How inclusive leadership improves employee service behavior: does inclusive climate matter? Open Access

Employee service behavior (ESB) is imperative for the successful operations of service organizations because of its incessant attention to service improvement (Imran and Ambreen, 2022). Several studies have focused on ESB as an indicator of individual-level performance in the organization (Hussein et al., 2023; Imran and Ambreen, 2022; Karim et al., 2024; Rubel et al., 2018). The ability to perform formal service roles and rapidly meet customer expectations is precarious for effective service delivery (Karim et al., 2024; Raub and Liao, 2012). This implies that effective service behavior indicates working on prescribed roles and going beyond the described job; therefore, employees need a supportive service climate to do so (Javed et al., 2017; Sok et al., 2023). Moreover, when employees find the supportive attitude of leaders, they become enthusiastic about displaying better service behavior (Zhang et al., 2019).

Apprehending the prominence of leadership as a trigger to ESB, studies analyzed the impact of leadership approaches (e.g., servant leadership, transformational leadership, ethical leadership, transactional leadership, charismatic leadership, shared leadership and authentic leadership) on ESB (Fan et al., 2023; Jauhari et al., 2017; Özsungur, 2019; Yamak and Eyupoglu, 2021; Zhang et al., 2019, 2024). However, these studies highlighted the leader-centric approach, which focuses on the prominence of leaders’ characteristics in improving ESB. Therefore, this view disregards the importance of the leader–subordinate relationship in enhancing ESB (Javed et al., 2017). The paper addresses this limitation in previous works and assesses the linkage between inclusive leadership (IL) and ESB. Nembhard and Edmondson (2006) defined IL as “words and deeds by a leader or leaders that indicate an invitation and appreciation for others’ contributions” (p. 947). IL can also be explained as the approach where leaders demonstrate availability, accessibility and openness while interacting with subordinates (Naseer et al., 2024).

It is crucial to go beyond the leader-centric approach since changes are happening and attracting organizations to think outside of the conventional structure connected with the leader-centric approach (Javed et al., 2017; Naseer et al., 2024). Believing in connected leadership, the study assumes that IL is a leadership strategy that offers an opportunity to expedite the connection and inclusion of employees in organizations. IL creates an environment of mature interactions between leaders and subordinates and fosters the inclusion of diversified members in the organization. The need for inclusion has gained tremendous attention as inclusive climate (IC) is assumed to be a precondition for inclusion and allows ideas and views that facilitate participative decision-making and foster service performance (Ashikali et al., 2021; Meng et al., 2023). However, inclusiveness largely relies on the extent of interaction between leaders and followers as well as among the members of the organization. To accomplish service organizations’ goals, realizing and assessing how leadership facilitates a climate of inclusiveness in service organizations is needed. Therefore, the present study examines the role of IL in supporting an IC to improve ESB (Figure 1) in the context of banking organizations.

Existing studies investigated the employee service attitude and behavior-related problems of banks (Akhter, 2012; Andaleeb et al., 2016; Park et al., 2023) but it remains an important area to explore more in the developing nation’s service context like banking industry in Bangladesh. Customer complaint issues are remarkable in Bangladeshi banks. Financial Integrity & Customer Services Department (FICSD) annual report (2016–17) showed that FICSD received 3,521 complaints during the period, 1,362 complaints over the phone and 2,164 complaints in writing from Bangladeshi bank customers. This report also claimed that 40.53% of the grievances were connected to general banking. Akhter (2012) illustrated that poor communication, unclear roles, an improper fit of employee-job-technology, unsuitable controlling systems, gaps in perceived control and absence of teamwork are the reasons for poor employee service in banks in Bangladesh. Poor service quality can be a significant threat to the banking industry of Bangladesh (Andaleeb et al., 2016). Andaleeb et al. (2016) reported that deterioration of service quality might reduce customer trust and increase customers’ negative perception of service quality, ultimately decreasing the bank’s reputation. Therefore, to respond to the urgency, the present study highlights how to improve ESB by practicing IL and ensuring IC.

The study contributes to the literature in three ways. First, although the existing studies revealed that IL practice leads to positive employee outcomes such as employee performance (Umrani et al., 2024), engagement (Atiku et al., 2024), knowledge sharing (Islam et al., 2024), innovative behavior (Zhang and Zhao, 2024) and CSR performance (Boutmaghzoute et al., 2025), there is scarcity of evidence about the influence of IL on ESB and IC in the leadership literature. Hence, the present study contributes by recognizing and comprehending the importance of IL in boosting IC and ESB. Second, the study contributes to the inclusion literature as inclusion highlighting in leadership and work environment is still in the infancy stage (Aboramadan et al., 2021). Specifically, none of the previous research has highlighted the inclusiveness in the work environment as the consequence of IL. Thus, the study enhances knowledge of how IL affects employees’ perceived inclusiveness in the workplace contributing to service-related individual outcomes. Third, the study contributes to the existing literature on service behavior in service organizations in general and the banking industry in specific. The study sheds light on the significance of IL for in-role and extra-role behavior in service settings, especially banking organizations, in an emerging economy context.

