- Despotic leadership is described as the dark side of leadership that has a negative effect on employee success and organizational goals. The goal of this research is to inspect the relationship between Despotic Leadership (DL) on employee performance (EP) introducing Trait Anxiety (TA) as a mediator that clarifies the influence of leadership on variable outcome and Islamic Work Ethics (IWE) as a moderator that uses to condense the negative impact of trait anxiety on employee performance. Data was gathered through an adopted and self-structured instrument from a sample of 232 employees in different banks in the twin cities of districts Mardan and Nowshera, Pakistan. To collect the data, convenience sampling technique was used. The collected data was processed and analyzed using a variety of statistical techniques and methods, including reliability analysis, descriptive statistics, correlation analysis, basic regression analysis, and Preacher and Hayes (2013) for both mediation and moderation analysis using SPSS (ver.20). The findings of this study show that, due to the pattern of despotic leadership style in the context of Pakistani banks, despotic leadership has a strong and negative association with employee performance, while trait anxiety partially mediates the relationship between despotic leadership and employee performance. According to the findings, Islamic work ethics moderates the relationship between trait anxiety and employee performance. The study's implications are also discussed.
Key words: Despotic Leadership (DL), Trait Anxiety (TA), Islamic Work Ethics (IWE), Employee Performance (EP).