a long-term strategy to promote innovation.
Keywords: Employee Performance, Transformational Leadership, individualized consideration, inspirational motivation, intellectual stimulation, leadership strategies
