Work Styles And Employees Performance In An Organization

Project and Seminar Material for Business Administration and Management BAM

Work Styles And Employees Performance In An Organization


Abstract


The study aimed at assessing the effect of work styles on employees’ performance at Gurantee Trust Bank, Nigeria. The main objective of this study was to investigate the effect of different work styles (transformational, transactional, autocratic, and laissez-faire work 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 work 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. 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 insignificantpositivecorrelation. 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 work styles.


Chapter One


Introduction

1.1 Background to the Study

In society today, thousands of individuals are appointed or elected to shoulder the role and responsibilities of leadership. Leadership is practiced in schools and colleges, factories and farms, business enterprises, dispensaries and hospitals, in the civil and military organizations of a country and public life, at all levels, in short in every walk of life. These leaders should promote unity, harmony, strength, prosperity and happiness in society.

The challenges of coping with today’s uncertain business environment have put many organizations on their toes to struggle for survival in the heat of competition. The driver of such strategic move towards surviving the competition is the leadership provided by managers who are expected to influence others in achieving organizational goals and also boost employee’s performance. Shafie et. al., (2013) explains the importance of leadership in organizations and especially on human beings who are apparently the biggest asset of any firm; “The main drivers of organizations are usually employees, they give life to the organizations and provide goals” (Shafie et al., 2013). It is very paramount to provide workers with direction and psychological satisfaction to get the best from them, this direction can only come from leaders. In fact, leadership is very critical for all organizations in realizing their set objectives. Since leadership is a key factor for improving the performance of many if not all organizations and the success or failure of an organization depends on the effectiveness of leadership at all levels. Paracha et al (2012) is in support of this “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 (Fiedler & House, 1988; Maritz, 1995; Ristow, et al., 1999).

Ipas (2012) reports that autocratic leadership to be the most used style by managers in the hotel industry arguing that it is perceived as a style that yields the most results. Aboshaiqah et al (2015) also looked at the link between leadership and employee performance among hospital nurses and report that the transformational and transactional work styles are significantly positively related to employee performance while laissez-faire is significantly negatively correlated to employee performance. Significant positive relationship between bot transformational and transactional work styles and employee performance is also reported in Pradeep and Prabhu (2011) in India, and in Kehinde and Banjo (2014) and Ejere and Abasilim (2013), both in Nigeria. Other studies in Africa are Tsigu and Rao (2012) and Gimuguni et al (2014) in Ehtiopian banking industry and Ugandan local government authorities respectively. While Tsigu and Rao finds that the transformation leadership explained the variation is employee performance better than transaction work style, Gimuguni et al report significantly positive relationship between autocratic, laissez-faire and democratic and performance.

Therefore, although the literature on leadership and employee performance is scattered across countries and across industry, the evidence of the effect of work style on employee performance is also varied. While most of the literature reviewed is somehow consistent in suggesting that both transformational and transactional work styles are significantly positively related to employee performance and that transformational style’s effect is more pronounced than that of the transactional work style (Rasool, et al., 2015; Kehinde and Bajo, 2014; Tsigu and Rao, 2015), the evidence on the relationship between laissez-faire and performance is not that straight forward. For example while, some are reporting negative relationship, e.g. Aboushaqah et al (2015), others like Gimuguni, et al (2014) have reported a positive relationship. This suggests that the evidence on this work style is inconsistent. In addition, neither all industries nor countries are covered in the literature. Of those reviewed, the medical field is represented (Rassol et al, 2015; Aboushaqah, et al 2015), local government authorities (Gimuguni, et al., 2014), hotel (Ipas, 2012), Petroleum (Kehinde and Bajo, 2014). Of more interest to this study is the paucity of researches in this area from Africa and East Africa in particular. A few reviewed here are Tsigu and Rao (2015), Ejere and Abasalim (2013) and Gimuguni (2015), Nuhu, (2010), but there are also those from South Africa (Howard, et al., 2003). While several industries are repreets in the growing body of evidence few are coming from the banking sector, see for example Tsigu and Rao (2015) from Ethiopian banking industry.

Therefore, from the preview of literature it is evident that the research evidence on the effect of work style on employee performance that work style can explain significant number of performance outcomes at individual and organizational level.