Social exchange theory (SET) is logically relevant to the present study framework. In the context of IL, the study argues that IL prioritizes belongingness and uniqueness, which employees perceive as a favor; in turn, the strength of the bonding between leaders and followers is promoted. IL creates a climate that followers are nearly treated equally with equity and not distinguished between out-group members and in-group members (Xiaotao et al., 2018; Duc and Tho, 2025). An inclusive environment in the team will reduce the subordinates’ perception of being degraded and ignored in the workplace. A person’s need to belong has evolutionary roots, and wanting to be accepted would be advantageous for both survival and reproductive benefits (Baumeister and Leary, 2017). Since belongingness is an individual’s fundamental need, the fear of exclusion or not belongingness can lead to depression, anxiety and emotional distress (Kaur and Jaiswal, 2024). Therefore, when an inclusive leader begins social exchange through inclusion and removing the fear of exclusion, subordinates would reciprocate through favorable outcomes and behaviors. In addition, subordinates not only respond to inclusive leaders’ favor by making an effort to perform prescribed roles but also become proactive in offering the best service and performance (Xiaotao et al., 2018; Duc and Tho, 2025). Supporting the assumptions of SET (Blau, 1964), the study proposes that subordinates improve their service behavior because they are treated fairly, and their opinions are considered in decision-making. SET proposes continuing a bilateral behavioral reinforcing relationship (Ali and Ullah, 2023; Ali et al., 2024). Moreover, it is supported that an IC generates a supporting culture, and opportunities for sharing ideas and feelings of being valued and belongingness (Mor Barak et al., 2016) which might influence positive service behavior and decrease aberrant behavior to support the assumption of the reciprocal association between leaders and employees. Employees who perceive an IC are expected to make more efforts to improve their service behaviors in the workplace. Therefore, using SET as a theoretical lens, the study argues that employees perceive IL and IC as favors that instigate their IRSB and ERSB in the organization.

ESB is an important determinant of service organization performance (Rabiul et al., 2022a). Raub and Liao (2012) conceptualized that “Service behaviors include formalized job descriptions and service scripts, and also consist of completing core service tasks using standard service procedures”. Service conduct refers to an employee’s attempts to make clients feel comfortable while providing services (Raub and Liao, 2012; Singh and Banerji, 2021). ESB is also conceptualized as interactive dealings between employees and customers (Rubel et al., 2018; Hussein et al., 2023). The way employees serve the customers with attitude, gesture, posture and voice is identified as service behavior (Tsaur et al., 2004). Tsaur and Lin (2004) claimed that employee contact with customers is critical as it has a major impact on the perceived service quality the organization provides. Following Tsaur and Lin (2004) and Tsaur et al. (2004), we consider both IRSB and ERSB. IRSB is identified as formal core tasks and responsibilities prescribed in job descriptions and service scripts (Raub and Liao, 2012). It is also known as “role-prescribed” behavior derived from organizations’ obligations and regulations mentioned in job responsibilities and performance assessment statements (Singh and Banerji, 2021). On the other hand, Tsaur et al. (2004) defined extra-role behavior as behaviors not limited to the formal prescribed role requirements. It can be featured as a thinking forward, long-term, and self-motivated approach to customer service (Karim et al., 2024; Rubel et al., 2018). Holistically, both IRSB and ERSB can enhance employee performance (Jin et al., 2025). Hence, the current study emphasizes front-line bank employees' overall service performance, considering both IRSB and ERSB.

In service organizations, ESB is crucial for service excellence and customer satisfaction (Raub and Liao, 2012; Singh and Banerji, 2021; Jin et al., 2025). Leadership plays a prominent role in improving service quality and employees’ behavior (Duc and Tho, 2025). Earlier studies deliver evidence of the association between leadership and service quality (Ande et al., 2024; Rabiul et al., 2022a, b), leadership and ESB (Su et al., 2020; Zhang et al., 2024). ESB can be improved by the leadership strategy that inspires employees to be the better version of themselves while interacting with bank customers (Qamar and Soomro, 2025). Therefore, leaders of banking organizations need to be very careful about the practice of leadership approaches that can foster the inclusion of employees and better service behavior, contributing to bank competitiveness. Hence, the study focuses on IL’s role in improving bank employees' IRSB and ERSB.

The idea of IL has emerged as a potential strategy for maximizing the advantages of managing diverse employees and influencing the practices of inclusion in the workforce (Naseer et al., 2024). For instance, IL facilitates inclusion in teamwork and prevents social exclusion (Shore and Chung, 2023). Nembhard and Edmondson (2006) first conceptualized IL and illustrated that inclusive leaders articulate a situation where people tend to give priority to others' points of view, for example, “voices are genuinely valued” (p. 948). Leaders showing participative attitudes create an environment where followers are encouraged to express their views as opposed to when they feel enforced or controlled by leaders (Javed et al., 2017). Integrating the functional and psychological aspects of inclusion, Mor Barak (2005) defined IL as “the ability to recognize and celebrate the uniqueness of the group or organizational members and, at the same time, promote their sense of belonging, along the three inclusion dimensions of decision-making, information networks and participation in informal groups” (p. 258).

Applying the concept of inclusion (Shore et al., 2011; Randel et al., 2018, p. 191) illustrated the fact that “IL facilitates group members’ feeling part of the group (belongingness) and retaining their sense of individuality (uniqueness) while contributing to group processes and outcomes.” Inclusive leaders assist employees in revealing their innovative ideas and communicating value for the diversity among the subordinates that facilitates inclusion (Zhang and Zhao, 2024). Moreover, they enhance shared enthusiasm, norms, and accountability structures that convey to team associates what inclusion is, how it can help them, and how it can affect both their own and others' experiences of inclusion (Nishii and Leroy, 2020; Orekoya, 2024). This explanation emphasizes how leaders can clarify the everyday inclusive behaviors expected of team members and set standards for members to align their behaviors with those that encourage inclusion by using their words and actions (Nishii and Leroy, 2020; Orekoya, 2024). In the present context, we conceptualize IL as the leadership approach focusing on inclusion to promote an inclusive work setting enhancing employee performance.

