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Abstract

With the growing recognition of inclusive leadership in organizational practices, understanding its influence on employee happiness has become increasingly important. This study examines the relationships among inclusive leadership, thriving at work, workplace happiness, and workaholism within Indonesian state-owned enterprises. In 2024, we surveyed 413 employees from various state-owned Indonesian companies. Participants completed scales measuring inclusive leadership, thriving at work, workplace happiness, and workaholism. Data were analyzed using the SPSS PROCESS macro program, specifically Model 7, to test the moderated mediation hypotheses. The results demonstrate that inclusive leadership positively influences workplace happiness and thriving. Additionally, thriving at work mediated the relationship between inclusive leadership and workplace happiness. Interestingly, workaholism positively moderated this mediated relationship, indicating that employees with higher workaholic tendencies experienced greater happiness when thriving at work. Organizations should, therefore, emphasize inclusive leadership practices that promote personal growth, particularly in cultures valuing high performance and dedication, such as Indonesia. For future research, comparative analyses involving different cultures and industries are recommended to deepen our understanding of these dynamics globally.

Plain Language Summary

Inclusive leadership and thriving at work boost employee happiness in Indonesia’s hardworking culture

This study aims to explore how inclusive leadership affects employees’ happiness in the workplace, particularly by promoting personal growth (“thriving”) and considering the impact of excessive work habits (“workaholism”) in Indonesian organizations. In 2024, we surveyed 413 employees working in various state-owned Indonesian companies. The results showed that inclusive leaders who actively support and involve their employees significantly improve employee happiness by helping employees feel energized and grow professionally. Interestingly, we found that employees who tended to work excessively, commonly referred to as workaholics, became even happier when they felt that they were growing and thriving at work. These findings suggest that organizations, especially in performance-oriented cultures such as Indonesia, could benefit from adopting inclusive leadership styles that encourage employee development. Further studies comparing these relationships in different countries and industries will help to understand better how leadership approaches and work habits influence employee happiness in diverse settings.

Keywords

inclusive leadership workplace happiness thriving at work workaholism Indonesian culture

Introduction

Contemporary global workplaces have increasingly shaped the dual demands of high performance and employee well-being. Amid technological disruption, economic uncertainty, and evolving employee expectations, organizations face the challenge of creating productive yet psychologically supportive environments (OECD, 2023). These tensions are particularly evident in high-pressure, performance-oriented sectors where long working hours and rigid expectations are the norm. In emerging economies, such as Indonesia, these dynamics are especially visible within state-owned enterprises (SOEs), which are public institutions that play a pivotal role in national economic development. As of 2024, Indonesian SOEs employ approximately 1.6 million workers across strategic sectors, such as energy, finance, and infrastructure (Ministry of State-Owned Enterprises of the Republic of Indonesia, 2024). These organizations operate under hierarchical structures and collectivist cultural values that emphasize loyalty and discipline but often overlook employee well-being (Hofstede, 2001; International Labour Organization, 2023).

In such rigid institutional contexts, inclusive leadership offers a promising pathway for fostering both performance and happiness. Defined by openness, accessibility, fairness, and the active encouragement of diverse perspectives (Roberson & Perry, 2022), inclusive leadership creates safe psychological environments in which employees feel valued, respected, and empowered (Nejati & Shafaei, 2023; Srimulyani et al., 2023). These inclusive environments are particularly vital in rigid, top-down institutions, such as SOEs, where voice, and agency may otherwise be constrained. Empirical studies have consistently demonstrated that inclusive leadership enhances positive workplace outcomes, including innovation, organizational commitment, and extra-role behaviors (Javed et al., 2019; Ly, 2024; Vakira et al., 2023) and, more recently, with increased workplace happiness, largely through relational trust and reduced interpersonal strain (Alghofeli et al., 2024; Choi et al., 2017; Li et al., 2024; Y. Liu et al., 2024).

These positive outcomes can be understood through the lens of three major theories: the First Leader-Member Exchange (LMX) theory emphasizes that high-quality leader-follower relationships foster trust and emotional support, which promote motivation and psychological well-being (Graen & Uhl-Bien, 1995). Second, Self-Determination Theory (SDT) explains that employee well-being is strengthened when leaders satisfy their psychological need for autonomy, competence, and relatedness (Deci & Ryan, 2000; Jha et al., 2024b). Third, Social Cognitive Learning Theory (SCLT) argues that the role of leaders as behavioral role models, particularly in high-stake environments such as SOEs (Bandura, 1986), and inclusive leaders who exhibit empathy, fairness, and developmental support, can inspire employees to internalize positive work behaviors and emotions, including happiness. mediated by thriving at work, a state characterized by vitality and continuous learning (Porath et al., 2012). Thriving is nurtured when individuals are given room for autonomy, recognition, and opportunities for growth, conditions that inclusive leaders facilitate (Srivastava & Singh, 2022; Xu et al., 2023). Thriving employees tend to be more resilient, energetic, and intrinsically motivated, which in turn contributes to greater happiness. However, the strength of this mediating effect may not be uniform among individuals.

