The effect of leadership styles on employees’ performance at Bank of Africa, Kenya

Abstract

The study aimed at assessing the effect of leadership styles on employees’ performance at Bank of Africa, Kenya. The main objective of this study was to investigate the effect of different leadership styles (transformational, transactional, autocratic, and laissez-faire leadership styles) on employees’ performance of employees. A cross section descriptive survey research strategy was adopted in which 80 usable structured questionnaires were collected from 300 questionnaires distributed. The leadership styles were measured through the Multi factor Leadership Questionnaire developed by Avolio and Bass (1995), modified to fit the context of the study. Employee performance was measured by the scale of Yousef (2000). Descriptive and inferential statistical techniques were used for data analysis. In inferential statistics, Pearson’s correlation and regression analysis were used to assess both relationships and effects as per the hypotheses of the study. The findings show that transformational leadership style is the most exhibited style at the bank followed by the transactional leadership style and laissez-faire. Employee performance is above average. Overall, scores in transformational leadership style were found to be strongly correlated with both measures of employee performance and overall performance except for the intellectual simulation dimension, which had insignificant positive correlation with quality of performance. Transactional leadership style was found to be positively correlated with both measures of employee performance as well as overall performance. However, contingent rewards had a negative but insignificant correlation with performance while management by exception had insignificant positive correlations. Authoritative leadership style had insignificant relationship while laissez faire style had insignificant positive correlation. The results suggest that supervisors in organizations need to use a lot of transformational leadership behaviors or rather embrace transformational leadership style, but not laissez-faire leadership. From the results, transformational leadership could have greater effects on employee productivity and quality of performance. It is recommended therefore that Transformational and transactional leaderships are the most effective leadership styles. Key words: leadership style, transformational leadership, transactional leadership, authoritative leadership, laissez fare leadership, employee performance, job performance, banking, Kenya