Specifically, inclusive leaders prioritize acknowledgment, admiration, responsiveness and accountability, which legitimize and support the subordinates’ actions with leadership (Roberson and Perry, 2021; Duc and Tho, 2025). IL emphasizes shared authority that facilitates followers to decide their actions (Kaur and Jaiswal, 2024). Additionally, IL deals with a working climate where leaders directly work with subordinates and recognize and respect subordinates’ ideas and opinions (Orekoya, 2024). Scholars argued that employees favor various leadership approaches (Choi et al., 2015) and IL is one of the preferred approaches to managing diversity, allowing decision-making to improve service quality (Naseer et al., 2024; Younas et al., 2022). Employees who get involved in decision-making tend to serve innovatively beyond the conventional mechanism. Moreover, when leaders accept employees of different backgrounds with due importance, value them and instigate them to accept each other, they foster an IC (Meng et al., 2023; Mor Barak et al., 2022).

IC has gained massive attention among research scholars (Fu et al., 2025; Meng et al., 2023), although exploring this area is relatively new. IC can be conceptualized as the “shared view of employees who identify the extent of organizational involvement in making employees feel valued, creating a sense of belongingness by appreciating their presence in the organizations” (Mor Barak et al., 2016). Distinctive theory illustrates inclusion as two important needs people seek to satisfy: belongingness and uniqueness (Ashikali et al., 2021). Belongingness encompasses individuals pursuing similarities with and endorsement by others. Uniqueness is the pursuit of individuality in contrast to others. Optimal distinctiveness balances these two needs. Individuals experience inclusion when they feel belonging to the team, which denotes that each person in the team is considered an insider while having the chance to express uniqueness (Ashikali et al., 2021; Nishii, 2013; Orekoya, 2024). To stimulate the spirit of inclusion, a climate must be designed in such a way that includes diverse employees should have the opportunity to be treated as insiders, and there should be scope for proper utilization of diversity among team members (Fu et al., 2025; Nishii, 2013; Shore et al., 2018).

IC indicates a work environment where team members can share and accept diversified views and support each other within the work setting (van Luttervelt, 2024). Climate for inclusion is an important determinant of managing diversity in the organization properly, and it also contributes to solving workplace problems related to high absenteeism, turnover and dysfunctional conflict (Alghofeli et al., 2024; Rashid et al., 2021). Hence, when there is an IC in the organization, there will be shared perceptions and vision among the organizational members, influencing positive workplace behavior (Fu et al., 2025; Nelissen et al., 2017), such as service behavior. IC significantly affects employees’ prosocial motivation; in turn, employees are likely to adhere to organizational norms and values and exhibit better service behavior (Nelissen et al., 2017). Thus, IC might create or shape a positive environment to enhance service quality in the service organization.

Bodla et al. (2018) highlighted that an IC facilitates the practice of impartial treatment, integration of variances and inclusion of employees in the decision-making of teamwork. People of different backgrounds work in an organization, and the service of employees is boosted when they feel fair treatment, are valued and have opportunities in decision-making (Jin et al., 2025; Mor Barak et al., 2022). Moreover, a climate of inclusion reduces workplace diversity problems, for example, interpersonal conflict (Nishii, 2013). Employees working in an IC can concentrate more on the work; as a result, the extent of service quality improves, which increases the competitiveness of service organizations (Wolfgruber and Einwiller, 2023). The perception of an IC encourages a friendly working environment and promotes healthy communication, open discussion and frequent information sharing (Kuknor et al., 2025). Organizational leaders provide more attention to generate a climate of inclusion (Ashikali et al., 2021) for service organizations to improve service behavior and service quality.

IL allows employees more accessibility, openness and interactive communications with the leaders (Aboramadan et al., 2021; Kuknor et al., 2025). Inclusive leaders prioritize subordinates’ needs and are available for the employees, thereby providing the feeling of leaders’ availability (Umrani et al., 2024; Younas et al., 2022). Scholars stated that inclusive leaders are supportive, open toward subordinates, helpful and aware of employees’ interests (Alghofeli et al., 2024; AlMunthiri et al., 2024; Aboramadan et al., 2021; Duc and Tho, 2025; Kuknor et al., 2025; Umrani et al., 2024; Younas et al., 2022). IL enables followers to identify and utilize their talents empowering them to participate in service activities. It is an important antecedent of improving the service behavior of the followers (Duc and Tho, 2025). Based on the assumptions of SET (Blau, 1964), it is assumed that when subordinates observe the supportive attitude of their inclusive leader, they become stimulated to return by demonstrating positive behavior while serving in the workplace. Employees may reciprocate by showing in-role behaviors and extra-role behaviors, such as innovative work behavior and organizational citizenship behavior (Aboramadan et al., 2021). Liu (2009) also supported that a supportive leader and his attitude are vital to exposing extra-role behaviors. Behaviors of assisting and being available of inclusive leaders become model behaviors for employees, motivating followers to be cordial to clients and support peers (Aboramadan et al., 2021). Moreover, inclusive leaders prioritize the emotions and interests of their followers (Çelik et al., 2024); as a result, the followers tend to display high commitment, and engagement with energy (Ali et al., 2024; Cenkci et al., 2021), thus, payback through exhibiting quality service behavior. Specifically, Duc and Tho (2025) revealed that IL improves employee innovative service performance in retail service. Therefore, we predict the positive impact of IL on employees' in-role and extra-role service behavior. Hence, it is hypothesized that:

Researchers endorsed the fact that leaders play a significant role in shaping employees’ psychological climate and organizational climate at diverse levels and units (Sok et al., 2023; Xintian and Peng, 2023). Leaders create the climate directly through their attitude and behavior toward the subordinates, implementation of rules and policies and indirectly by emerging as role modeling behavior; setting norms for the followers (Naseer et al., 2024; Randel et al., 2018). Leaders’ role is vital in shaping the dynamics of an organization where inclusion and exclusion matter to manage diversity among the members (Naseer et al., 2024; Perry et al., 2021). A leader’s attitude is crucial to creating IC since followers develop their perceptions based on how they are treated and how other members of the same group are treated in the workplace. Thus, leaders act as a determinant of employees' inclusive and exclusive behavior (Kuknor and Bhattacharya, 2022). For instance, Prime et al. (2014) advocated that IL is important for minimizing gender bias and ensuring equal opportunities for men and women in the organization.

