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Chapter One of The Effect of Leadership Styles on Employees’ Performance
INTRODUCTION
BACKGROUND OF THE STUDY
In the present business environment, leadership styles have emerged as key to achieving greater organizational success because of their direct effect on employee motivation (Gopal and Chowdhury, 2014). Gouraki (2013) mention that human resources are one of the key components of organizational management, implying that human resource motivation is crucial to achieving set organizational goals and objectives.
According to Gopal and Chowdhury (2014), leadership styles are key factors that create and support high motivation levels among employees. Buble et al. (2014) showed a direct correlation between leadership style and employee motivation by demonstrating that an appropriate leadership style results in the most motivated workforce. Therefore, understanding the most appropriate and ideal leadership style is key to directing, influencing, changing, and controlling the behaviors of employees in the positive direction, a factor that results in a more motivated workforce. In the same vein, Rumasukun et al. (2015) explain that leadership style is directly correlated with employee motivation. According to the authors, leadership style has a direct impact on employees‟ confidence, trust, sense of belonging and involvement levels, factors that are essential in determining the extent to which employees are motivated. However, Rashid and Rashid (2012) note that there exist a significant different in the extent to which employee motivation is achieved in the public and private sectors. In a similar vein, the study by Irum et al. (2012) revealed that motivation levels among public sector employees significantly vary from that of employees in the private sector. Arguably, it can be reasoned that the approach to and leadership style embraced among organisational leaders in the private sector is different from that of organisational leaders in the public sector.
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According to Ile, (1999:217) there are some important implications in the concept of leadership, for instance, leadership involves others. In other words, leadership involves followers. The followers may be superiors, or peers, as well as the subordinates by their willingness to follow, accept directions from the leader, group members help define the leader’s status and make the leadership process possible. Thus, leadership demands followership. Leadership involves unequal distribution of power between leaders and group members. This is implied that group members are not powerless; they can and do shape group activities in a number of ways.
Leadership involves ability to use difference forms of power to influence followers’ behaviours in a number of ways. According to Appleby, (1981:117) leadership also involves the acceptance of responsibility for the achievement of the group objectives. Because of this, it is therefore, essential for trust and cooperation from both sides to be in evidence all the time.
“Leaders play essential role in accomplishment of goals and boost employee’s performance by satisfying them with their jobs” (p.55) Leadership is perhaps the most thoroughly investigated organizational variable that has a potential impact on employee performance (Cummings and Schwab, 1973). “It is a vital issue in every organization primarily because the decisions made by the leaders could lead to success or business failure”. Notably, it has been widely accepted that effective organizations require effective leadership and that employee performance together with organizational performance will suffer in direct proportion to the neglect of this, Fiedler and House (1988). Furthermore, it is generally accepted that the effectiveness of any set of people is largely dependent on the quality of its leadership – effective leader behavior facilitates the attainment of the follower’s desires, which then results in effective performance (Ristow, et al., 1999).
According to Albrecht (2011), performance is the extent to which an organization achieves a set of pre-defined targets that are unique to its mission. Leadership style is a key determinant of the success or failure of any organization. Numerous literatures on management mention various leadership styles and frameworks such as autocratic leadership, bureaucratic leadership, charismatic leadership, transactional leadership, and transformational leadership, all of which are based on several different approaches to leadership. Each style of leadership affects organizational performance differently; some helping organizations succeed and others hamper their growth leading to failure.
Whereas many different leadership theories have emerged from the last century, early theories on leadership concentrated on identifying qualities that differentiated between leaders and followers. Subsequent theories on leadership looked at other variables such as situational issues and levels of skill. Over time, a number of theories on leadership and performance have been proposed. Bratton (2007) observes that leadership theory types include two axes: of those which are related to organizational effectiveness and tend to be more prescriptive in orientation, and of those which are primarily analytic and meant to better understand the concept. However, it is not always easy to classify any of the theories as one or the other exclusively. Therefore, this study focuses on the effect of leadership styles on employees’ performance at united bank of Africa, Ota, Ogun state.
STATEMENT OF THE PROBLEM
It has been recognized throughout history that the difference between success and failure, whether in a business, war or game can be largely attributed to leadership style. According to Okenwa and Ugbo, (2001:108) leadership styles are the behaviours patterns of a leader when integrating organization and personal interest in pursuit of some goal or objectives.
Leadership style of management is a pre-requisite for effective accomplishment in organizations. The leadership styles determine the level of subordinate participation in decision making and the way an organization is run administratively. Organizations which are low in efficiency tend to have leaders who are highly bossy. Decision making is centered on them alone. Participation in decision making creates an individual’s mental and emotional involvement in a group situation which encourages him or her to contribute to group goals and share responsibility for them (Chruden and Sherman, 1975).
The problem with most commercial banks in Nigeria is that the leaders are not democratic in their relationship with their subordinate. In fact, leaders in most commercial banks in Nigeria are usually authoritarian in style. They dictate the tune and have the administration of the organization centered on them. The need for subordinate to participate in decision making is not a passing fancy. It is rooted deep in the culture of free men around the world and it is no doubt the basic drive in men.
Another problem affecting leadership style in commercial banks in Nigeria is the competence of the leaders so appointed. In most cases, some of their appointments lack merit. What becomes of such organization? is having competent leaders who lack the abilities or capacities to use the appropriate leadership style to lead the members to attain set goals or objectives. These problems make it glaring that there is a need to carry out a study on the effect of leadership styles on employees’ performance at united bank of Africa, Ota, Ogun state.
OBJECTIVES OF THE STUDY
The general objective of this study is to examine the effect of leadership styles on employees’ performance at united bank of Africa, Ota, Ogun state. The specific objectives of this study include the following:
1. To ascertain employees’ opinion on the form of leadership style practiced at united bank of Africa, Ota, Ogun state.
2. To find out the influence of leadership style on the job satisfaction of employees at united bank of Africa, Ota, Ogun state.
3. To examine the impact of employees’ motivation in united bank of Africa, Ota, Ogun state.
4. To determine the impact of the personality of a leader and the personality of subordinates on the leadership style.
5. To investigate if there is a relationship between the managerial leadership style and employees’ commitment in united bank of Africa, Ota, Ogun state.
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