Effects of leadership styles on employees’ performance: Evidence from a commercial bank in Kenya

Abstract

Success of organisations depends on how leaders mobilize and direct resources towards the achievement of organisational goals. Human resource - being the binder of all other resources - needs direction, which should be provided by leadership. However, there is no “one-fits-all” leadership style. This study investigated the effects of different leadership styles on employees’ performance. Eighty usable questionnaires were obtained from a cross-sectional survey of 300 employees of a selected commercial bank in Kenya. Extensively used multi-item scales from previous studies were adapted to assess leadership styles and employees’ performance. Inferential statistical techniques were used to test the study’s hypotheses. Employees’ performance was above average while transformational leadership was the most exhibited style. Respectively, transformational and transactional leadership styles positively and negatively affected employees’ performance. Authoritative and aissezfaire leadership styles respectively had insignificant negative and positive effect. More variation in employees’ performance was explained by transformational than by transactional leadership style. In the disaggregated results of transformational leadership, the idealized influence dimension had a significant positive effect on employees’ performance while the other dimensions had insignificant effects. It is recommended that supervisors should embrace transformational leadership style, especially the idealized influence, to enhance the performance of their followers.