To specify the behaviors leaders want from employees, leaders should focus on creating a climate of inclusiveness. In this regard, Randel et al. (2018) explained a conceptual model in which IL was operationalized as the behaviors that lead to the uniqueness and belongingness of the members working in a team. In their model, uniqueness covers assisting team members and urging diversity in contribution, while belongingness includes decision-making opportunities, the culture of equity and integrity and sharing capacity of team members. Although this model showed employee outcomes, it did not focus on a climate of inclusion between the association of IL and employee performance. However, IL behaviors are highly required to promote a climate of inclusion (Çelik et al., 2024; Kuknor et al., 2025; Shore et al., 2018). Scholars stated that organizations’ rules, policies, practices and actions lead to an inclusive culture (Shore et al., 2018). Similarly, promoting inclusiveness relies on leadership behavior (Fu et al., 2025). Shore et al. (2018) suggested that leaders should simultaneously prioritize the enrichment of inclusion and prevention of exclusion for organizational inclusion. An inclusive leader is different from others because of his focus on belongingness and uniqueness, which facilitates empowerment and openness among the team members (Islam et al., 2024; Perry et al., 2021) who are diversified in status and background. Thus, inclusive leaders create an environment of comprehensive power and authority in the teams to manage and intervene in situations. Inclusive leaders act in ways that generate a sense of belonging among the team members, a feeling that followers are assessed for their unique contributions and who they are. Inclusive leaders are aware of the inclusion of diversity and address discrimination in the workplace. In sum, IL is an important approach to developing IC; thereby, we hypothesize that:

The working environment of an organization is important in motivating employees to improve their service behavior. The workplace climate plays a crucial role and greatly supports employees displaying better work behavior (Hassi et al., 2022). Similarly, an organizational climate acts as a significant determinant of nurturing innovative service behavior in the workplace (Xu et al., 2022; Çelik et al., 2024). Previous studies found that IC is positively related to service performance (Ali et al., 2022), voice behaviors (Paolillo et al., 2021), environmental behaviors (Thabet et al., 2023), innovative behavior (Zhong et al., 2022; Çelik et al., 2024), inclusive behavior (Nelissen et al., 2017), helping behaviors (Randel et al., 2016) and organizational citizenship behavior (Panicker et al., 2018). An IC fosters a climate of shared ideas, values and team bonding among the team members, even though they are in different ranks and positions (Meng et al., 2023). Thus, an IC generates a culture of innovative performance and fosters employees to serve clients and the organization in the best possible ways (Ali et al., 2022; Fu et al., 2025). Feeling valued and belongingness influences employees to manifest innovative service behavior in the organization (Çelik et al., 2024; Zhong et al., 2022). An IC enhances trust among team members (Meng et al., 2023; Rashid et al., 2021); consequently, employees are motivated to share innovative ideas to improve the quality of service and service behavior. Supporting the assumptions of SET, the study argues that an IC inspires employees to reciprocate better service behavior because employees perceive trustworthiness, value, belongingness and support in the team. Accordingly, this study proposes:

The current study is extended by examining IC as a mediator in the association between IL and ESB. Earlier studies emphasized the importance of openness and supportive attitude of leaders toward their followers and the favorable relationship between leaders and employees, which initiates an IC (Shore et al., 2018). Scholarly findings recommend that the higher the extent of inclusiveness in the climate, the better the performance is in an efficient manner (Ali et al., 2022; Fu et al., 2025; Meng et al., 2023; Xu et al., 2022). Similarly, in leadership publications, researchers have found that inclusive leaders play a vital role in building a climate of inclusion in the organization (Alghofeli et al., 2024; Ashikali et al., 2021; Çelik et al., 2024; Kuknor et al., 2025; Mor Barak et al., 2022; Perry et al., 2021; van Luttervelt, 2024). Ashikali et al. (2021) explained how IL practices contribute to supporting an IC in the diversified members of teams to provide value to each member’s contribution to the work practices. However, researchers are still investigating how IL affects IC (Kuknor et al., 2025; van Luttervelt, 2024). It can be argued that the inclusive attitudes of leaders lead to an IC in the organization.