Workaholism, which is defined as a compulsive drive to work excessively and obsessively, may moderate the relationship between thriving and happiness. On the one hand, workaholics often experience chronic stress and emotional depletion, which can dampen the positive emotional effects of thriving (Kim, 2019; Schaufeli et al., 2009). However, emerging studies suggest that under the right conditions, such as when work is experienced as meaningful and growth-enabling, workaholism can amplify the emotional rewards of thriving (Clark et al., 2016; Di Stefano & Gaudiino, 2019). Clark et al. (2016) found that workaholic employees in learning-rich environments reported greater energy and engagement, suggesting that thriving may serve as a positive outlet for their internal drive. In collectivist cultures such as Indonesia, where overwork is often valorized and equated with moral responsibility (Hofstede, 2001; Tri Wulandari & Pratama Hafidz, 2023), this positive moderation effect may be even more pronounced. Through the lens of SCLT, inclusive leaders play a critical role in shaping how workaholics interpret thriving, serving as models that normalize healthy ambition and growth.

Despite a growing body of literature on inclusive leadership, two major gaps remain. First, thriving at work is under-examined as a mediating mechanism linking inclusive leadership to workplace happiness, especially in non-Western, collectivist, and hierarchical settings. Second, the moderating role of workaholism in this pathway is largely unexplored, particularly in the context of Indonesian SOEs, where cultural norms may alter its psychological effects. Addressing these gaps is vital for understanding how leadership and personal work orientation interact to support sustainable well-being.

In response, this study proposes and empirically tests a moderated mediation model to examine (1) whether inclusive leadership positively influences workplace happiness (H1); (2) whether this relationship is mediated by thriving at work (H2); and (3) whether workaholism moderates the mediating effect of thriving on the relationship between inclusive leadership and workplace happiness (H3).

To answer these questions, this study employed a purposive sampling strategy, targeting employees from three major Indonesian SOE sectors: energy, finance, and infrastructure. Data were collected from 410 full-time employees working in high-demand bureaucratic environments, where leadership behavior is particularly sequential. By drawing on LMX, SDT, and SCLT frameworks, this study makes three key contributions: (1) advancing the theoretical understanding of how inclusive leadership drives happiness through thriving; (2) providing empirical insight into the culturally contingent role of workaholism; and (3) offering context-specific evidence from Indonesia to enrich cross-cultural applications of leadership and well-being theories.

Literature Review and Hypotheses Development

Inclusive Leadership and Leader Member Exchange Theory (LMX)

Inclusive leadership refers to leadership behaviors that actively value and engage diverse employees by fostering openness, fairness, accessibility, and proactive engagement (Carmeli et al., 2010; Roberson & Perry, 2022). Its core characteristics include promoting psychological safety, encouraging participation, recognizing individual contributions, and facilitating equitable access to decision making (Randel et al., 2018; Shore et al., 2018). These behaviors create a work environment in which all employees feel respected, empowered, and heard of.

The theoretical foundation for inclusive leadership in this study draws from LMX theory, which posits that leaders develop unique dyadic relationships with subordinates and high-quality exchanges foster emotional support, trust, and performance (Graen & Uhl-Bien, 1995). In rigid and hierarchical settings, such as Indonesian SOEs, inclusive leadership enables psychological safety and voice behavior, mitigating power distance, and fostering a sense of belonging (Alghofeli et al., 2024; Choi et al., 2017). These leader-member relationships are essential in high-pressure environments, where inclusive leadership can buffer employees against the negative consequences of top-down control and cultural conformity.

Inclusive Leadership and Self Determination Theory (SDT)

Inclusive leadership also aligns closely with the tenets of SDT, which posits that human well-being and optimal functioning are achieved when three basic psychological needs are fulfilled: autonomy (the need to feel in control of one’s actions), competence (the need to feel effective), and relatedness (the need to feel connected to others; Deci & Ryan, 2000). Inclusive leaders support these needs by encouraging employee participation, providing development feedback, and fostering relational trust and inclusion (Jha et al., 2024a; Shafaei & Nejati, 2024).

In high-performance work environments such as Indonesian SOEs, where employee voice is often constrained by hierarchical structures, fulfilling this psychological need becomes critical. Inclusive leadership practices create a sense of autonomy by inviting employees into decision-making processes, enhancing competence through empowerment and learning opportunities, and fostering relatedness by building interpersonal respect and fairness (Srivastava & Singh, 2022; Xu et al., 2023). Through this SDT lens, inclusive leadership contributes not only to performance, but also to intrinsic motivation and workplace happiness by satisfying foundational psychological needs in culturally and structurally constrained settings.