But the evidence is not evenly distributed across economies at large or even within African economies. It is also evident that evidence from the banking sector is lagging behind. It is these facts that have motivated this study in order to contribute evidence from the Nigerian banking industry.


1.2 Statement of Problem

Kehinde and Banjo (2014) emphasized on the importance of leaders in an organization “In today’s competitive environment, organizations expand globally and face a lot of challenges in meeting their objectives and chase to be more successful from others”. In this study the researcher sought to develop an interest in this topic from the many concerns of the shareholders of GTB Nigeria limited on increased drop in productivity/performance of the bank’s staff. Work styles affect everyone in the organization from senior management to temporary/ interns /contract employees. In the case of GTB, only a fraction of staff received bonuses which were purely pegged on performance implying that many employees failed to meet the set targets for the year 2014, this clearly shows that the performance of the past two years has not been to the expected standards.

Employee performance which is perceived as: Executing defined duties, meeting deadlines, team input, and the cohesion of both leadership and performance should be evident through style and approach used by managers in the attempt to cause efficiency which requires specific leadership approaches to unique performance challenges in achieving departmental goals. The above should as pointed by Armstrong (2005) lead to efficiency, specialization, effective feedback and good organizational relations. The independent variable (IV) in this study was work styles and indeed Richard et al (2010) states that leadership is the ability to influence people towards attainment of goals. This captures the idea that leaders are involved with other people in achievement of goals. This is an area of concern that promoted the researcher to carry out a study on the subject. The idea here is to assess performance of employees and test whether it is affected by employees’ perception of work style that is practiced by immediate supervisor.


1.3 Research Objective

1.3.1 General Objective

The objective of this study was therefore to investigate the effect of different work styles on the performance of employees at GTB Nigeria.

1.3.2 Specific Objectives

The study was guided by the following specific objectives:

  1. To evaluate the effects of transformational leadership on employee performance in Guaranteed Trust Bank Plc Nigeria
  2. To evaluate the effect of transactional leadership on employee performance in Guaranteed Trust Bank Plc.
  3. To evaluate the effect of laissez-faire work style on employee performance in Guaranteed Trust Bank Plc Nigeria.
  4. To evaluate the effect of autocratic leadership on employee performance in Guaranteed Trust Bank Plc Nigeria

1.4 Research Questions

The study sought to answer the following questions;

  1. What is the effect of transformational work style on employee performance in Guaranteed Trust Bank Plc Nigeria?
  2. What is the effect of transactional work style on employee performance in Guaranteed Trust Bank Plc Nigeria?
  3. What is the effect of laissez -faire work style on employee performance in Guaranteed Trust Bank Plc Nigeria?
  4. What is the effect of Autocratic work style on employee performance in Guaranteed Trust Bank Plc Nigeria?

1.5 Significance of the Study

The researcher hopes that in view of this study:

The basis and findings of this research will be useful by future researchers, students and academicians digesting the effects and importance of different work styles on employee performance.

After determining the relationship between work style and employee performance, the bank will be in a better position to use the findings of this research to develop leadership programmes that will see leaders acquire relevant leadership skills for effective management and organizational performance.

This study’s findings will assist different leaders in identifying the best and the most appropriate work style to use in relevant situations for team effectiveness and increased staff productivity.


1.6 Scope of the Study

This study was carried out on work styles and Employees Performance in an organization. The study was delimited to GTB plc in Uyo metropolis, Akwa Ibom state, Nigeria.


1.7 Limitation of the Study

The following limitations were anticipated in this study:

Since the study was only carried out in only one province, the results may not be generalisable to the whole country. The researcher collected data on his own without research assistants.

Financial constraints were also anticipated in the current study. Although the researcher received assistance from the bursary, it was not possible to carry out the study at national level.

The researcher is a full time employee so time to carry out the study was limited.


1.8 Organization of Study

The study is organized into five chapters. Chapter one deals with the study’s introduction and gives a background to the study. Chapter two reviews related and relevant literature. The chapter three gives the research methodology while the chapter four gives the study’s analysis and interpretation of data. The study concludes with chapter five which deals on the summary, conclusion and recommendation.


Chapter Five


Conclusions, Implications and Recommendations

5.1 Summary of Key Findings

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.