Accordingly, researchers have examined the mediating impact of IC in leadership literature. Perry et al. (2021) identified that an inclusive work climate influenced by inclusive leader behavior is a potential mediator in the association between IL and employee work outcomes. Furthermore, Thabet et al. (2023) found the climate for green initiatives mediates the relationship between green IL and employees’ pro-environmental behaviors. Other studies have also revealed that IC mediates the relationship between IL and organization-based self-esteem (Kuknor et al., 2025), IL and innovative work behavior (Çelik et al., 2024), humble leadership and organizational ambidexterity (Zhang et al., 2020), benevolent leadership and employee well-being (Luu, 2019), paradoxical leadership, team adaptation and team performance (Meng et al., 2023) and paradoxical leadership and employees’ unethical pro-organizational behavior (Tan et al., 2021). Therefore, the current study argues that IC may mediate the connection between IL and ESB. According to the assumptions of SET, employees tend to reciprocate IL behaviors (because of accessibility and supportive attitude) and IC (because of feeling valued and belongingness) through expressing IRSB and ERSB in the workplace. Hence, the study posits the following hypotheses:

The sample for the study comprised the front-line employees (FLEs) working in PCBs in Bangladesh. PCBs are in a superior position in terms of providing customer service using automation with higher reliability (Kamarudin et al., 2016) and the market share of the banking industry is dominated by PCBs (Tanchi, 2021). Therefore, local researchers become more interested in PCBs and focus on employee behaviors and performance to provide efficient customer service and to operate banking activities successfully (Rubel et al., 2021a, b). To assess the hypotheses, the study surveyed FLEs of 31 private commercial scheduled banks in Dhaka, Bangladesh. This sample frame was chosen for two reasons: first, banks provide customized services to sustain rigorous competition (Rubel et al., 2021a, b); therefore, bankers’ service behavior could be a crucial determinant for accomplishing competitive advantage. Second, since FLEs directly interact with customers, their service behaviors can influence customers' attraction, retention and satisfaction. Hence, selecting FLEs of the banking industry is justified for the present study.

For multivariate analysis, there are different opinions regarding the appropriate size of the sample. Most of the scholars argued that 200 can be considered as the rule of thumb for deciding on the sample size (Hoe, 2008). The sample should be ten times the number of items used in research, for instance, 27 items have been used in this study, hence, the sample size should be 270 (Sekaran and Bougie, 2010). If the sample size is too large or small, the study can be ineffective (Hair et al., 2013). The sample size of the present study is 565 which is endorsed by the scholarly arguments (Hair et al., 2013; Hoe, 2008; Sekaran and Bougie, 2010). The study used the judgmental sampling technique, which is a non-probability sampling method. The judgmental sampling technique was used because the study chose a specific group of participants (FLEs of banks) based on pre-defined criteria (Etikan and Bala, 2017). FLEs were intentionally chosen considering their professional roles and involvement in banking service. Specifically, judgmental sampling was used to select a sample based on the following criteria: (1) FLEs having at least one year of serving experience in the current bank and (2) FLEs having full-time employment in the present organization. Full-time position holders are considered since they are more engaged with the organization, and working duration is also essential for a justified and fair assessment of a leader’s behavior.

A formal request letter was sent to all 43 PCBs through the HR department. The letter covers a brief of the research objectives, the criteria of participants and the questionnaire with cover letter. Only 31 banks provided their consent to support the data collection procedure. The study used the drop-off/pick-up (DOPU) method which allows participants to provide feedback on their own time and reduce the possibility of the interviewer’s influence (Rubel et al., 2021a, b). We sent 35 sets of questionnaires to each bank and a total of 1,085 sets of questionnaires were dispersed to the 31 PCBs. The data collection procedure required around two months (May to June 2022). We received 597 questionnaires out of 1,085, and 565 were found complete and suitable. Therefore, the response rate was 52.1%, a bit lower than response rates from previous studies, such as Ali et al. (2023) (66%).

A total of 27 items were adapted from earlier established scales to measure IL, IC and service behavior. To examine IL, nine items were taken from Javed et al. (2018), and the sample item is “The manager is open to hearing new ideas”. IC is the mediating variable of the study, and the variable was assessed by eight items adapted from Ashikali et al. (2021). A sample item of IC is “My team has a safe work environment in which team members can be their true selves”. Last, IRSB (five items) and ERSB (five items) were used to measure ESB (two dimensions). Sample items of the ESB are “I perform all those tasks for clients that are required of him/her” (IRSB) and “I voluntarily assist clients even if it means going beyond job requirements” (ERSB). The study followed Rubel et al. (2018) in adapting the scale of ESB. All exogenous, endogenous and mediating variables items were measured using a five-point Likert scale (1 = “strongly disagree”; 5 = “strongly agree”). Demographic information was analyzed using four variables, including gender, age, education and experience.

SPSS (version 23) and SEM with AMOS (version 23) were used to analyze data and test the hypotheses. Data were analyzed following three stages: (1) confirmatory factor analysis (CFA) of dependent, independent and mediating variables (2) testing the measurement model validity (3) developing and measuring the structural model covering direct, indirect and mediation models. According to Hair et al. (2010), SEM is a family of statistical models that aims to explain the connections between various variables. It is also regarded as a crucial tool in applied multivariate analysis for hypothesis testing and causal modeling (Magno et al., 2024).

SEM is a multivariate data analysis technique to illustrate both factor and path analysis (Hair et al., 2010). SEM is a powerful technique as it combines CFA, multiple linear regression and path analysis. SEM displays the relation of latent and manifest variables along with the measurement errors. The core advantage of SEM is to assess multiple dependent relationships simultaneously and incorporate all the variables in a single model instead of multiple separate analyses. SEM also enables testing the mediating variables, and IC was tested as the mediator in the current model. The measurement model and structural model are two parts of SEM. The measurement model is responsible for assessing the reliability and validity of the constructs. It demonstrates the association between latent variables and the indicators. On the other hand, the structural model illustrates the causal relationship between predictor and predicted variables based on prior literature and theoretical judgment. Based on the theory itself, the linkages of the entire model, including endogenous, exogenous and mediating variables, were constructed.