Inclusive Leadership and Social Cognitive Learning Theory (SCLT)

The influence of inclusive leadership can also be understood through SCLT, which asserts that individuals learn attitudes, behaviors, and emotional responses by observing and modeling others, especially those in positions of authority (Bandura, 1986). Leaders serve as powerful role models whose behaviors can shape employee mindsets and norms, particularly in settings where power hierarchies are salient, and conformity is culturally reinforced.

Through their consistent demonstration of empathy, fairness, and empowerment, inclusive leaders model inclusive norms that employees internalize and replicate in their own workplace behavior (Y. Liu et al., 2024; Randel et al., 2018). This modeling process is especially relevant in Indonesian SOEs, where employees often learn behavioral expectations by observing leader conduct. In such contexts, inclusive leadership not only impacts individual employees directly but also shapes the broader organizational climate by cultivating a culture of respect, trust, and mutual learning (Clark et al., 2016; Tri Wulandari & Pratama Hafidz, 2023). Through the lens of SCLT, inclusive leadership is therefore a mechanism of cultural and behavioral transmission, fostering both individual growth and collective workplace well-being.

Inclusive Leadership and Happiness at Work

Happiness at work is a multidimensional construct encompassing affective experiences (e.g., positive emotions), cognitive evaluations (e.g., job satisfaction), and a sense of meaningful engagement (Fisher, 2010; Singh & Banerji, 2022). It integrates both hedonic (pleasure-based) and eudemonic (growth- and purpose-based) well-being (Jha et al., 2024a), and is empirically linked to productivity, creativity, retention, and affective commitment (Sedlářík et al., 2024). Inclusive leadership has been shown to promote workplace happiness by fostering psychological safety, reducing ambiguity, and ensuring that employees feel respected, heard, and valued (Choi et al., 2017; Roberson & Perry, 2022; Shore et al., 2018). Through fairness, clarity, and empowerment, inclusive leaders help to reduce work-related stress and reinforce relational trust (Alghofeli et al., 2024; Cook & Glass, 2014).

Drawing on SDT, workplace happiness arises when employees’ need for autonomy, competence, and relatedness is fulfilled (Deci & Ryan, 2000). Inclusive leadership directly supports these needs by involving employees in decision making, recognizing their contributions, and fostering interpersonal respect (Jha et al., 2024a; Shafaei & Nejati, 2024). These practices nurture both cognitive and emotional dimensions of workplace happiness.

In high-pressure, collectivist work cultures like Indonesia—especially within state-owned enterprises (SOEs) characterized by hierarchical structures and strict performance targets—this leadership style is particularly impactful. Employees in such settings often experience chronic stress and limited individual agency (International Labour Organization, 2023; Wulandari et al., 2023). Inclusive leaders act as relational buffers by developing high-quality LMX, providing emotional support, reducing perceived power distance, and strengthening affective commitment (Carmeli et al., 2010; Graen & Uhl-Bien, 1995).

Although inclusive leadership has been empirically linked to innovation, engagement, and extra-role behaviors (Javed et al., 2019; Ly, 2024), its direct influence on workplace happiness remains underexplored, particularly in non-Western, hierarchical contexts. This study addresses this gap by proposing the following hypothesis:

Hypothesis 1 (H1): Inclusive leadership has a positive effect on workplace happiness

Thriving at Work as a Mediator

Thriving at work is a dynamic psychological characteristic of the dual experience of vitality—feeling energized—and learning—the continuous development of skills and knowledge (Porath et al., 2012; Spreitzer et al., 2020). This reflects an optimal condition in which employees are both psychologically engaged and growing, which enhances motivation, resilience, and innovation (Di Milia & Jiang, 2024; Yang et al., 2022). Thriving is not a static trait but rather a context-dependent state, heavily influenced by workplace conditions such as autonomy, constructive feedback, perceived support, and opportunities for learning These environmental factors shape individuals’ sense of competence, agency, and connectedness—core elements for sustained engagement.

Inclusive leadership plays a fundamental role in thriving by establishing a psychologically safe and empowering work climate. Leaders who encourage initiative, recognize contributions, and include employees in decision-making foster an environment where employees feel valued and capable of advancing in their roles (Randel et al., 2018; Srivastava & Singh, 2022; Xu et al., 2023). According to SDT, thriving arises when employees’ psychological needs for autonomy, competence, and relatedness are fulfilled——needs that inclusive leaders actively support through participatory, emphatic, and feedback-oriented behaviors (Deci & Ryan, 2000; Jha et al., 2024a; Shafaei & Nejati, 2024).

This mediating mechanism is especially salient in high-pressure collectivist contexts such as Indonesia, where prolonged working hours and rigid hierarchical structures often constrain employee agency and increase stress (Wulandari et al., 2023). In such environments, thriving serves as a psychological buffer that protects employees from burnout, while reinforcing positive emotional states and satisfaction. Employees who feel they are learning and progressing become more resilient and better equipped to navigate demanding workplace conditions (Porath et al., 2012).

