Home > Subjects > HR > Effect of Leadership Styles on Performance of Employees

Effect of Leadership Styles on Performance of Employees

153 views

Impact of Leadership Styles on Employees Performance in Manufacturing and Service Organizations

ABSTRACT

The study was conducted to find out the leadership styles effect on performance of employees in manufacturing and service organizations. Researcher investigated the five different leadership styles “transformational, transactional, authoritative, laissez-faire and participative leadership styles”. Objective of the research was to find out whether these leadership styles positively or negatively affect the performance of employees. Researcher collected data from the manufacturing and service organizations to access which leadership style their supervisor practice on them or through this their performance increases or decreases. On normal data researcher applied the descriptive and inferential statistical techniques to analyze the data. In inferential analysis, to find out the relationship between variables and researcher used the Pearson correlation or to find the leadership styles effect on performance of employees, researcher used the regression analysis. Researcher found out that in manufacturing and service organizations mostly leaders adopt the transformation leadership styles to give equal importance to all employees. Results of research also suggest that supervisors have to adopt the transformation leadership styles so that the performance of employees can increase. After the transformation leadership styles it is suggested to use the participate leadership styles or should give a chance to employees to participate in all discussions. After that it is followed by the transnational leadership styles. Researcher suggested that leaders have to avoid the laissez-faire or authoritative leadership styles.

The main objective of the study is to find out the the different leadership styles effect on performance of employees. In every organization whether it be manufacturing or a service organization, a supervisor gives guidance to subordinates. For guidance or assistance supervisor chooses any leadership style. The selection of this style should depend on the nature of work. Best leader is one who considers the individual needs and respect of subordinates and also gives them the authority to take decision by themselves if any problem arises. Through these strategies the performance of employees increases automatically. In this study researcher attempts to find out the effect of five different leadership styles (transformational, transactional, authoritative, laissez-faire and participative) on employee performance in manufacturing and service organizations. This study was conducted among Managerial and Non-Managerial employees like Training coordinator, Finance and Security coordinator, Internee, Human resource officer, Assistant director, Trade Marketing Manager, Marketing executive, Supply chain cost controller, Management officer, Account officer, Sales taxation officer, Tourism officer, Assistant director tourism, Assistant accountant, Management operations, Assistant director research, Receptionist, Marketing assistant, Graphic designer, and Software engineer in manufacturing and service organizations. The respondents that were chosen in manufacturing and service organizations were somehow involved in leadership management, decision making and in operations of organizations. The population of this study included 150 employees who were working under leaders or were affected by some leadership style. The 150 questionnaire were distributed in only the manufacturing and service organizations of Lahore. Before distributing the questionnaire, researcher consulted firstly the Human Resource Department or described them the purpose of this survey. Through Human Resource Department researcher took the time or day to visit their organization.

1.1 Background of the Study

In any organization whether it be a manufacturing and service organization, they appoint thousands of people as a leader. They perform the duties of leadership or adopt various leadership styles. In every fields, whether it be a school, firm , university, college, manufacturing and service organization, public or private organization and hospitals, in all places a leadership style is practiced by the leader to guide, to bring harmony, unity, success and strength in his employees. Today the environment is getting very challenging and to cope with these challenges every organization has to struggle to meet its mission. The best move that the organization takes to survive in this competitive environment is to hire some leader. This leader through his effective leadership style helps the organization to survive through the struggle of his employees. Manager through their leadership style influence subordinates, boost their performance and thus they achieve the organizational goals effectively. Researcher explained the importance of leadership or concluded that leaders are the important or biggest asset of all manufacturing and service organizations. They are the main drivers who give life, provide goals and objectives to organizations(Shafie, 2013). They provide direction to employees, correct their mistakes, guide them continuously or set objectives for them. Above all by assuring all these things they also provide employees with psychological or internal satisfaction. In fact leadership is very important factor for the success/failure of any organization or help in improving the performance of all organizations. Leadership plays a very crucial role in completion of goals, mission,  objectives and increasing the performance of employees. Besides this leadership also plays its role in satisfying the employees with their jobs(Paracha, 2012). Leadership is the mostly investigated variable by the researcher, they found its impact on performance of employees(Schwab, 1973). Leadership is very important for all organizations because success or failure of organizations depends on the business decisions made by the leaders. Researcher found out that organizations hire effective leader who enhances the organizational performance together with employee performance(Fiedler, 1988). Performance of employees depends on the leadership style and quality of leadership. A good leader also ponder on the desires of his subordinates, in return subordinates show effective performance(Ristow, 1999). Previously various studies found out the leadership styles effect on performance of employees and relationship between two given variables. For example (Pradeep, 2015), (Rasool, 2015),(Shafie, 2013), (Stacks, 2012), (Ipas, 2012) etc. Research was done on health sector of Pakistan and found out that transformational style impact is higher on employee performance than transactional leadership style. Researcher did research on private or public sector organizations or concluded that transformational or transactional leadership style have a positive relationship or have positive impact on employee performance while laissez-faire style have a negative relationship or negative impact on employee performance in India(Palanichamy, 2015). Ipas in 2012 did research on leadership styles adopted in hotel industry and found out that autocratic leadership styles result into the highest performance of employees(Ipas, 2012). Researcher also found out that due to transformational leadership style, hospital nurses show best performances(Aboshaiqah, 2015).  In India and Nigeria researchers found out the similar result that transformational leadership has a positive effect on performance of employees(Prabhu, 2011), (Ejere, 2013). Literature previously examined concluded that transformational or transactional leadership styles have a high impact on employee performance or these two leadership styles have a positive relationship(Rasool, 2015). Researcher concluded that negative relationship exists between leadership style or employee performance(Gimuguni, 2014). This shows that the researches on the leadership style or performance are not the same or consistent. Researchers also made researche in Hotel industry, Petroleum industry, banking sector, government organizations. From literature it was viewed that in Pakistan manufacturing organization, this area was lagging behind or neglected so the focus of this study beside service organizations also was on manufacturing organizations (Awino, 2015).

1.2 Objective of the Study

In this survey, objective which researcher kept in mind was:

  1. To do the analysis of leadership styles in manufacturing and service organizations
  2. To analyze the performance of employees in manufacturing and service organizations
  3. To analyze the effect of leadership style on performance of employees in manufacturing and service organizations

1.3 Significance of Study

The aim of this study is to improve the performance of employees through different leadership styles. It shows the effect of five leadership styles on performance of employees. This research study is significant in various aspects. It will contribute to the existing knowledge of leadership styles. So the findings of the present study will help the leaders that through which leadership style they can enhance the performance of employees. In an organization if a leader knows his leadership style then he better knows that what are his strengths and weaknesses. Leader can focus more on his weaknesses or can be a proactive or effective leader by utilization of his strength, empowering his employees and they show better performance.

This research work addresses the various problems and effects of different leadership styles on employee performance as well.

It is hoped that when this research work will complete successfully it will provide the guidance to the manufacturing and service organizations and will help in increasing the performance of employees or organization. It will also help the management of manufacturing and service organizations for the selection of leadership in organization.

This research shows that employees or supervisor both are the asset of the organization. It will help the staff to understand their roles, value and obligations in organization.  It will also show the reason why workforce shows positive or negative behavior regarding any leadership style. This study addresses the challenge of employees and of management which is attached to increase performance and productivity.

This research will help in understanding the term leadership styles that every leader or planner can use to make new strategies, designs and processes that will help them to face the high competitive and complex business environment.

From this research besides service organizations, all manufacturing organizations can take benefit that which leadership style will remain best for them. Leaders can get help from them that what leadership style employees want from their supervisor. If the leaders adopt the same behavior that employees want from their supervisor then they can boost the satisfaction or performance level of employees. This will result into the high performance of individual and of organization as well.

