Abusive supervision and business excellence: the role of psychological safety in employee performance

This study aims to examine the question of how and when the toxic leadership behavior of abusive supervision negatively affects the performance of individuals and teams within the banking industry in Punjab, Pakistan. The proposed study relies on affective events theory (AET) and conservation of resources (COR)theory to argue that abusive supervision reduces psychological safety at the individual and team levels and that the values of harmony can serve as a cultural moderator to alleviate these effects. This study used a three-wave, multilevel survey of 336 employees and 84 supervisors in commercial banks to gather data. The authors used the SPSS PROCESS macro and hierarchical linear modeling to test the mediation and moderated mediation hypotheses. Intraclass correlation indices were used to aggregate team-level constructs, and 5,000 bootstrapped resamples were used to test indirect effects. The findings of this study validated that abusive supervision has a strong negative effect on performance, and this effect is completely mediated by the impact it has on individual and team psychological safety. Harmony balances these relationships so that the negative influences of abusive supervision diminish as the values of harmony rise. The general models explained 45% and 42% of individual and team performances, respectively. The findings of this study highlight the importance of maintaining psychological safety as an organizational resource and suggest that culturally sensitive leadership training can reduce the harm of toxic supervisory behavior. Organizations should integrate civility, respect and conflict-avoidance competencies into managerial evaluations and development programs. This study contributes to the body of literature on toxic leadership by synthesizing AET and COR theory to describe the process of emotional and resource depletion through which abusive supervision works. The study takes the concept of harmony values as a cultural resilience factor and psychological safety as a dual-level mediator, advancing the development of a holistic, context-sensitive model of leadership, affect and performance in a collectivist, high power-distance environment.