Although thriving has been found to mediate the relationship between various leadership styles, such as transformational, ethical, and inclusive, and outcomes, such as engagement, creativity, and commitment (Randel et al., 2018; Spreitzer et al., 2020), limited empirical attention has been paid to its mediating role between inclusive leadership and workplace happiness, particularly in collectivist and high-demand settings. This study addresses that gap by proposing the following hypothesis:

Hypothesis 2 (H2): Thriving at work mediates the relationship between inclusive leadership and workplace happiness.

Workaholism as a Moderator

Workaholism is a maladaptive behavioral tendency characterized by an uncontrollable inner drive to work excessively and obsessively, often at the expense of personal well-being and nonwork life domains (Andreassen, 2014). While it is frequently associated with detrimental outcomes such as burnout, psychosomatic complaints, and decreased life satisfaction (Kim, 2019; Sarfaraz et al., 2022), recent studies suggest that its impact is context-dependent and shaped by cultural norms and leadership dynamics (Di Stefano & Gaudiino, 2019). In collectivist, performance-oriented cultures such as Indonesia, overworking is often perceived as a reflection of moral integrity, loyalty, and dedication (Hofstede, 2001; Tri Wulandari & Pratama Hafidz, 2023). As a result, workaholic employees may not view their compulsive behavior as dysfunctional but as morally acceptable or even admirable.

This phenomenon can be explained by using multiple lenses. From the perspective of SCLT (Bandura, 1986), employees internalize behavioral norms through the observation of influential role models. In work cultures where overwork is rewarded and normalized, the motivational signals of inclusive leadership may be overridden by internalized achievement drivers. Similarly, according to LMX theory (Graen & Uhl-Bien, 1995), high-quality leader-member relationships foster affective outcomes, such as trust, emotional support, and engagement. However, for workaholic employees, priority is often given to task accomplishment rather than relational exchange. Their focus on productivity and achievement may diminish the emotional gains typically derived from inclusive leadership practices (Akinwale et al., 2024; T. Liu et al., 2022). Even when thriving at work occurs, workaholic individuals may interpret thriving narrowly through a performance lens, emphasizing output rather than personal growth, thus limiting its translation into happiness (Di Stefano & Gaudiino, 2019).

SDT further explains that well-being is enhanced when employees’ needs for autonomy, competence, and relatedness are fulfilled (Deci & Ryan, 2000). Inclusive leadership typically fosters these needs by empowering employees, enhancing their sense of competence, and cultivating relational trust. However, workaholic employees often derive satisfaction from external performance indicators rather than from relational or emotional fulfillment, weakening the psychological pathways that connect inclusive leadership and thriving with happiness.

Recent empirical findings support this moderating relationship. Studies indicate that workaholism weakens the positive relationship between thriving and well-being by reframing thriving experiences as performance reinforcement rather than emotional gain thriving (Clark et al., 2016; Di Stefano & Gaudiino, 2019). Employees with low workaholism are more likely to translate thriving into happiness, while those with high workaholism may experience diminished emotional returns despite thriving. Their compulsive achievement orientation suppressed the emotional benefits of thriving, limiting the pathway from inclusive leadership to workplace happiness.

This suggests that workaholism acts as a boundary condition that moderates the indirect effect of inclusive leadership on workplace happiness through thriving at work. Employees with low workaholism are more likely to interpret thriving as intrinsically rewarding, allowing them to experience greater workplace happiness. Conversely, employees with high workaholism are less able to convert thriving to happiness. As their compulsive focus on achievement overrides the emotional and relational benefits of growth, we propose the following hypothesis.

Hypothesis 3 (H3): Workaholism moderates the mediating effect of thriving at work on the relationship between inclusive leadership and workplace happiness, such that the indirect effect is weaker among employees with high workaholism

The conceptual model (Figure 1) visualizes these proposed relationships by integrating LMX, SDT, and SCLT to explain how leadership behaviors and personal work orientations interact in shaping employee well-being within the high-pressure, collectivist context of Indonesian SOEs.

Figure 1.

Research model.

Methods

Research Design and Sample

This study employed a quantitative cross-sectional survey design to examine a moderated mediation relationship involving psychological constructs (Creswell & Creswell, 2018). The research focused on employees working in Indonesian SOEs across high-pressure sectors, such as healthcare, banking, and technology-based industries, where performance demands are particularly intense (Kuriakose & Kuriakose, 2025; Srimulyani et al., 2023; Tri Wulandari & Pratama Hafidz, 2023).A purposive sampling technique was used, targeting employees working in hierarchical and performance-driven environments where inclusive leadership, thriving, and workaholism are likely to manifest critically (Etikan et al., 2016).