This study will also be helpful for future research work and for academic purpose as well. This thesis work will serve as a reference document to students, leaders, employees, manufacturing and service organizations.

Finally in future this research will help the future researcher who also wants to work on the leadership styles or on performance and productivity. There is possibility and hope that future researcher will use the findings of this study which will put a positive impact on business environment.

[sociallocker]

1.4 Problem Statement

This research work “to find the effect of leadership styles on employee performance in manufacturing and service organizations” investigates the best leadership style that increases the employee performance. Many manufacturing and service organizations face the problems like low performance, innovation, not meeting performance targets. These all problems happen due to poor leadership styles. To resolve this issue researcher investigates this topic.

One of the major problem researchers noticed in manufacturing and service organization is the inflexibility of leadership styles adopted by the leaders. In business environment due to changing nature they fail to adjust their style with new situations. This failure is due to the fact that no one particular leadership style can fit into all conditions. All styles must be flexible according to the situations.

Another problem is that manager sometimes don’t completely understand the situation or their leadership style does not come fit to the situation so the performance of employees get down because tasks don’t complete on time. Sometimes there is also the lack of communication between manager and subordinates so this style acts as a hurdle for the success of many organizations. While sometimes supervisor lacks managerial experience in ensuring that followers are showing high performance.

In 2014, Kehinde and Banjo in their work focused on the importance of leaders. Leaders in any organization, whether it be manufacturing or service organization, depending on their project adopt different style of leadership behavior. The success of the organization depends on how well the team leader guides his followers to the accomplishment of goals and missions of organization. In today’s dynamic environment, the organizations are going very competitive due to the rapidly changing technology, globalization challenges, mergers and acquisitions. So the organizations face a lot of challenges to cope these situations. Then the organizations need some leaders who through their vision or leadership qualities guide their subordinates or help the organization in meeting the objectives, mission and goal of organization. If the leader works enthusiastically then the organizations can become successful than their competitors. In this study the focus was on the manufacturing and service organizations both. In service organization leader guides his subordinates to how to provide services efficiently or effectively while utilizing the minimum resources. Same in the manufacturing organizations leaders give strategies to their followers how they can minimize their expenses, by utilizing limited resources and how they should convert input into output. How they can increase their production. If the leader is honest with his duty then automatically somehow he converts his employees into productive individuals by teaching them through his effective leadership styles. If the employees get satisfy from the style of the leadership then employees show motivation towards their work or thus the performance of employees increases.

In this study, researcher tried to develop an interest in this topic from many concerns of the employees of manufacturing and service organizations on increased/drop in performance/productivity of employees. Leadership style affects every employee in organization whether he be a contract employee, middle level employee or management officer. In case of manufacturing and service organizations, the researcher addressed the issue that performance of employees was not according to the set standards. Researcher found out that which leadership style leaders adopt and what effect of this style was on employee performance. May be leaders not adopt the best style regarding to the project therefore the performance of employees decrease in manufacturing and service organizations.

Employee performance which is defined as: timely executing the set duties, complete the tasks on deadlines, team work, quality of work and productivity in work etc. Performance can be evaluated through the leadership style adopted by the manager in the completion of organization goals. Through feedback performance of employees can be evaluated.

Researcher defined that leadership style is the ability through which leaders influence his subordinates, empower his followers, guide and teach his employees, how to achieve the missions of organization or to improve the work performance (Stacks, 2012). They gave the idea that leaders through increasing their performance help in achieving the goal of organization. This concept gave the ideas to the researcher to work on it and evaluate the performance of employees by testing the perception of leadership style adopted by the supervisor.

1.5 Scope of study

The scope of this research is limited to manufacturing and service organizations in Pakistan. The theoretical issue that this study discussed is the leadership style and performance. This research work focused only five leadership styles and explores their effect on performance of employees. The purpose of this study is to identify which leadership style employee prefers, through which leadership style performance of employees or of organization increases. This study focuses on the five leadership styles and found its impact on performance of employees. When manager uses his authority with good leadership style, then employees also cooperate with their supervisor or show good performance and organization gets successful. There are many benefits of effective leadership style in any organization.

  • Leadership style increases the motivation level of employees.

Leader through his leadership style influences the behavior of employees or enhances the involvement of subordinates in their assigned tasks. Leader makes the employees self-confident, this increases the morale of subordinates or helps in achieving the mission of organization.

  • Leadership style leads to higher performance of employees.

A good leader through his style increases the performance of employees and motivates the subordinates to struggle collectively for the accomplishment of goals. Due to higher performance, productivity and profitability of organization increases in competitive market.

  • Leadership style leads to the success of organization

A good leader individually cannot bring success into organization. Leader with his style inspires or motivates individuals or increases their efficiency or collectively with their efforts they complete the mission then organization become successful.

  • Leader through his leadership style makes a quick response to dynamic changes

In today’s competitive environment successful organizations have to respond quickly to changes. When change come in technology, plans, methods or in any process employees always show reluctant behavior to adopt to change. Here leader can create a cooperative or supportive environment or can help them in completing their tasks by making their team. These all leadership efforts can make the change process successful.

  • Work Environment

In this study researcher found out that in both manufacturing and service organizations which leadership style increases the performance of employees. Because for each leadership style, some work environments are ideal. Leadership style is an asset of leader if it comes fit into the work environment of organization.

  • Leadership Skills

Through this study a leader can know which style employees prefer from their supervisor. Through the leadership skills, leader develops the processes through which goals can be achieved. Organizations have a benchmark, leader compare the performance of employees with this benchmark or gives direction to employees.

1.6 Research Questions

  1. How transformational leadership style effects the performance of employees in manufacturing and service organizations?
  2. How transactional leadership style effects the performance of employees in manufacturing and service organizations?
  3. How laissez-faire leadership style effects the performance of employees in manufacturing and service organizations?
  4. How autocratic leadership style effects the performance of employees in manufacturing and service organizations?
  5. How participative leadership style effects the performance of employees in manufacturing and service organizations?

1.8 Structure of thesis:

The purpose of this thesis is to find out the effect of five leadership styles on performance of employees in manufacturing and service organizations. This thesis covers the five sections. In first section that is the introduction section, researcher discussed the topic such as; background of study, objective of study, significance and scope of study. In section 2 that is of literature review researcher defined the variables, made the research framework and made hypothesis. Chapter 3 of research methodology discusses the research type and data analysis techniques. Chapter 4 covers the analysis of data. In the last section researcher explained the conclusion of study or give recommendations and talked about the limitations of research and future work.

2.0 Overview

This chapter gives the complete description of literature review of this research. Researcher took help from the past studies that were done on almost the same topic. Researcher made the framework of this study by giving a complete description of the dependent and independent variables. This chapter consists of following parts; Literature review, conceptual definition of variables, effect of independent variable on dependent variable and hypothesis statements.

Researcher found out in the study that by using the transformational leadership style, organizations can reduce the stress of their employees(Bushra, 2011). Transformational and transactional leadership styles increase the job satisfaction of the employees (Abd Rahman Ahmad, 2013). Effective leadership style contributes to the success of the organization or increases the satisfaction or performance of employees (Abd Rahman Ahmad, 2013). There exists a strong positive relationship between leadership style and job performance and job satisfaction (Dr. Revenio C. Jalagat, 2016). An effective leader has the following characteristics: he has the flexible nature, knows how to handle the situation, considers not only short term problems but also focus on long term problems, knows how to manage or control, adopts transformational methods  and strategy over transactional leadership style, keeps an eye on future decisions or events, makes timely decisions, gives weightage to the new ideas of the subordinates, shows responsiveness to the job related, personal concerns of employees, gives them the instructions or completely describes the process or procedures to employees, motivates followers or try to develop potential in them to become so that in future they can also become good leader (Dr. Van S. Dalluay, 2016). Researcher in the study discussed three leadership styles which are Democratic, Autocratic and Laissez-Faire leadership styles. They considered these three leadership styles or test the relationship of these styles with job performance or job satisfaction of employees (Dr. Revenio C. Jalagat, 2016).

