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The importance of the psychological bond between employees and organization has been underlined by many researchers (Haslam, 2004). This bond has been frequently called organizational identification and it has been defined as the “perception of oneness with or belongingness to the organization” (Ashforth & Mael, 1989, p. 34). However, organizations are not single and indivisible entities, but networks of groups that may elicit feelings of identification in themselves (van Knippenberg & van Schie, 2000). That means that employees may become identified not only with the whole organization but also frequently with smaller units (such as division, department or work-group) closer to their everyday labour life. The aims of this research are: 1) To examine the relationship between Work-Group Identification (WID) and whole Organizational Identification (OID); 2) To examine the relationship between transformational leadership and both ways of organizational identification; and 3) To analyse the relative importance of organizational identification and leadership in order to predict some important organizational outcome variables such as employee’s satisfaction and extra-effort, and perception of unit and leader effectiveness. The sample consisted of 290 nurses working in fifteen different services in a public hospital in the central area of Spain (Castilla-La Mancha Autonomous Region). The great majority (88.6%) were women and the mean age was 39 years (SD = 9.11). The mean organizational tenure was 14.5 years (SD = 9.51), the tenure in the service was 8.84 years (SD = 7.38) and they were working with the evaluated supervisor a mean of 5.77 years (SD = 5.07). Questionnaires were distributed personally among nurses from the different departments by a research assistant, working in the hospital. Participants were voluntary and anonymous. The results showed that WID is higher than OID and maintains higher correlations with all the organizational outcome variables used in the study. It is a specific contribution of this research to analyse the relative strength of identification and transformational leadership in predicting leader’s effectiveness and employees’ satisfaction and performance. We found that transformational leadership is stronger predictor of leader’s effectiveness and employees’ extra-effort than organizational or work-group identification. On the other hand, work-group identification has stronger impact on perceived unit’s effectiveness, and employees’ satisfaction (general and with the group) than transformational leadership. In conclusion, this study underlines the importance of work-group identification and leadership among the nurses of different departments in a public Spanish hospital.