The study collected data from 565 frontline bankers working in PCBs in Bangladesh. Four demographic variables were analyzed, and the summary was presented in Table 1. Most of the respondents were male (75.8%), and the result showed consistency with industry experts’ opinion that male employees are greater than female employees working in the banking industry. The most common age group was 21–30 (59.6%); more than half of the respondents fall into this age range (21–30). The age group 31–40 (33.5%) was in the second position, while only 6.9% of respondents' age range was 41 and above. Around 30.8% of the employees of this survey have a Bachelor’s degree, and 69.2% have acquired a Master’s degree, indicating that most of the bankers working in private banks are Master’s degree holders. A similar result was supported by Tanchi (2021), that a significant number of employees working in the banking industry have a Master’s degree. The highest percentage of the length of service went for 1–5 years (69.6%), and the remaining experience range was between 6 and 10 years (17.5%), 11 and 15 years (9.4%) and 16 and above (3.5%).

Examining the possibility of common method variance (CMV) is very important since the study applied a cross-sectional survey design (Podsakoff et al., 2003). The issue of CMV arises when the exogenous and endogenous variable data are collected from the same respondents (Tehseen et al., 2017). To assess CMV, first, we analyzed Harman’s single-factor score. The single factor explained 36.57% variance in all measures; the score is less than 50%. Second, the study tested the one-factor CFA measurement model, and the result demonstrated poor fitness of the model (χ²/df) = 9.954, GFI = 0.882, AGFI = 0.803, CFI = 0.906, IFI = 0.906, NFI = 0.897, TLI = 0.874, RMSEA = 0.126 and RMR = 0.051. Therefore, CMV was not a problem in the present study.

IRSB had the highest mean value (4.20), while the lowest mean value (3.56) was for ERSB, and the mean value of all the constructs was as follows: IL = 4.01, and IC = 3.92 (Table 2). On the other hand, ERSB and IRSB were found with the highest and lowest standard deviations with a score of 0.84 and 0.63, respectively. The standard deviation scores of IL and IC were 0.73 and 0.72. The present study found a positive correlation between the constructs used in the research framework. IL demonstrated significant positive correlations with IC (0.650^**, p < 0.01), IRSB (0.476^**, p < 0.01) and ERSB (0.388^**, p < 0.01). Similarly, IC showed positive correlations with IRSB (0.446^**, p < 0.01) and ERSB (0.374^**, p < 0.01). Lastly, IRSB revealed a significant positive correlation with ERSB (0.461^**, p < 0.01).

Confirmatory factor analysis (CFA) is used to present the measurement model, which demonstrates the associations of the observed items of the underlying constructs. In the current study, CFA was employed to test the goodness of fit of the measurement model and assess the reliability and validity of the data. First, the measurement model demonstrates the extent of the goodness of association of the observed and latent variables. Second, it assesses the convergent validity and construct reliability of the constructs. The measurement model’s goodness-of-fit determines how well the items examine the intended constructs (Ooi, 2013). The study used Chi-square Statistics, GFI, AGFI, CFI, NFI, RMSEA and RMR to assess the goodness of fit of the measurement model.

CFA was performed to test the constructs' measurement scale, whereas each dimension’s variance was fixed at 1.0. The standardized factor loading of all the items was more than 0.50, and the highest and lowest loaded values were 0.770 (ESB2) and 0.604 (IC2) (Table 3). Therefore, the study found a good range of factor loading of the items, and no item was required to be deleted due to low loading. Hair et al. (2013) recommended that the study should delete those items if factor loading is less than 0.50. This measurement model’s goodness-of-fit indices are as follows: normed chi-square value (χ²/df) = 2.022, GFI = 0.923, AGFI = 0.907, CFI = 0.958, IFI = 0.959, NFI = 0.921, TLI = 0.953, RMSEA = 0.043 and RMR = 0.037. Model fit indices show that the current CFA model is well-fit and is statistically significant. This model satisfies the criteria of all fit indices since normed chi-square values are 2.022 and GFI, AGFI, CFI, IFI, NFI and TLI are greater than 0.90 (Ooi, 2013) as well as RMSEA and RMR are less than 0.08. Therefore, the CFA findings showed that the data was successfully verified to fit the model.

The study examined content validity, construct validity, convergent validity and discriminant validity. Content validity is violated if the factor loading is greater than 0.90 and the inner-item correlation is more than 0.80 (Almanasreh et al., 2019). It is recommended that the inner-item correlation should be moderate (Almanasreh et al., 2019). The study found that the highest factor loading is 0.770 (ESB2), which is not greater than 0.90, and the highest inner-item correlation value is 0.709, which is also less than 0.80. Construct validity confirms when the factor loading of the measurement item is more than 0.50, and the factor loading of all the items of this study is greater than 0.50. Composite reliability (CR) should also be at least 0.70 (Raykov, 1997), and the range of CR value is 0.836–0.897, which indicates none of the values of the construct is less than 0.70. Hair et al. (2010) propose several methods, including factor loadings, average variance extracted (AVE) and CR, to estimate the convergent validity among item measures. The minimum value of AVE should be 0.50 (Kline, 2010), and CR should be more than 0.60 (Ooi, 2013). The AVE of each construct is as follows IL = 0.512, IC = 0.501, IRSB = 0.520 and ERSB = 0.506; therefore, the AVE of all constructs is above 0.50 as recommended. CR of each construct is as follows: IL = 0.897, IC = 0.875, IRSB = 0.844 and ERSB = 0.836. As Ooi (2013) recommended, the four constructs' CR values are above 7.0. All the factors are loaded more than the recommended value of 0.50. The results confirm the reliability and convergent validity criteria.