Organizations are expanded globally to face the today’s competitive environment. To compete the other organizations or to meet their objective and mission they are facing a lot of challenges. To cope the competitive environment, to be successful or to survive organizations are struggling to their toes. Approach/Strategy that the organizations use to survive in such competition is the leadership. Leader through his leadership qualities influence workforce and provide guidance to employees to complete the organization mission. Above all leader helps the employees to increase their performance in the organization (Hassan B. , 2014).

2.1 Conceptual Definitions of Variables

  • 2.1.1 Leadership

In every organization whether it is manufacturing or service, employees need some sort of leadership for the completion of their assigned tasks(Naile, 2014). Whether the business structure is sole proprietorship, partnership, corporation and other types, leadership plays an important role in managing and leading the human resources, facilities, budgets and other resources in an efficient and effective manner(Tarrant, 2011). Researcher defined that leader is the one who help the workforce in completion of their goals or help them in boosting their performance by satisfying them with their duties (Hassan B. , 2014). The success of any organization is due to its effective leadership style(Dr. Van S. Dalluay, 2016). Leaders have the visionary mind. They influence other people through their personality and make them enable to become leaders and achieve the mission of the organization. Supervisor in any firm whether it is manufacturing or service organization has the authority, or their followers respect their decisions or give full trust to their decisions. Through this way through the joint efforts of employee or boss, by respecting each other, organizations achieve its objectives(Dr. Revenio C. Jalagat, 2016).

Whether the business is sole proprietor, corporation or partnership, to manage or facilitate the human resource leadership plays a very critical role. Leader makes critical decisions of organization whether it is manufacturing or service organization. They handle the resources in very efficient manner (Dr. Van S. Dalluay, 2016). Due to demographical changes, technological changes, or rapidly changing work practices leadership concept evolved in manufacturing or service organizations. Leadership is a multidimensional construct so defining it in a universal definition is difficult. Different researchers gave different definitions of Leadership or leadership styles. Leadership is a process through which supervisor influence their subordinates to achieve certain goals of organization. (Alonderiene, 2015) . Researcher described in his research that a good leader could make their subordinates to perform best by utilizing his highest capabilities (Abd Rahman Ahmad, 2013). Leader through his leadership style can effect employee performance, productivity and satisfaction (Kehinde, 2014).

  • 2.1.2 Leadership Style

In this paper focus is on leadership style. Different leaders adopt different leadership styles depending upon the situation or requirement of a project. Leadership is the process through which supervisor give direction to his subordinates and inspires them through his personality to complete the assign tasks or activities of the organization. While style is the different behavior patterns adopted by the leaders during guiding their subordinates. Most common leadership styles that mostly effective leaders adopt are the Transformational, Transactional Leadership styles. Appropriate leadership style leads the employees to work effectively. Thus employees show high performance in assigned tasks (Abd Rahman Ahmad, 2013). Researcher did research and find out the relationship between leadership style and employee performance (A, 2014). There are many styles of leadership. Leaders adopt different leadership styles depending upon the situation or project requirements. Depending upon the leadership style, leaders adopt various skills or attitude to increase the job performance of employees (Abd Rahman Ahmad, 2013). In 2011, Bushra defined many leadership styles. Out of these in this study we are going to see the impact of the following leadership styles: Authoritative, Laissez-faire, Participative, Transformational and Transactional leadership on employee performance (Bushra, 2011)

  • 2.1.3 Transformational Leadership

In 2005, Avolio & Gardner found out in his study that in early 1970’s, research on leadership took a U-turn from traditional leadership style to positive forms of leadership. In 1978 Burns introduced the concept of transformational leadership style between political leaders and their employees. According to him this style is the continuous process in which leader or its follower both work for the collective interest rather than the individual interest. In 2002, researcher concluded that through this style leader transform its follower to take decisions by themselves, tell them clear vision or give motivation to employees then they show high performance (Julia E. Hoch, 2016).

Transformational leadership enhances the employee job performance. In 1978 Burns introduced the transformational leadership concept. According to him a leader is having a transformational leadership style when he helps their employee to enhance their level of morals, beliefs, perceptions and help in building coalition with the organization objectives. After the Burns work, in 1995 Bass and Avolio put their contribution in this regard. They divided the transformational leadership style into four parts; Idealized Influence, Intellectual Simulation, Individual Consideration and Inspirational Motivation (Bushra, 2011). Now Idealized influence is further divided into two components that are Idealized Influence(Attributed) and Idealized Influence(Behavioral). Transformational leaders make their subordinates to think creatively or from different angles to solve the problems. He is always supportive or makes their employees productive. Transformational leader is one that makes the employees to use its own intelligence to solve critical problems, clearly tells the goal, mission and objectives to employees and give them appreciation or built their confidence that whatever they do with effort or motivation will surely is the best or result in success of the organization(Amarjit Gill1, 2010). Transformational leader works for the wellbeing of subordinates(Men, 2010). Transformational leader believes on power sharing and on de-centralized decision making(Men, 2010).

In 2011, researcher concluded that job satisfaction is positively affected by the transformational leadership(Bushra, 2011). Beside this various studies described the relationship between transformational leadership and employee satisfaction, supervisor satisfaction, job performance, job retention, job stress and job engagement etc.(Hoch, 2016). Transformational leadership is related to employee, commitment, satisfaction and performance(Hoch, 2016). Transformational leader clearly defines the goals and objectives of organization to its subordinates and guides them properly or make them think innovatively. Due to this employee get complete understanding of their work. They show complete satisfaction or high performance in their work which reduces the stress of the employees in their routine tasks(Amarjit Gill1, 2010). Transformational leader is one that makes the employees to think more than just they planned previously.(Tan Yushuang, 2013).In transformational leadership style, training of employees begins with the session of ice-breaking and end to session of idealized influence(Yudhawati, 2016). In this training they give the employees the vision and explain them what they have to do to achieve this vision, they make the employees to be optimistic or give them the confidence to make decisions without any fear. Leaders give trust or confidence to employees or in return employees give respect to its leader or consider his leader as the role model(Yudhawati, 2016). Thi Thu Nguyen found out in his study that transformational leadership indirectly effect managerial performance (Nguyen, 2016).Transformational leader articulate long term vision in employees or they get motivated through their supervisor charisma or put extra effort beside to improve their performance. In 2016, researcher found out in his research that employees who are inspired from the personality attributes of their supervisor, also try to walk on the footsteps of their boss, thus such employees show best performance (Mia, 2016).Another researcher concluded in his research that if leader include ethical or moral attributes in their personality then this style can become more effective. And then the relationship of employer or employee will become more strong (Julia E. Hoch, 2016). In 2016, it was found that transformational leadership style has high validity and is related to trust of employees, commitment, performance and satisfaction of employees (Dulebohn, 2016). Transformational style not increases the job satisfaction but commitment of employees increases the job satisfaction, ultimately the performance of school teachers increases (Selesho, 2014). Jaroslav concluded in his work that styles like transformational, visionary and charismatic have a positive impact on organization performance (Jaroslav).