Data were gathered through an online survey distributed between April and July 2024 through the official HR channel. Of the 475 responses, 63 were incomplete and excluded. The final valid sample comprised 413 respondents, achieving an effectiveness of 86.9%. As shown in Table 1, the demographic profile of respondents reveals that 52% were females, and the majority (67%) were aged between 20 and 30 years. Regarding marital status, 62% of the participants were unmarried. The respondents’ work arrangements included hybrid (46%), fully onsite (42%), and fully remote (12%) models. The final sample size exceeded the minimum requirements for structural equation modeling with medium effect size and power ≥0.8 (Hair et al., 2010).

Table 1.

Respondent Profile.

Profile	Sum	Percent
Age
20–30	278	67
31–40	97	23
>40	38	9
Gender
Male	197	48
Female	216	52
Marital status
Single	255	62
Married	158	38
Working method
Online	51	12
Offline	174	42
Hybrid	188	46

Source. Author’s own work.

Ethical Considerations

Formal ethical clearance was not required as no sensitive or identifiable personal data were collected. The study strictly followed ethical standards for social science research (Emanuel et al., 2000; Resnik, 2024). Participants were fully informed about the study purpose, assured of confidentiality and anonymity, provided informed consent, and informed of their right to voluntary withdrawal at any stage.

Measurement

All constructs were measured using a validated multi-item five-point Likert scale (5 = strongly agree, 1 = strongly disagree). The inclusive leadership variable was assessed through three dimensions: openness, accessibility, and availability, as previously utilized by Carmeli et al. (2010), with 9 question items, including “The manager is attentive to new opportunities to improve work processes.” The workplace happiness variable was measured by adopting the measurement previously used by Salas-Vallina and Alegre (2021), which consisted of nine items, including “I would be very happy to spend the rest of my career with this organization.” The thriving at work variable was assessed using the scale established by Porath et al. (2012), comprising two dimensions: learning and vitality, each consisting of five items (a total of ten items), including the statement, “I eagerly anticipate each forthcoming day.” The workaholism variable is measured by adopting the measurement previously used by Schaufeli et al. (2009) comprising two dimensions: excessive and compulsive, each containing five items (a total of ten items), such as “I seem to be in a hurry and racing against the clock” and “I feel that there is something inside me that drives me to work hard.” All the scales were translated into Bahasa Indonesia and back-translated to ensure semantic consistency.

Analysis Approach

Data analysis was conducted using IBM SPSS Statistics and Hayes’ PROCESS macro (2018), specifically Model 4 for mediation and Model 7 for moderated mediation. These models are widely used and theoretically appropriate for examining indirect and conditional effects in psychological and organizational research (Preacher et al., 2007). The bootstrapping method with 10,000 resamples was applied to estimate confidence intervals for mediation and moderated mediation paths. As recommended by Hayes (2022), bootstrapping does not assume normality of the sampling distribution, thus supporting robust inference without requiring strict normality. While PROCESS does not produce global model fit indices as in SEM, measurement model validity was confirmed through Confirmatory Factor Analysis (CFA), with all constructs demonstrating acceptable fit. Control variables (age, gender, marital status, and work arrangement) were included in all models. Together, these steps ensure the robustness and theoretical alignment of the analytical approach used in this study.

Results

Confirmatory Factor Analysis and Reliability

The instruments used in this study are also instruments that have been tested in previous studies. Before conducting the CFA test, this study tested the adequacy of the required sample by looking at the KMO MSA and Bartlett’s Test values. The KMO MSA value in this study was 0.811. Therefore, it can be said that the KMO MSA value is greater than the provisions (0.811 ≥ 0.5), and the Bartlett’s test value with Chi-squares is significant at 0.000. Thus, the number of samples in this study is said to be sufficient to conduct confirmatory factor analysis.

Confirmatory Factor Analysis (CFA) was conducted to validate the measurement model. All standardized factor loadings exceeded the recommended threshold of 0.50, and the Average Variance Extracted (AVE) values ranged between 0.775 and 0.822, surpassing the minimum criterion of 0.50 (Fornell & Larcker, 1981; Hair et al., 2010). Composite Reliability (CR) values and Cronbach’s alpha values were above .70 for all constructs (Fornell & Larcker, 1981; Neuman, 2014), indicating strong internal consistency and construct reliability. The full CFA results are presented in Table 2.

Table 2.

Confirmatory Factor Analysis.