Transformational leadership style significantly positively affected employee performance while transactional leadership style affected employee performance significantly negatively. Authoritative and laissez faire work styles exhibited insignificant negative and positive effects on employees’ performance, respectively.


5.2 Conclusions and Implications

From the study findings it can be concluded that supervisors who are driven by the desire to achieve better performance from his/her employees should try and exhibit more of transformation leadership style and less of the rest of the styles.


5.3 Recommendations

Banks expect employees to perform, supervisors expect their followers to perform too. The results of this study provided insights into what employees need from their supervisors and the kind of leadership behaviors they prefer. This information could be used to help develop strategies and meet organizational needs through leadership behavior development. According to the results, some strategies for improving supervisor’s leadership and employee performance could be suggested. It indicated that transformational leadership behavior would lead to higher employee performance. The leaders or supervisors should be aware of what is important for the subordinates and the organizations as a whole and encourage the employees to see the opportunities and challenges around them creatively. The supervisors should also have their own visions and development plans for followers, working in groups and champion team work spirit.

The supervisors should have sense of innovation and also encourage followers to seek more opportunities and possibilities, not just achieve performance within expectations. Supervisors should understand the values of the followers and try to build their departmental/ unit’s business strategies, plans, processes and practices that will likely to improve the wellbeing of staff. Respect for individual is also very key in building a positive relationship between leaders and employees. Employees

prefer to idealized attributes leadership behaviors from their supervisor because it can increase their level of performance. Employees would like to see more of idealized attributes in their supervisors; therefore, the supervisors should act to promote faith from their subordinates. They should connect with the working groups and the individuals beyond self-interest. A sense of confidence and power for the workloads should be displayed.

Supervisor’s authoritative leadership style will decrease employee performance. So they should try to avoid this type of leadership style. Contrarily, supervisors should clarify expectations and provide goals and standards to be achieved for the followers. They should not wait until the problems become more serious and then act/ take action they should monitor performance on timely basis. Whenever a problem arises, supervisors should try to intervene into the issues as soon as possible. Supervisors should respond to urgent questions and make decisions promptly and precisely. They should not be afraid of getting involved in problem solving. Regarding to the results of correlation analysis, it indicated that transformational leadership, transactional leadership and authoritative leadership all have significant correlations with employee performance. Transformational leadership had strong and positive correlations with employee productivity, quality and overall performance. The group of specific behaviors factors of transformational leadership positively correlated with employee performance. Therefore, as mentioned before, leaders or supervisors should be aware of the importance of transformational leadership style and try to put it in practice. Authoritative leadership had a negative correlation with employee performance. It was obvious to see that authoritative leadership is not an effective leadership style. So supervisors should try to avoid this style. Supervisors should enrich the knowledge about the perceptions of leaders’ behaviors and how these behaviors relate to employee performance. Based on the results of the current study, leadership development programs could help leaders understand the relationships between effective work styles and employee performance.


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Frequently Asked Questions


What are the leadership styles that affect the performance of employees?

The leadership styles (transformational & transactional) with respect to the performance of employees. Both these styles have significant impact upon t he performance of the individuals. But the does not mean that they do not reward their employees for better performance. On the motivate and encourage their employees.

Does leadership style affect employees’ performance in fcck?

The study adopts structural equation model to analyze data through Smart PLS 2. Findings from the study show that transactional leadership style has a positive significant relationship with employees’ performance. Contrary, transformational leadership style is not significantly related to employees’ performance in FCCK.

Do transformational and transactional leadership styles affect employees’ performance?

Contrary, transformational leadership style is not significantly related to employees’ performance in FCCK. The moderating result shows that emotional intelligence significantly moderates the relationship between both the transactional, transformational leadership styles and employees’ performance.

Does leadership style affect work-related outcomes in nonprofit organizations?

Due to the limited number of studies conducted on leadership in nonprofit organizations, this study theoretically and empirically contributes to the leadership literature as it is the first study to investigate the two styles of leadership on work-related outcomes via work engagement in the nonprofit sector.

Which leadership style has the greatest impact on performance?

Regression analysis was conducted to analyses the data using SPSS 21. The result shows that autocratic and democratic leadership style has positive and significant impact on employee performance. However we found that laissez-fair leadership style have no significant influence on employee performance.