In 2010, Tales classified the transformational leadership into five styles(Tan Yushuang, 2013).

  • Idealized Influence (Attributed)

Leaders have a charismatic personality. The way he speaks, act, his personality make the employees to respect him. All followers admire their leader (Adi, 2013).

  • Idealized Influence(Behavioral)

Leader is the role model for employees. Their followers get inspired from the leader charisma. Leader understands the situation or has the determination to complete the tasks or drills all these attributes to his followers (Adi, 2013).

  • Inspirational Motivation

In Inspirational Motivation leader have the capability to motivate or inspire his subordinates. Leader gives challenging task to his employees and motivates them continuously by giving clear vision about tasks(Adi, 2013). In this style leader clearly define the role of every employee so every employee plays its part to achieve the goal or mission. They make the employees to consider themselves the important part of organization or create a strong bond between employees(Yudhawati, 2016).

  • Intellectual Simulation

Linjuan Rita Men described in his work that Intellectual Simulation leader stimulates the employees and challenge them for creative thinking, to accept risks and for participation(Men, 2010). Intellectual Simulation makes the employees to think in a new way or bring innovation or creativity in old ways(Tan Yushuang, 2013). In it supervisor train the subordinates to think creativity or bring change in their beliefs and values, solve problems by themselves. They create the environment where employees share knowledge with each other or do not get the environmental changes on its nerves(Yudhawati, 2016). According to researcher in transformational leadership style intellectual simulation predicts job satisfaction (Jaroslav).

  • Individual Consideration

In the process of training, teaching, guidance or ideas sharing there is a strong relationship built between employer and employee (Abd Rahman Ahmad, 2013). In it leader take care of needs of its employees, praise his followers in front of people to give recognition to followers, increase the confidence of its followers by giving him special note of congratulations, praise the individual effort of employees, or assign the equal distribution of work load. These all things increase the motivation of followers or ultimately they show high performance (Yudhawati, 2016). Linjuan Rita Men described in his work that leader provide individualized consideration means that supervisor give lot of respect to employees and take care of their needs and feelings (Men, 2010).

  • 2.1.4 Transactional Leadership

This leadership style is adopted when the organization is stable. Researcher gave definition of transactional leadership that through this style leader instill self-interest to employees through the exchange of rewards and punishment (Mohd Nazir Mohd Adi1, 2013). In 2003, researcher described this style that it focuses on the transaction between employee and employer. Its characteristics include Contingent reward and management by exception (Anyango, 2015). To maintain the control in organization transactional leader uses his power and authority and make policies. Leader motivates subordinates through exchange process. If employee show high performance then they give them some reward (Men, 2010). While at the same time transactional leader give punishment to workforce if they don’t fulfill their expectations or don’t complete the tasks on time (Men, 2010).

In 2010, Tale classified transactional leadership style further into three branches.

  1. Contingent Reward

Leader gives reward to employees on completion of assigned tasks (Abd Rahman Ahmad, 2013). Podsakoff and Bass in 1990 did research or explained term contingent reward. According to it leader expect good performance from the employee when employee show high performance or complete their tasks efficiently, in exchange of this supervisor provide the employee with some contingent reward. Reward that leader can give to his subordinates may be tangible like (leader can give some increments, bonuses to employees) or may be intangible like (leader can give recognition to employees) (Men, 2010). When goal of organization is achieve leader gives the promised reward to subordinate on his performance (Anyango, 2015).

  1. Management by exception

In this style leader monitor the mistakes or errors of follower continuously while completing their tasks or take the corrective action promptly if any issue arises(Abd Rahman Ahmad, 2013).

  • Management by exception Passive

In it leader allow the follower to solve problem by critically thinking. Once the mistake happen then leader play its part or apply corrective actions to resolve the problem/ issue. This style is not advisable (Abd Rahman Ahmad, 2013). Leader makes some standards if employees deviate from them, leader take corrective actions so that the organization goal can be achieved on time (Anyango, 2015).

Impact on performance: Through transactional leadership performance of employees increases because leader give fairly the reward or punishment to employees on their performance (Abd Rahman Ahmad, 2013). MenLinjuan Rita in his study found out that transactional leadership is just like the base of transformational leadership style. It contributes to boosting the performance of workforce (Men, 2010). Transactional leader can positively or negatively affect the performance of employees. Positive effect is when employees assess this style positive or negative effect is when employee considers that leader is not honest with their statement or previously not awarded them with some reward on good performance (Anyango, 2015).

  • 2.1.5 Authoritative Leadership

Autocratic leader is the one who have the power of decision making; he takes decisions without consulting with their subordinates and relies on his own power. Leader doesn’t do any communication, discussion with workforce or take decision. Such supervisor follows the classis leadership style. They believe on this statement that “do what I say”. He doesn’t share the vision with follower; don’t motivate the employees beyond coercion. There is no innovation and creativity in this leadership style(Anyango, 2015). Researcher did study in this style and found out that this style is suitable in emergency situations. This type of leader ship is style remains best for short term goals. This style is also suitable when spontaneously problem arises or requires quick solution(Anwar S. , 2015).Authoritative leader is the one who take decisions by himself or want from the staff to act upon it obediently without any argument. He makes the plan, policies and procedures without the consultation of group. By keeping in view the future objective he gives orders without any explanation. Such leader don’t become the part of the team but just provide the guidance or guidelines to subordinates. Leader having authoritative leadership style have traits like; centralized decision making power, focus more on maintaining discipline, others can’t question his decision, use team for the benefit of his promotion (Haider, 2015).

Impact on performance: Some times the performance of organization can go down because of this leadership style because they force the workforce to follow the same process or strategies that once they made or don’t consider that situation now is different(Anyango, 2015). Iqbal in his research found out that in autocratic leadership style though workforce doesn’t have the power to make decisions. Leaders don’t consult with staff before taking decisions this thing make the employees to feel inferior in their jobs so the performance of staff may go poor (Anwar S. , 2015).

  • 2.1.6 Laissez-Faire Leadership

This style is quite opposite to transformational or transactional leadership style(Hassan B. , 2014). In this style, though leader is responsible for accountability but leader don’t involve him much in decision making or gives authority to his employees. Leader doesn’t put any struggle to motivate workforce and don’t consider their needs(Hassan B. , 2014). Laissez faire style is ineffective because leader having laissez faire style don’t make decisions, don’t give any reward or punishment to subordinates(Kehinde, 2014). In 2007, Omolayo found out that leader don’t interfere the employees by defining any principles or rules but employees here have all freedom to complete the tasks by their own way. Laissez faire is the style in which leader adopt the principal of no interference or give free hand to his subordinates to take any actions. This style remains best for organizations where there is a centralized structure and people there are motivated by themselves or share resources across different groups. Advantage of this style is that employees come up with best decisions if they responsible towards their duties. In 2003, researcher found out its advantage that in it as employees don’t have any dominant personality, guidelines and guidance they sometimes make wrong decisions due to which performance of organization get effected. One employee tries to become dominant on other while taking decisions due to which instead of cooperation, competition factor come in between employees due to which company decisions become irrelevant or useless(Jalagat, 2016). This style is just like the absence of leadership on employees To understand the relationship between laissez faire style and employee performance it is also important to understand the other variables like job involvement, commitment and satisfaction(Kehinde, 2014). Supervisor having laissez-faire style creates the family type environment between leader and employees(Anyango, 2015).

Impact on performance:This leadership style is ineffective because leader don’t give any positive or negative feedback to workforce, don’t do much interaction with employees thus the performance of organization goes down due to this leadership style because in todays competitive environment manager have to be effective or not to leave the situation on chance(Kehinde, 2014). Laissez faire leader give fredom to employees in decision making and making their own policies. Sometimes employees don’t understand the situation completely or show poor performance(Anyango, 2015).