Variables	Indicators	Factor Loadings	AVE	CR
Inclusive Leadership	IL1	0.823	0.776	0.922
	IL2	0.831
	IL3	0.677
	IL4	0.838
	IL5	0.808
	IL6	0.652
	IL7	0.730
	IL8	0.813
	IL9	0.809
Thriving at work	TaW1	0.841	0.804	0.944
	TaW2	0.862
	TaW3	0.784
	TaW4	0.741
	TaW5	0.739
	TaW6	0.810
	TaW7	0.780
	TaW8	0.841
	TaW9	0.788
	TaW10	0.853
Workaholism	Wo1	0.862	0.822	0.947
	Wo2	0.875
	Wo3	0.782
	Wo4	0.759
	Wo5	0.777
	Wo6	0.823
	Wo7	0.815
	Wo8	0.838
	Wo9	0.826
	Wo10	0.859
Happiness at work	HaW1	0.754	0.790	0.930
	HaW2	0.815
	HaW3	0.879
	HaW4	0.842
	HaW5	0.714
	HaW6	0.715
	HaW7	0.685
	HaW8	0.872
	HaW9	0.836

Source. Author’s own work.

Descriptive Statistics

Descriptive statistics, including means, standard deviations, and bivariate correlations among the main variables and controls, are presented in Table 3. The mean scores for inclusive leadership (IL), thriving at work (TaW), workaholism (Wo), and happiness at work (HaW) ranged between 3.77 and 3.78 on a five-point scale. The standard deviations were relatively low (ranging from 0.67 to 0.73), indicating that the respondents’ perceptions were clustered around the mean.

Table 3.

Descriptive Statistics.

Variables	Mean	SD	1	2	3	4	5	6	7	8
Age	-	-	1.000
Gender	-	-	−0.026	1.000
Marital status	-	-	0.303**	0.063	1.000
Wo.Meth	-	-	0.166**	−0.075	0.106*	1.000
IL	3.87	0.67	−0.078	0.004	0.012	0.027	1.000
TaW	3.77	0.70	−0.030	0.038	−0.010	−0.037	0.216**	1.000
Wo	3.81	0.69	0.051	0.034	0.100*	0.008	0.041	−0.069	1.000
HaW	3.79	0.73	−0.137**	0.098*	−0.143**	−0.080	0.151**	0.258**	−0.027	1.000

Source. Author’s own work.

Correlation is significant at the .01 level (two-tailed).

Correlation is significant at the .05 level (two -tailed).

Notable correlations were observed. Inclusive leadership was positively associated with thriving at work (r = .216, p < .01) and happiness at work (r = 1.51, p < .01). Thriving at work also demonstrated a positive correlation with happiness at work (r = .258, p < .01), suggesting that higher experiences of vitality and learning are associated with greater workplace happiness. Additionally, age was positively correlated with marital status (r = 0303, p < .01) and work methods (r = .166, p < .01).

Hypothesis Tests

Hypothesis testing was conducted using the PROCESS macro (Model 7) with 10,000 bootstrapped samples. Control variables (age, sex, marital status, and work method) were included in all analyses. Control variables: Among the controls, only marital status had a significant negative effect on happiness at work (β = −.178, p = .016), indicating that unmarried employees reported lower workplace happiness than their married counterparts did. Age, sex, and work methods were not significant predictors (p > .05). Direct effect (H1): Inclusive leadership has a significant positive effect on workplace happiness (β = .105, p = .043), supporting Hypothesis 1.

Mediating effect (H2): Thriving at work mediated the relationship between inclusive leadership and workplace happiness. The indirect effect was significant (β = .053), with the 95% bootstrap confidence interval excluding zero (LLCI = 0.023, ULCI = 0.093), thus supporting Hypothesis 2. Moderated mediation effect (H3): The interaction between workaholism and thriving at work was significant (β = .036, p < .05). The conditional indirect effect of inclusive leadership on workplace happiness via thriving at work was stronger at higher levels of workaholism (β = .082) than at lower levels (β = .033), supporting Hypothesis 3.

Control variables (age, sex, marital status, and work arrangement) were included in the models. Among them, only marital status showed a significant negative relationship with workplace happiness (β = −.178, p = .016), suggesting that unmarried employees reported slightly lower happiness levels. The other control variables (age, gender, and work arrangement) were not significantly related to workplace happiness. Table 4 summarizes all of the hypothesis testing results, including the path coefficients and confidence intervals.

Table 4.

Hypothesis Testing Results.

Variables	β	S.E.	t	p	LLCI	ULCI	Results
×age	.132	0.068	1.935	.054	−0.002	0.207	No
×gender	−.085	0.055	−1.542	.124	−0.194	0.023	No
×marital status	−.178	0.074	−2.421	.016	−0.323	−0.034	Yes (−)
×work method	−.045	0.051	−0.886	.376	−0.144	0.055	No
IL	.105	0.052	2.031	.043	0.003	0.207	Supported
Med_TaW	.053	0.018	-	-	0.023	0.093	Supported
Wo×TaW	.036	0.018	-	-	0.006	0.075	Supported

Source. Authors own work.