In the case of discriminant validity, the estimated correlations of the construct, which emphasize sets of indicators anticipated to evaluate various constructs, should not be too high (>0.90) or too low (<0.10) (Hair et al., 1998). The result demonstrates that the correlation coefficient range is 0.650 (IL and IC) to 0.374 (IC and ERSB). Moreover, comparing the square root of the AVE with the correlation coefficients between the constructs allows for the examination of discriminant validity. Discriminant validity is revealed if the AVE of both categories is greater than the square of the correlation (Byrne, 1994). The study found that the square root of AVE was larger than its correlation between every pair of constructs (Table 4). Thus, the study fulfills the discriminant validity criteria.

The structural model was well-fit to meet the criteria of fit indices; normed chi-square value (χ²/df) = 2.022, GFI = 0.923, AGFI = 0.907, CFI = 0.958, IFI = 0.959, NFI = 0.921, TLI = 0.953, RMSEA = 0.043 and RMR = 0.037. The path diagram for this model, Figure 2, displays the standardized path coefficient and a decision on each hypothesis was made based on the standardized estimate and p-value of the AMOS output of this model (Table 5). It was hypothesized in hypotheses 1a and 1b that IL positively affects the IRSB and ERSB of employees. The relationship between IL and IRSB was significant (β = 0.300, CR = 4.074, p = 0.000). Similarly, the influence of IL on ERSB was found significant (β = 0.244, CR = 3.155, p = 0.002); thus, the result approved hypotheses 1a and 1b. Hypothesis 2 assumes the positive impact of IL on IC. The result demonstrates a significant positive impact of IL on IC (β = 0.741, CR = 11.658, p = 0.000) and hypothesis 2 was accepted. The influence of IC on IRSB and ERSB was illustrated by hypotheses 3a and 3b. In the direct path, IC showed a significant relationship with both IRSB (β = 0.336, CR = 4.495, p = 0.000) and ERSB (β = 0.297, CR = 3.756, p = 0.000), hence, the study supported hypotheses 3a and 3b. Therefore, the results approved all the direct paths used in the current study.

In H4a to H4b, the study assesses the indirect impacts to comprehend the mediating effect of IC between IL and employee IRSB and ERSB. The study assessed the mediating role performing 5,000 bootstraps, 95% bias and accelerated confidence intervals. According to Preacher and Hayes (2008), the presence of zero between the upper bound (UB) and lower bound (LB) or a value of the lower limit that is not negative indicates the presence of a mediating effect. The indirect impact of IC on IL and IRSB was positive and significant (β = 0.249, LB = 0.111, UB = 0.389, p = 0.001) (Table 6). Thus, the result supported the indirect relationship between IL and IRSB through IC (H4a). Since the direct model, mediation model and standardized indirect effect were all found significant, the H4a demonstrated partial mediation. Similarly, the IC was found as a strong mediator between the relationship of IL and ERSB (β = 0.220, LB = 0.082, UB = 0.366, p = 0.003) (Table 6). Therefore, IC partially mediates the association between IL and ERSB, and H4b was accepted.

The results reveal that IL is positively associated with employee IRSB and ERSB, which is consistent with previous studies (Aboramadan et al., 2021; Duc and Tho, 2025; Liu, 2009). As supportive leaders, inclusive leaders allow subordinates in decision-making and provide them opportunities to reveal participative behavior in the service process (Duc and Tho, 2025; Shakil et al., 2021). Followers perceive an inclusive environment when inclusive leaders value their ideas and service process, which in turn, increases the perception of being valued by the leaders. As a result, FLEs tend to be encouraged to demonstrate quality service behavior by displaying IRSB and ERSB toward bank customers. Moreover, the positive relationship between IL and IC was found to be significant, and past studies also supported the same results (Çelik et al., 2024; Kuknor et al., 2025; Perry et al., 2021; Shore et al., 2018). Inclusive leaders create a culture of togetherness and value different perspectives of employees that generates synergetic outcomes with quality decisions, which leads to more inclusion of employees. Moreover, IL emphasizes uniqueness and belongingness, creating a culture of openness and empowerment. Thus, inclusive leaders focus on the logical distribution of power and authority, facilitating a climate of inclusion in the banks.

The current study also supported that IC positively correlates with ESB (IRSB and ERSB) which demonstrated consistency with previous studies (Ali et al., 2022; Çelik et al., 2024; Fu et al., 2025; Nelissen et al., 2017; Xu et al., 2022; Zhong et al., 2022). When subordinates feel a culture of belongingness and uniqueness, they tend to serve clients best. In the present context, if the employees are treated as insiders and provided the opportunity to share views to support each other in regular bank service, it will instigate front-line service providers to show better service behavior and serve effectively. FLEs feel inspired to provide quality service when bank leaders ensure a climate of inclusion through proper communication and information sharing, open discussion and friendly working culture. Moreover, the results confirm that IC works as a mediator between IL, IRSB and ERSB and authenticate earlier findings from the mainstream in which IC was identified as the mediator (Çelik et al., 2024; Kuknor et al., 2025; Luu, 2019; Meng et al., 2023; Perry et al., 2021; Tan et al., 2021; Zhang et al., 2020). In the current context, front-line bankers feel an IC when bank leaders practice an inclusive approach to leadership. In an inclusive working climate, employees find equal treatment, value and opportunity in decision-making, motivating bank employees to concentrate more on providing better service. Thus, the current findings indicate that inclusive leaders’ role is vital for an IC, which is equally important to inspire front-line bank employees to perform the prescribed responsibilities and go beyond to serve customers.