  • 2.1.7 Participative Leadership Style

Barnet in his research concluded that participative leadership style is linked to McGregor Theory Y. Theory y shows that employees are self-motivated, creative or have a sense of responsibility regarding his duty. Supervisor doesn’t act like a boss or don’t show any judgmental behavior but show coordination or help the employees to increase their job performance. Participative leader promotes the participation of subordinates. According to BusinessDictionary.com, participative leader is one which set goals for his followers, solves their issues, and treats all employees as team. Besides this leader doesn’t allow his followers to take decisions by themselves instead he has the authority of all decisions. In participative leadership style leader develop all strategies for followers or describe all procedures or processes through which goals can be achieved. In this style leader don’t make any orders but act as a facilitator (Wafula). This style promotes the individual growth of the employee. Leader involves all staff members while doing any planning. One of the positive point of participative style is that the employees have a freedom to express their ideas and freedom to make decisions. Though final decisions is of supervisor but supervisor don’t take any decision regarding project without the consultation of employees. Supervisor believes that employees are the one who are actually facing the problems so they also have better ideas by participation what should be the solution. Through this way employees get a belief on their capabilities and capacities that they are a important part of organization or management believes in them, Thus they show motivation in their work or performance of employees increase this way. This leadership style is basically the consultative approach (Dr. Van S. Dalluay, 2016). Democratic leaders make decisions after a group discussion of employees. The advantage of this this style is that it builds the trust of employees, cooperation among the employees, or increases the motivation, satisfaction, or employee performance of employees. While it the same time disadvantage of this style is that it takes more time in final decision making because at the end supervisor get wide range of ideas and opinions, so to reach at the final decision gets difficult (Jalagat, 2016).

Wamalwa Philip Wafula did a research on participative leadership style or concluded in his research that school teachers adopt nine participative leadership characteristics to increase the performance of employees which are leader facilitator, centralized decision making, individual growth, team work spirit, team work, good relationship between employer or employee and control on temperament (Wafula). Dr. Revenio C. Jalagat, concluded in his research that in Philippines in small scale businesses mostly leaders adopt the participative leadership style. They did research and found out this due to this leadership style performance of employees in terms of productivity is very well (Dr. Van S. Dalluay, 2016). Participative leadership style encourages the employees to increase their potentials by participation in decision making (Jamal, 2012).

  • 2.1.8 Employee Performance

Employee performance has been researched many times sometimes as dependent or sometimes as independent variable (Banjo, 2014). In order to survive in a highly competitive environment, organizations pay full attention towards the job performance of their employees. Employee performance is very crucial construct in determining the success/ failure of an organization. Performance is the act of carrying out the assigned task or activities. Employee performance is measured how employee complete their tasks effectively or efficiently. Previously many researchers did work on job performance. Researcher defined that job performance is a variable that can be observed directly. He explained that this is a multidimensional variable that show the employee behavior in executing the organizational role. By seeing the individual behavior one can guess about its job performance. Past studies shows that performance of employee is always dynamic it keeps on changing (A, 2014).

Impact of leadership style on performance of employees: Previous studies tried to find out the relationship between leadership style and employee performance. Researcher introduced the new concept that ROI is not only measured through the return of investment but it also include the return on individual, return on individual can be measured that how leadership style effect employee performance or through this way how productivity or efficiency of employees increased (Dr. Revenio C. Jalagat, 2016). Similarly researcher concluded that if employees are satisfied by the leadership style adopted by the supervisor, then they show high performance in their work (Dr. Van S. Dalluay, 2016). Authoritative leadership style positively affect the employee performance (Hui Wang, 2012).

Due to leadership style work commitment of followers increases, they show involvement in their job, thus committed employees don’t think to quit the job, thus they show motivation or  advance level performance in their assigned tasks (Naveed, 2011). Leadership not always have a positive result on employee performance sometimes it also show negative consequences on employee performance (Dr. Van S. Dalluay, 2016). Good leaders enhance the performance of their followers and turn the deficiencies of their followers into their plus point. When employees become satisfy with their work they try to help their colleagues or give their extra time to fulfill the organization objective (Dr. Revenio C. Jalagat, 2016). Leader who has the effective leadership style not only increases the individual performance of followers but also increases the organizational performance (Lussier, 2013). Douglas in his study defined that there is a link between leader expectation and employee performance. He concluded that if leader expectations are high then productivity and performance of employees will also be high.

Researcher concluded in his research that performance of employees depend on the job satisfaction. He concluded that if the job satisfaction is high then performance also increases (Hassan H. M., 2015).

Conclusion: Previously lot of research has done on leadership styles. On transformational or participative leadership they mostly fund its positive impact on performance of employees. Some researchers found positive or some found transactional leadership has a negative impact on performance of employees. While previously researches suggest the some-where authoritative leadership also has a positive effect on employee performance because some employees always need orders or don’t want to take authority in their hands. While laissez-faire leadership always has a negative consequences on employee performance. Now researcher wants to check out the influence of leadership styles in manufacturing and service organizations.

2.2 Theories of Leadership

To face the rapidly changing environment, all manufacturing and service organizations hire some leaders who adopt some leadership styles, these styles depends on what kind of work organizations perform or how organizations operate. To explain these leadership styles, there are different theories or theoretical work.

2.2.1 Traits and Behavioral Theory

  • 1-Trait Theory

Trait perspective was defined in 1950. It is one of the earliest theories which states that great leaders by birth have distinct personality attributes. These attributes or traits make them different from their followers. Researcher in his study found out the different traits of good leader and makes a list of them. He found out that a leader have to face different situations. So the good leader molds himself according to the situation or don’t take the situation on its nerves(Anyango, 2015). According to trait theory leader are born with good traits or by birth have leadership qualities. Leader discovers qualities in him and polishes them and become a great leader in future. Previously research done on this theory states that person having good traits and qualities in him doesn’t mean that he will be successful in future. Sometimes their traits don’t come fit in some situations. (CMI, 2014).

  • 2- Behavior theory

This theory describes the relationship between people and his performance. It also shows the difference between the behavior of successful and unsuccessful leader, how successful and unsuccessful leader makes decisions. Researcher concluded that this theory can be learned. Manger believes on behavioral theory guides the people how they can complete their tasks (CMI, 2014). This theory states that the behavior of leader makes them different from the common people. This theory focuses on the action of supervisor rather than their internal qualities or traits. This theory does not believe on it that leaders are from birth, it believes that a person can become a great leader through observing or learning (Anyango, 2015).

Researcher in his work concluded that it becomes very difficult for the leader to be effective in every situation with his traits, because every situation demands different traits of leader. So this result destroyed the trait theory and put attention of researchers towards situational and behavioral theories (Anyango, 2015).

2.2.2 Situational and Contingency Theory

In contingency theory effectiveness of leader is determined how well the personal characteristics of leader fit with the situation. Assumption in contingency theory is that situational factors of environment moderate the relationship between leadership style and organizational performance. So depending upon leadership style, results cannot be predicted until the situational factors of environment are known (Anyango, 2015). Situational leadership theory covers three leadership models; co-worker theory, path-goal theory and situational leadership theory. From these three models no one come fit into all situations. Success of organization depends on what leadership style leader adopt based on situation and capabilities of leader or subordinates as well(Anyango, 2015).

2.2.3 Transformational and Transactional Theory

In past a lot of work of researchers revolves around the transformational and transactional theory of leadership. Transactional theories on good performance of employee award them with some reward or on bad performance award them with punishment. Transactional leader meet the needs of employees through the exchange process (Anyango, 2015).