Note. Dependent variable: HaW. Predictors: age, gender, marital status, work method, IL, TaW, Wo. Yes (-): significant result. No: non-significant result. Supported: the hypothesis associated with that variable was statistically supported.

Discussion

This study provides strong empirical support for the critical role of inclusive leadership in fostering workplace happiness among employees in Indonesian SOEs, particularly in high-pressure, performance-driven environments. Consistent with Hypothesis 1, inclusive leadership was found to have a significantly positive effect on workplace happiness. This aligns with prior studies indicating that inclusive leadership fosters job satisfaction and well-being by promoting fairness, openness, and psychological safety (Alghofeli et al., 2024; Javed et al., 2019). Earlier work by Carmeli et al. (2010) also identified similar associations with affective commitment, while T. Liu et al. (2022) highlighted the role of inclusive leadership in buffering stress in demanding organizational contexts. The present findings, grounded in SCLT (Bandura, 1986) and LMX theory (Graen & Uhl-Bien, 1995), suggest that leaders who model inclusive behaviors cultivate high-quality relationships that foster psychological well-being through mutual respect and role modeling.

In support of Hypothesis 2, thriving at work mediated the relationship between inclusive leadership and workplace happiness. This finding is consistent with the existing literature that identifies thriving, a dynamic psychological state characterized by vitality and learning, as a key mechanism enhancing employee engagement and well-being (Porath et al., 2012; Spreitzer et al., 2020; Xu et al., 2023). Thriving has been shown to serve as a psychological buffer in high-demand settings, offering resilience against stress and burnout. Our results further reinforce the work of Srivastava and Singh (2022), who found that thriving under transformational leadership enhances psychological well-being in collectivist cultures, confirming the robustness of thriving as a mediating mechanism in a non-Western context.

Third, consistent with Hypothesis 3, the findings revealed that workaholism moderates the indirect relationship between inclusive leadership and workplace happiness through thriving. As depicted in Figure 2, employees with higher levels of workaholism experience stronger positive effects from thriving at work. This challenges dominant Western studies, which often highlight the detrimental effects of workaholism (Clark et al., 2016; Schaufeli et al., 2009). Instead, it supports Di Stefano and Gaudiino (2019), who found that in cultures that value performance and diligence, workaholism, when accompanied by psychological growth, can contribute to greater satisfaction. In the Indonesian context, where overwork is socially regarded as a sign of dedication, loyalty, and moral commitment (Hofstede, 2001; Tri Wulandari & Pratama Hafidz, 2023), workaholic tendencies may be socially reinforced and internalized as meaningful. Drawing on SDT (Deci & Ryan, 2000), these results suggest that when employees who are high in workaholism perceive themselves as thriving, their need for competence and meaning is fulfilled, resulting in an enhanced sense of workplace happiness. These findings underscore the importance of cultural context in interpreting the dual-edged nature of workaholism and support calls for culturally sensitive models of leadership and motivation.

Figure 2.

Indirect conditional effect of workaholism.

Theoretical Implications

The findings of this study are highly relevant to organizational leaders and human resource (HR) practitioners in designing leadership and employee management strategies. First, it advances LMX theory (Graen & Uhl-Bien, 1995) by demonstrating how inclusive leadership strengthens leader-member relationships that enhance affective well-being, especially when moderated by personal traits such as workaholism. Rather than treating LMX as a static dyadic construct, our findings suggest it can be dynamically influenced by cultural and psychological factors. Second, the results affirm SDT (Deci & Ryan, 2000), showing that inclusive leadership satisfies employees’ core needs for autonomy, competence, and relatedness, a mechanism that promotes thriving and well-being. Third, this study extends SCLT (Bandura, 1986) by illustrating how inclusive leaders act as role models that shape employee behavior through observation and psychological internalization, particularly in collectivist societies.

Finally, these findings contribute to the emerging literature on workaholism by challenging universalist assumptions. In contrast to individualistic settings where overwork is pathologized (Clark et al., 2016; Schaufeli et al., 2009), this study shows that in collectivist, high-performance cultures like Indonesia, workaholism carries socially rewarding attributes when accompanied by thriving. This requires culturally sensitive models of leadership and well-being.

Practical Implications

These findings offer actionable insights for leaders and HR practitioners. First, inclusive leadership should be promoted as a strategic priority, particularly in hierarchical and performance-oriented sectors. Leadership development programs should focus on fostering psychological safety, encouraging employee voice, and reinforcing relational fairness. Second, organizations should recognize the dual nature of workaholism. While excessive work commitment poses burnout risks, it can be harnessed positively when employees thrive. Therefore, organizations should provide individualized developmental support, including access to feedback, learning opportunities, and mental health resources, to transform workaholism into a motivational asset.

