TOXIC LEADERSHIP, EMPLOYEE WELLBEING, AND TURNOVER UMKM EMPLOYEE INTENTIONS IN TANJUNGPINANG CITY:THE MODERATION ROLE OF PSYCHOLOGICAL CAPITAL
Keywords:
Toxic Leadership, Employee Wellbeing, Turnover Intention, Psychological CapitalAbstract
Purpose: This study aims to analyse the effect of toxic leadership on employee wellbeing and turnover intention among Micro, Small and Medium Enterprise (MSME) employees in Tanjungpinang City, and to examine the moderating role of psychological capital (PsyCap) in both relationships. The MSME context in Tanjungpinang is significant given its highly personal owner-employee leadership dynamics, minimal formal employment protection, and competitive market conditions in a border island city
Methods: The study employs a quantitative explanatory approach with structured surveys administered to 194 permanent employees from four MSME sectors (culinary, trade, services, and maritime/fisheries) in Tanjungpinang City using proportionate stratified random sampling. Analysis uses Partial Least Squares Structural Equation Modeling (PLS-SEM) with SmartPLS 4.0
Findings: toxic leadership negatively and significantly affects employee wellbeing (β = −0.494; p < 0.001); toxic leadership positively and significantly affects turnover intention (β = 0.518; p < 0.001); employee wellbeing negatively and significantly affects turnover intention (β = −0.306; p = 0.003); PsyCap significantly moderates the effect of toxic leadership on employee wellbeing (β = 0.228; p = 0.009); and PsyCap significantly moderates the effect of toxic leadership on turnover intention (β = −0.184; p = 0.028).
Originality/value: The model explains 72.8% of employee wellbeing variance and 70.1% of turnover intention variance. Findings confirm PsyCap as a psychological buffer that attenuates the destructive impact of toxic leadership within the MSME ecosystem. Practical implications point to the urgency of structured PsyCap enhancement programs as employee retention strategies by MSME associations and the Tanjungpinang City government.
Received: 20/03/2026 Revised: 05/05/2026 Accepted: 28/07/2026
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