While transformational theories focus on the understanding between leaders and subordinates. Transformational leader motivate workforce to rise above the organization goals. Bass defined the four types of leadership style in his research; charismatic personality of leader, individualized support, inspirational motivation, and intellectual stimulation (Anyango, 2015).

2.2.4 Leadership Continuum

Fiedler leadership contingency model theory states that performance of employees increases if the leader handles the situation beautifully by utilizing his capabilities, styles and behavior. According to this theory leader has to adopt the style which boosts the performance of employees immediately. A good leader handles the difficult situation easily by providing guidance, sharing knowledge and information with staff and develops the feelings of responsibility in staff so they show the better performance

2.2.5 Leadership style and their impact on performance

Researcher in his work found out that autocratic, participative and democratic leadership style affect the performance of employees (Anwar S. , 2015). Myron Rush in his work found out that participative leadership style has a positive effect on performance of workforce because the employees have the power to influence decisions. This brings confidence in them and they show high performance. While in authoritative leadership style though workforce does not have the power to make decisions. Leaders don’t consult with staff before taking decisions this thing makes the employees to feel inferior in their jobs (Iqbal, 2015). Researcher concluded that positive relationship exists between transformational leadership style and employee performance (Sougui & Orozi, 2015).

2.3 Research Framework

To give importance to different leadership styles in organization, different researchers gave different definitions. Leadership is the exchange of power, authority and respect between supervisor and employees. Leader through his style influences workforce, through his knowledge gives training and education to employees. In Ohio State University study researcher defined two types of leadership behavior, one is task oriented while other is relationship oriented (Euwema, 2007). Leadership style is the combination of different behaviors and attitudes of leaders (Majauskaite, 2015). Leadership is the ability to influence workforce to complete tasks on time (Ejere1, 2012). Organizational effectiveness is influenced by the leadership style and employee performance (Yaghoubipoor, 2013).In this study researcher selected the five leadership styles and attempted to find that which style increases the employee performance in manufacturing and service organizations.

Leadership theory suggests a positive relationship between transformational, transactional and participative leadership style while shows the negative relationship of laissez faire, authoritative leadership style with employee performance. Past researches showed that transformational leadership have a greater effect on employee performance than transactional leadership style. Due to absence of leadership in laissez faire leadership style, performance of employees is not so good. Participative leadership style brings job satisfaction in employees. Researcher used the Multifactor Leadership Questionnaire (MLQ 5X short) to determine the leadership style (Alshammari & Farhan, 2014). This questionnaire includes questions regarding the leadership style of supervisor or its impact on performance of employees. Researcher selected the variables by literature review and by using the data analysis techniques found the effect of leadership styles on employee performance. In previous studies researchers found out that if employees are not motivated or satisfied then they don’t show good performance.

Figure 2.1: Framework of Leadership style effect on performance of employees

2.4 Hypothesis Statement

  • H1: Transformational leadership positively effects employee performance in manufacturing and service organization
  • Ho: Transformational leadership negatively effects employee performance in manufacturing and service organization
  • H2: Laissez faire leadership positively effects employee performance in manufacturing and service organization
  • Ho: Laissez faire leadership negatively effects employee performance in manufacturing and service organization
  • H3: Transactional leadership positively effects employee performance in manufacturing and service organization
  • Ho: Transactional leadership negatively effects employee performance in manufacturing and service organization
  • H4: Authoritative leadership positively effects employee performance in manufacturing and service organization
  • Ho: Authoritative leadership negatively effects employee performance in manufacturing and service organization
  • H5: Participative leadership positively effects employee performance in manufacturing and service organization
  • Ho: Participative leadership negatively effects employee performance in manufacturing and service organization

3.0 Introduction

In this chapter researcher covered the methodology through which survey was conducted. This chapter describes the detail of all methods and techniques through which primary data was collected that was required for this study. In this chapter researcher described the sample size of this study or gave description through which method researcher collected and analyzed the data. Chapter also covers the areas like: Generally research, Research Design, Research Instrument, Sampling and Data Analysis Techniques.

3.1 Generally Research

Research is a creative work. In it researcher collects information on any topic, solve problems step by step, analyze them, develops new laws or establish new theories. There are different types of research.

  • 3.1.1 Applied research: In it researchers draw the conclusion and immediately apply this to make policies and laws. In it researcher solve the practical problems. In every day we face many issues applied research use as a solution to all issues.
  • 3.1.2 Descriptive research: This research addresses the characteristics of population. It answers the questions like; what the problem is, when the problem arises, who and where the problem is. The other name of descriptive research is statistical research. This research shows the complete picture of any situation. It describes the information that will be on the background of any social event.
  • 3.1.3 Explanatory research: In this research researcher tries to give reasons to the problems through explanation. No report is made on it. It gives the explanation to any problem or events.
  • 3.1.4 Exploratory research: This is the simple kind of research. In it researcher does not make any questionnaire. Researcher uses this type of research when the problem is not clear to the researcher. Results drawn from it may not be so much helpful but can give a clue for a given problem.
  • 3.1.5 Basic research: In this research, researcher draws the results for the addition in the existing knowledge. Basic research is done just to do addition in the existing information. It is done just to resolve the curiosity and to increase the knowledge. The result of this research can be used in future. In this study researcher used the basic research or elaborate more. This result may be used by the organizations in future for training of leaders.

3.2 Research Design

Research design basically tells us about the two methods. One is Qualitative method and other is Quantitative method.

3.2.1 Qualitative Method

Its purpose is to explore the social world. It deals with the phenomena that we cannot solve mathematically like beliefs and symbols etc. In it researcher does not use any type of questionnaire. Instead he may conduct the interview, do the observational study, it can focused group or participative study.

3.2.2 Quantitative Method

Quantitative method can be described as the method which collects data through experiments or may be through survey. Researcher converts the data into numerical form and draws conclusion from it. Researcher described that quantitative design uses the questionnaire and survey technique and this technique reveals that sample is the representative of population (Alshammari, 2014). Burns in 2009 described that quantitative research is often done in field settings.

For this study the research methodology that was used by the researcher was a quantitative method. In this study quantitative method was best for the description of the variables and for the examination of any cause and effect between them. This methodology exceptionally described the impact of leadership style on employee performance.

To see the connection between variables quantitative method was used. This research was quantitative because in it researcher did the survey by distributing the questionnaire. Researcher used the primary data collection method instead of secondary and collected the data herself. For primary data collection, researcher used the survey technique because it is the most common method of generating primary data.

3.2.3 Target Population

Target population for this study was manufacturing and service organizations.

3.2.4 Unit of Observation

Unit of Observation in this study were employees who were headed or supervised by any leader.

3.2.5 Elements of the Population

Researcher defined the elements in the population that were all the employees in manufacturing and service organizations who were affected by any leadership style of their supervisor.

In each organization, for data collection, researcher distributed a survey questionnaire. Researcher contacted the respondents through online email or through personally visiting the manufacturing or service organizations. By visiting the organizations personally, researcher used the simple random sampling technique for the selection of respondents. Through this researcher ensured that the respondents filled the questionnaire by themselves or by reading the statements. After distributing the questionnaire the researcher kept in mind the convenience of the respondents and didn’t put any pressure on them to fill the questionnaire immediately. This design was quantitative design and was allowed for descriptive analysis. The researcher preferred the quantitative method over qualitative method because researcher wants to test the theory rather than just building a theory (Orozi, 2015).

3.3 Sampling

Sampling is the process of selecting the sample from the population. The process of selecting the elements like employees in the manufacturing and service organization is the sampling. Process of selecting the elements may be different for each sample.