Third, promoting thriving at work through autonomy, skill development, and supportive feedback loops will increase both employee happiness and organizational performance. This is especially vital for younger employees who navigate hybrid work arrangements and value mentorship, inclusion, and psychological growth. Finally, work-life balance policies—flexible hours, family leave, and remote work options—must address both married and unmarried workers, recognizing the diverse life stages and social expectations in Indonesia. Tailoring HR strategies to the cultural logic of collectivism allows firms to optimize the potential of work-oriented employees while preserving their well-being.

Limitations and Future Research

Although this study offers valuable contributions to the understanding of inclusive leadership and workplace happiness, several limitations must be acknowledged. First, the cross-sectional design restricts the ability to draw causal inferences regarding the relationships between inclusive leadership, thriving at work, workaholism, and workplace happiness. Future research should adopt a longitudinal or experimental design to examine how these relationships evolve over time and establish a temporal precedence. Second, this study relied exclusively on self-reported data, which may introduce common method and social desirability biases. To enhance validity, future studies should utilize multi-source data, such as supervisor ratings or peer evaluations, and incorporate feasible objective measures.

Third, the research was conducted within the specific cultural context of Indonesia—a collectivist, high-power distance society—limiting the generalizability of the findings. Inclusive leadership may be particularly impactful in such contexts because of the high value placed on relational harmony, loyalty, and group cohesion. Future studies should explore these dynamics in more individualistic and egalitarian societies to determine whether the effects observed here are culturally contingent or universal. Additionally, while thriving at work was found to be a significant moderator, other psychological and contextual factors such as organizational climate, psychological empowerment, and coworker support may also play mediating or moderating roles. Further research should explore these variables to gain a more comprehensive understanding of how inclusive leadership fosters well-being in different environments and employee profiles.

Conclusions

This study provides compelling empirical evidence that inclusive leadership enhances workplace happiness, particularly in high-pressure collectivist environments such as Indonesian SOEs. Thriving at work was identified as a crucial psychological mechanism that mediates the relationship between inclusive leadership and happiness, whereas workaholism was found to moderate this pathway, enhancing the benefits of thriving under specific cultural conditions. These findings contribute to theoretical development by integrating concepts from the SDT, LMX theory, and SCLT within a culturally embedded framework.

Practically, this study underscores the importance of cultivating inclusive leadership styles that promote autonomy, competence, and relatedness, particularly for younger and early career employees navigating hybrid and hierarchical work settings. Moreover, it challenges the dominant narrative that workaholism is inherently detrimental, showing that in cultures where overwork is socially valorized, it may amplify the benefits of thriving when supported by inclusive leadership. Despite these limitations, this study provides a foundation for future research to build culturally sensitive models of leadership and well-being. By promoting inclusive leadership and creating environments that allow employees to thrive, organizations can transform even strong work orientations into a sustainable source of engagement and happiness.

Footnotes

Acknowledgements

The authors would like to thank Universitas Gadjah Mada for supporting this research.

ORCID iDs

Reni Rosari

Amin Wibowo

Claudius Budi Santoso

Tur Nastiti

Heni Ardianto

Vania Olivine Danarilia

Ethical Considerations

This study adhered to ethical standards for social science research. Ethical approval was not required as no sensitive or identifiable personal data were collected, and participants were exposed to minimal risk.

Consent to Participate

Participants were fully informed about the study’s purpose and provided informed consent prior to participation.

Funding

The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: The authors disclose receipt of the following financial support for the research, authorship, and/or publication of this article: This work was supported by Universitas Gadjah Mada [6526/UN1.P1/PT.0103/2024].

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Data Availability Statement

The datasets generated and/or analyzed during the current study are available from the corresponding author on reasonable request.

Disclaimer

The perspectives and opinions conveyed in this article represent the authors’ viewpoints and stem from rigorous professional research. They do not inherently mirror the official policy or stance of any associated institution, funding body, agency, or publisher. The authors bear responsibility for this article’s results, findings, and content.

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Inclusive Leadership and Workplace Happiness: Thriving as Mediator and Workaholism as Moderator in Indonesia

Abstract

Plain Language Summary

Keywords

Introduction

Literature Review and Hypotheses Development

Inclusive Leadership and Leader Member Exchange Theory (LMX)

Inclusive Leadership and Self Determination Theory (SDT)

Inclusive Leadership and Social Cognitive Learning Theory (SCLT)

Inclusive Leadership and Happiness at Work

Thriving at Work as a Mediator

Workaholism as a Moderator

Methods

Research Design and Sample

Ethical Considerations

Measurement

Analysis Approach

Results

Confirmatory Factor Analysis and Reliability

Descriptive Statistics

Hypothesis Tests

Discussion

Theoretical Implications

Practical Implications

Limitations and Future Research

Conclusions

Footnotes

Acknowledgements

ORCID iDs

Ethical Considerations

Consent to Participate

Funding

Declaration of Conflicting Interests

Data Availability Statement

Disclaimer

References