Employee performance is a key determinant of how effectively Islamic banking institutions operate, especially in sustaining service excellence, ethical accountability, and overall organizational outcomes. This study examines how Ihsan Achievement-Oriented Leadership (IAOL) influences employee performance by assessing ta’awun as a mediator and tasamuh as a moderator within Islamic banks in East Java. The research used a quantitative explanatory design and applied Partial Least Squares Structural Equation Modeling. Data were collected through an online questionnaire from 125 Islamic banking employees selected through purposive sampling, with snowball recruitment supporting respondent distribution. The findings indicate that IAOL positively and significantly affects employee performance (β = 0.533, t = 5.934, p < 0.001) and also significantly enhances ta’awun (β = 0.706, t = 16.564, p < 0.001). Ta’awun, in turn, positively and significantly affects employee performance (β = 0.302, t = 2.363, p = 0.019) and partially mediates the IAOL–performance relationship through a significant indirect effect (β = 0.213, t = 2.285, p = 0.023). Moreover, tasamuh significantly amplifies the positive association between IAOL and employee performance. Overall, the results highlight the value of combining ihsan-oriented leadership with cooperative and tolerant workplace practices to improve employee performance in Islamic banking institutions.
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