3.3.1 Types of Sampling

3.3.1.1 Non-Probability Sampling
  • Convenience Sampling: In it researcher goes to the target place or whoever is conveniently available to him, go to him or take the interview. It is also called the accidental sampling. Sometimes the individual may not be the representation of population.
  • Purposive Sampling: In it researcher makes the eligibility criteria list. In it selection of individual depends on the researcher which he feels on the base of judgment that will be suitable for the research.
  • Quota Sampling: You assign a quota to every group. Researcher picks the fix number of individuals from each group.
3.3.1.2 Probability Sampling

In this technique every element in the population has a known non-zero probability of selection. The sampling technique that the researcher used for this study was a probability sampling. All elements that were employees in the sampling frame have equal chances of inclusion in the sample. For the selection of elements researcher was unbiased. In every organization for every employee, there were the equal chances of selection of each respondent.

In probability sampling there come the various types.

  • Systematic Random Sample: This is just like the short cut to simple random sampling. Here table of random numbers don’t used. In it researcher selects the every nth case from a list of population. It is also conducted very easily.
  • Stratified Random Sample: If the population is heterogeneous then researcher uses the stratified random sampling. Researcher divides the population into groups on the base of some homogeneity. Division of group may be on the base of age, income level and education level etc.
  • Simple Random Sample: Random sample is one in which the every element has the equal chances of selection. The advantage of simple random sampling is that can be conducted easily.

Researcher used the Simple Random Sample technique. It is not a multistage or complex technique. From the sixteen manufacturing and service organizations, researcher just randomly distributed the questionnaire among employees who were available to the researcher. In this study every employee who was working under some leader has the equal chances of participation in the survey. For this technique, researcher assumed that there is a homogenous population; all employees have the similar characteristics that were influenced by leadership style. Through leadership style all employees show the same performance. Researcher developed a sampling frame and decided the sample size. From each organization researcher selected almost 5-10 employees.

3.4 Research Instrument

For demographic information, a section was made in the questionnaire for the collection of background information of employees. The purpose of this section was to collect the general information of respondents like; Gender, age, qualification, job position, work experience etc.

For data collection, researcher used the MLQ 5X- Short instrument to find out the leadership style effect on employee performance(Alshammari & Farhan, 2014).  In 2014, Farhan Alshammari did research on Nursing Leadership in the Ministry of Health Hospitals of Saudi Arabia or also used the MLQ 5X- Short questionnaire. This instrument was also used for studies in Middle East, in Saudi Arabia. (Alshammari, 2014). The MLQ was used to collect data for the predictor variables of transformational, transactional, autocratic, laissez-faire and participative leadership styles and to predict the outcome variable employee performance. Previously for leadership measurement Bass and Avolio Multifactor Leadership Questionnaire(MLQ) was used. For this study, researcher used MLQ 5x-short instrument. The questionnaire is classified into three categories transformational, transactional and laissez-faire leadership style (Alshammari, 2014). This instrument measures their impact on employee performance and measures the each dimension associated with these styles. To check the result of this instrument, standardized survey questionnaire were distributed. Firstly in 1985, MLQ was developed by Bass, it passed through various modifications and reviews concerning its usage. In 1995, a new version came out by making it more comprehensive which is known as MLQ 5X-Short. Researcher used this version. It consisted of 45 items which ask the attitude or behavior of leadership style of leaders towards their subordinates and rated on a Likert scale. For this study researcher used the 28-items questionnaire which asked the selected respondents to give their responses on a 5-point Likert scale, from 1 (Strongly Disagree) to 5 (Strongly agree).

Authoritative leadership style was measured by 4-items questionnaire, by using scale of Avolio and Bass. In it respondents also recorded their responses on a 5-point Likert scale, from 1 (Strongly Disagree) to 5 (Strongly agree) (Awino, 2015). Similarly, participative leadership style was measured by 10-items questionnaire. In it respondents also recorded their responses on a 5-point Likert scale, from 1 (Strongly Disagree) to 5 (Strongly agree) (Ragma, 2014). For the measurement of performance of employee’s researcher used the 4-items questionnaire, scale of Yousef developed in year 2000 (Awino, 2015).

3.5 Data Analysis Techniques

After the collection of data from sixteen organizations, researcher used the software SPSS 16.0 for analysis of data. Researcher entered values into SPSS. Correctness of the entry of data into SPSS was monitored continuously. For data analysis descriptive and inferential statistical methods/techniques were used. Inferential statistics show the relationship between dependent and independent variables and describe the cause and effect relationship between two variables. Most of the inferential statistics come from the General Linear Model which includes the t-test, Analysis of Variance (ANOVA), Analysis of Covariance (ANCOVA) and regression analysis etc.In this study researcher applied the various test like reliability, normality, Pearson’s correlation and Multiple regression Analysis. Descriptive technique give us the graphical representation of data that we collected. While in inferential statistics technique researcher used the Pearson’s correlation and multiple regression analysis to test the leadership style effect on employee performance (Awino, 2015). In this study researcher used the inferential statistics technique when there was a complete list of employees randomly drawn from the manufacturing and service organizations. Pearson correlation used to check the relationship between independent and dependent variables. Multiple regression used when there are more than one independent variables and only one dependent variable. Here this test was used to check the effect of five leadership styles on one dependent variable employee performance.

4.1 Introduction

This chapter includes the different tests and interpretation of their results. This chapter consists of following sections. Section 4.2 measures the reliability of the instrument, Section 4.3 measures the normality of the data, Section 4.4 presents the numerical and graphical presentation of descriptive statistics, Section 4.5 consists of correlation analysis while Section 4.6 consists of regression analysis and interpretation.

4.2 Reliability of the instrument

In this study researcher used the questionnaire of Bass and Avolio (Multifactor Leadership Questionnaire (MLQ 5X- Short instrument)) consisting of 28 items on likert scale to find the leadership styles effect on employee performance. For participative leadership styles researcher used the already made questionnaire of Ragma that consists of 10 items on likert scale (Ragma, 2014). For employee performance researcher used the already made questionnaire of Yousef (2000) consisting of 4 items. Researcher applied the reliability test to check the reliability of the whole instrument. Reliability basically measures the consistency in results. Table 4.1 shows the results of reliability statistics. Cronbach’s alpha of the whole instrument came out 0.831. Researcher compared this value with conventional cronbach value which is 0.7 (Gliem & R., 2003). Cronbach 0.831 of the instrument is greater than the 0.7 which shows that the instrument is reliable and has the internal consistency and it measures the employee performance for which it was designed. This shows that the instrument that researcher used was consistent or helped the researcher in accessing the goodness of the model.

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Table 4.1 Reliability Statistics

4.3 Normality

4.3.1 Transformational Leadership

Table 4.2 shows the test of normality. Shapiro-Wilk sigma value is 0.114, so p < 0.05 which means that data is normal and there is normality in the data.

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Table 4.2 Tests of Normality of Transformation Leadership

Graph 4.1 shows the Normal Q-Q plot of transformational leadership. Researcher did the inspection of the plots of the normal probability. There is a linear curve in the graph 4.1. Observed score is not dispersed and is around the central point. It also presents that score on each variable shows a normal distribution.

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Graph 4.1: Normal Q-Q plot of Transformational Leadership

4.3.2 Transactional Leadership

Table 4.3 shows the test of normality. Shapiro-Wilk sigma value is 0.287, so p < 0.05 which means that data is normal and there is normality in the data.

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Table 4.3 Tests of Normality of Transactional Leadership

Graph 4.2 shows the Normal Q-Q plot of transactional leadership. Researcher did the inspection of the plots of the normal probability. There is a linear curve in the graph 4.2. Observed score is not dispersed and is around the central point. It also presents that score on each variable shows a normal distribution.