The study provides four specific theoretical implications. First, the influence of IL on ESB mediated by IC was overlooked in the context of the service sector, especially in the banking industry of a developing country. Consequently, the study offers insights into the inclusion literature on how inclusion in leadership and work climate enhances individual-level service performance. Second, the study adds to the body of knowledge on behavioral literature, specifically in service behavior. Limited studies investigated in-role and extra-role service behavior as employee outcomes of perceived IC and IL. When employees perceive included through leaders’ approach and the work setting, their customer service behavior is stimulated to ensure quality service.

Third, the study is one among the few attempts to examine the IC as a mediator (Alghofeli et al., 2024; Kuknor et al., 2025) and adds to the limited existing literature on IC in the service industry by assessing the possible mediating role in the association between IL and ESB. Fourth, this study extends the SET interpretation by assessing how the exchange mechanism of the relationship between IL, IC, IRSB and ERSB works in improving the service performance of the FLEs working in PCBs of Bangladesh. The current study provides the evidence of IL and IC as socio-emotional reasons to improve ESB. The study demonstrates the impact of IL and IC as social exchange or social approval to please the employees and make them perceive that leaders care for them by creating a culture of inclusiveness. Consequently, employees feel obliged and reciprocate the social exchange displaying dedicated service behavior.

The findings offer several essential practical implications for assisting the banking industry in improving FLEs' service behavior. First, FLEs in banking organizations directly interact with customers and their service behavior leads to service excellence; accordingly, our findings highlight improving employees’ service performance through IL. Specifically, the application of IL facilitates open discussion to achieve service goals, availability for addressing service problems, readiness to listen and capability to deal with emerging issues and problems. Moreover, inclusive leaders have direct communications with FLEs and they encourage employees’ opinions on service-related issues to improve task-related and discretionary service behavior. Second, the findings recommend that banks’ top management and policymakers should reform their strategies to attract and recruit leaders who demonstrate inclusive behaviors to create a supportive, participative and inclusive work environment for enhancing employees’ service dedication displaying IRSB and ERSB toward customers. Banks should arrange training to foster an inclusive work environment and development programs that facilitate managers to understand the advantages of practicing IL. Moreover, training programs can highlight how to adopt IL to accomplish maximum benefits, ensure an inclusive culture and stimulate service behavior.

Third, an IC should be emphasized to share information and knowledge and instigate prompt service and bank leaders might use an IC as a work culture to understand how employees perceive belongingness and uniqueness, which foster in-role and extra-role service performance. Consequently, banks are suggested to promote an IC both at management and different levels of employees. Moreover, the findings suggest that bank leaders should adopt inclusionary measures in everyday work to enhance employees’ positive perceptions regarding a climate of inclusion. Finally, bank leaders must see inclusion as a way to promote a diversity-inclusive civic culture. Therefore, leaders need to adopt inclusive strategies to motivate subordinates to share their ideas and insights and seriously utilize employee perspectives to improve service practices. An inclusive working environment needs to be prioritized through diversity management, employee participation and engaging employees in service performance. For instance, appointing more female leaders in managerial positions to promote the inclusion of gender diversity in banking organizations.

This study is not beyond limitations which can be the groundwork for further research. First, the current study was designed to be cross-sectional, but a longitudinal design could provide evidence of the consistency of the results. Hence, future research can test the same model by applying a longitudinal research design to rectify the outcomes. Second, it is encouraged to apply the model in a more generalized context, such as considering more service industries, health care, hospitality, tourism, power sector and so forth. Another interesting area for future exploration would be investigating other contemporary leadership practices, such as responsible leadership and service leadership as the predictors of ESB and comparing the consequences. Third, the study only focused on ESB toward customers; hence, it is recommended that future researchers examine ESB highlighting other dimensions, such as coworker-directed service behavior, and service quality can also be incorporated as the predicted variable following ESB.

Fourth, the study acknowledges the potential biases that may have affected the data collection process. The use of judgmental sampling may introduce selection bias, as respondents (FLEs) were chosen based on specific criteria, which may limit the generalizability of the findings to the broader banking workforce. Moreover, the current study only used a follower rating scale for measuring all the variables; therefore, there is a possibility of response bias, particularly given that the statements related to the ESB. Future studies can use multiple sources of data, specifically, supervisors’ ratings for measuring employees’ service behavior. Fifth, IC was used as the only mediator in the current study. Future studies can incorporate multiple mediation models injecting a climate for creativity, knowledge sharing, trust in leadership, perceived organizational support, etc. Moreover, the current model can be developed into a moderation-mediation model and management support, and intrinsic motivation can be incorporated as the moderating variables in future studies. Finally, examining each dimension of IL (such as openness, accessibility and availability) and its applicability to employee behavioral outcomes is recommended. Future studies can also explore multi-level models, for example, IL and IC as the team-level constructs and ESB as the individual-level construct.

The study recognized the importance of service behavior for competitive performance in the service organization. Integrating SET, the current study explored IL in the context of PCBs in Bangladesh and how it could be capitalized through IC in improving employee IRSB and ERSB. The study found the positive role of IL on ESB and the intervening impact of IC between them. The study demonstrates that bankers prefer an IC generated and practiced by inclusive leaders. In the current context, bank leaders need to ensure an IC, which can be a motivating factor for FLEs to display better service behavior as a reciprocal response to their contributions. Employees perceive inclusiveness positively, which has an impact on service performance. Therefore, banking organizations need to identify the determinants of inclusiveness perceived by employees and encourage managers to practice IL. To conclude, the study serves as evidence to consider that IL plays a vital role in improving ESB through cultivating a climate of inclusiveness which can make the banks more competitive in the banking industry of Bangladesh.