How do different leadership styles help employees grow and work better?

Therefore, different leadership styles allow employees to grow more and work better. One example is transformational leadership which is when leaders motivate their employees to exceed certain expectations (Asrar-us-Haq and Kuchinke). In the study conducted by Asrar-us-Haq and Kuchinke, they analyzed how employees felt toward their leaders.

How does leadership affect employee performance?

Good Leadership = Increased Employee Performance Leadership directly affects employee performance, with regards to their contributions to the organization. There are elements of group performance that cannot be taught as hard skills, they are rather encouraged through the relationships between the employees and their leaders.

What are the disadvantages of laissez faire leadership styles?

On the other hand, the study found that laissez-faire leadership styles result in employees being dissatisfied, unproductive and inefficient in their work. The relationship that a leader develops with his employees is a direct factor in how that employee performs their tasks.

How does leadership style affect employees’ performance?

This research points out that employees performance is influenced by many organizational factors ranging from salaries, job autonomy, job security, work place to leadership. In particular Leaders within an organization can adopt appropriate leadership style to affect employees’ job satisfaction.

Does laissez-faire leadership style improve employee performance?

This has been supported by Puni, et al. (2014) and Akor (2014) research. Laissez-faire leadership style beta coefficient value is 0.241 with a significant value of 0.003 which is lower than 0.01, hence laissez-faire leadership is found to have a positive significant impact on employee performance.

What is the difference between transformational and laissez-faire leadership?

The study found that “transformational leadership has positive influence on employee self-efficacy, motivation, creativity, and organizational performance” (Asrar-us-Haq and Kuchinke). On the other hand, the study found that laissez-faire leadership styles result in employees being dissatisfied, unproductive and inefficient in their work.

Do employees have faith in their leaders?

These are not encouraging statistics, particularly when we hear so many leaders profess the importance of employee engagement. As it turns out, many employees have little faith in their organization’s leadership. Our research shows that three drivers influence employee engagement:

What is the relationship between transactional leadership and job performance?

Relationship between transactional leadership style and job performance. Thus, it can be job performance and ultimately increasing organizational effectiveness. Mir M. Shah & Kamal Bin. Hamid/ Transactional Leadership and Job Performance: An Empirical Investigation Anitha, J. (2014). Determinants of employee engagement and their impact on employee

How important are leadership styles for organizational performance?

Similarly, leadership styles have been measured as the potential and significant predictor for various organizational outcomes. Among all, transformational and transactional leadership styles have been measured as important traits for employees’ performance.

Is your leadership style transactional or transformational?

A leader may naturally gravitate towards either the transactional or transformational side in their style and methods. However, the best leaders understand that both can be utilized and integrated into their overall leadership toolkit.

How does leadership style affect higher education performance?

Among all, transformational and transactional leadership styles have been measured as important traits for employees’ performance. Likewise, the employees’ performance is considered as the dynamic factor that is solely responsible either for failure or success of organizations including higher education institutions (HEIs).

Do nonprofits need to select leaders based on their leadership styles?

Finally, the results of the current study provide insights for nonprofits on the importance of recruiting leaders to improve the organization’s performance and fulfill the leader-organization fit. Hence, nonprofits need to select leaders who are knowledgeable about different leadership styles and their consequences in the workplace.

Should nonprofit leaders use transactional or transformational leadership?

Furthermore, our results suggest that the presence of both transactional and transformational leadership is important for work engagement among nonprofits, as leaders can perform well when using both styles (Zigarmi et al., 2004). Every leader needs to use different styles of leadership (Bass and Riggio, 2006).

What influences the attitudes and behaviors of Nonprofit employees?

Practically, the results of our study provide insights on how the attitudes and behaviors of employees in nonprofits can be influenced by their leaders’ and supervisors’ behaviors. Moreover, the study recommends nonprofits to highlight the importance of leadership development in their organizations.

Does leadership style influence employees’ work performance?

Therefore, it is believed that with effective implementation of a leadership style, there would be a higher probability that employees would be engaged in their work, ultimately showing higher levels of dedication and extra-role behaviors. Based on this discussion, the following hypotheses were formulated: H5. 

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