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Graph 4.2: Normal Q-Q plot of Transactional Leadership

4.3.3 Authoritative Leadership

Table 4.4 shows the test of normality. Shapiro-Wilk sigma value is 0.001, so p < 0.05 which means that data is normal and there is normality in the data.

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Table 4.4 Tests of Normality of authoritative Leadership

Graph 4.3 shows the Normal Q-Q plot of authoritative leadership. Researcher did the inspection of the plots of the normal probability. There is a linear curve in the graph 4.3. Observed score is not dispersed and is around the central point. It also presents that score on each variable shows a normal distribution.

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Graph 4.3: Normal Q-Q plot of Authoritative Leadership

4.3.4 Laissez Faire Leadership

Table 4.5 shows the test of normality. Shapiro-Wilk sigma value is 0.000, so p < 0.05 which means that data is normaland there is normality in the data.

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Table 4.5 Tests of Normality of Laissez-Faire Leadership

Graph 4.4 shows the Normal Q-Q plot of laissez-faire leadership. Researcher did the inspection of the plots of the normal probability. There is a linear curve in the graph 4.4. Observed score is not dispersed and is around the central point. It also presents that score on each variable shows a normal distribution.

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Graph 4.4: Normal Q-Q plot of Laissez-faire Leadership

4.3.5 Participative Leadership

Table 4.6 shows the test of normality. Shapiro-Wilk sigma value is 0.000, so p < 0.05 which means that data is normal and there is normality in the data.

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Table 4.6 Tests of Normality of Participative Leadership

Graph 4.5 shows the Normal Q-Q plot of participative leadership. Researcher did the inspection of the plots of the normal probability. There is a linear curve in the graph 4.5. Observed score is not dispersed and is around the central point. It also presents that score on each variable shows a normal distribution.

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Graph 4.5: Normal Q-Q plot of Participative Leadership

4.3.6 Employee Performance

Table 4.7 shows the test of normality. Shapiro-Wilk sigma value is 0.001, so p < 0.05 which means that data is normal and there is normality in the data.

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Table 4.7 Tests of Normality of Employee Performance

Graph 4.6 shows the Normal Q-Q plot of employee performance. Researcher did the inspection of the plots of the normal probability. There is a linear curve in the graph 4.6. Observed score is not dispersed and is around the central point. It also presents that score on each variable shows a normal distribution.

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Graph 4.6: Normal Q-Q plot of Employee Performance

4.4 Demographic Analysis

Researcher collected data of demographic variables also. In this section researcher analyzed the demographic variables that were age, gender, education, working experience, job position and service years etc.

  • 4.4.1 Distribution of Respondents by Gender

Table 4.8 and graph 4.7 given below shows the distribution of gender of the respondents who took part in the following survey. Table shows that majority of the respondents in the survey were male while females were less. Proportion of males in this sample was 104(69.3%), while proportion of females in the sample was 46(30.7%). This graph shows that proportion of male respondents who participated was double as compared to females.

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Table 4.8 Distribution of Gender

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Graph 4.7: Distribution of Gender

  • 4.4.2 Distribution of Respondents by Age

Table 4.9and graph 4.8 shows the distribution of age of respondents. Table 4.9 shows that majority of the respondents 56(37.3%) were lying within the age of 25-30 years, this was followed by the respondents of the age below 25 years who were 44(29.3%), this was followed by the respondents of the age 31-35 years who were 18(12%), this was followed by the respondents of the age 41-44 years who were 14(9.3%), this was followed by the respondents of the age 36-40 years who were 11(7.3%) and the least respondents of the age 46 and above who participated were 7(4.7%). These gender distributions show that majority of the respondents who participated in study were lying within the age range of 25-30 years.

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Table 4.9 Distribution of Age

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Graph 4.8: Distribution of Age

  • 4.4.3 Distribution of Respondents by Education Level

Table 4.10 and graph 4.9 shows the distribution of education level of respondents. Table shows that majority of the respondents 66(44%) who participated were master degree holders. This was followed by 57(38%) respondents who were bachelor’s degree holders, 19(12.7%) respondents were the diploma holders while 8(5.3%) respondents having the Ph.D degree showed the least representation.

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Table 4.10 Distribution of Education

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Graph: 4.9: Distribution of Education

  • 4.4.4 Distribution of Respondents by Sector

Table 4.11 and graph 4.10 shows the distribution of manufacturing and service organizations. Table shows that 76(50.7%) respondents who participated in study were from manufacturing organizations while 74(49.3%) respondents were from the service organizations. These results represent the equal distribution of respondents from both the manufacturing and service organizations.

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Table 4.11 Distribution of respondents by sector

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Graph 4.10: Distribution of Respondents by Sector

  • 4.4.5 Distribution of Respondents by Job Position

Table 4.12 and graph 4.11 shows the distribution of respondents by job position. Table shows that 86(57.3%) respondents were on the non-managerial positions while 64(42.7%) respondents were on the managerial position. These respondents gave the assessment of their performance based on the leadership style of their leader. These results represent that majority of the respondents were on the non-managerial positions.

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Table 4.12 Distribution of respondents by job position

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Graph 4.11: Distribution of Respondents by Job Position

  • 4.4.6 Distribution of Respondents by Service Years

Table 4.13 and graph 4.12 shows the distribution of respondents by service years in job. Table shows that respondents from 1-2 years’ experience in the same organization were 65(43.3%), this was followed by the respondents 39(26%) who spent 3–5 years in the same organization, this was followed by the respondents 21(12%) who spent 6–10 years in the same organization, this was followed by the respondents 13(8.7%) who spent greater than 15 years in the same organization, this was followed by the respondents 12(8%) who spent 11–15 years in the same organization.

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Table 4.13 Distribution of service years for the current position

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Graph 4.12: Distribution of Respondents by Service Years

Findings

  • 4.4.7 Research objective One: Analysis of Leadership Style

This section describes the results of the different leadership styles. In this study researcher worked on five different leadership styles. These styles included the transformational leadership style, transactional leadership style, authoritative leadership style, laissez-faire leadership style and participative leadership style. Researcher used the descriptive statistics to assess the level of each leadership style. Tables given below tell about the mean and standard deviation of these leadership styles. The result of these tables show that which leadership style supervisor adopt in manufacturing and service organizations. Respondents gave their views about the leadership style of their supervisor on the likert scale 1-Strongly Disagree, 2-Disagree, 3-Neutral, 4- Agree and 5-Strongly Agree.

  • 4.4.8 Descriptive Statistics on Transformational Leadership

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Table 4.14 Descriptive Statistics on Transformational Leadership

Table 4.14 shows the distribution of transformational leadership style. Table results represent that inspirational motivation had the highest mean 11.2800 among all and standard deviation of 2.13667, this was followed by the idealized influence behavioral who had the mean of 11.2533 and standard deviation of 2.15564 , this was followed by the idealized influence attributed having the mean 10.9200 and standard deviation of 2.49703 , this was followed by the intellectual simulation having mean 10.6467and standard deviation 2.35488 and the least  was individual consideration. Its mean 10.0467 was also high and standard deviation was 2.50459. Overall the mean of transformational leadership style was 54.1467 and standard deviation was 8.47372. This style has the highest mean among all leadership styles and mostly practiced by the supervisors in manufacturing and service organizations.

  • 4.4.9 Descriptive Statistics on Transactional Leadership

Table 4.15 shows the descriptive statistics on transactional leadership whether supervisor practice transactional leadership style or not in manufacturing and service organizations. Result statistics shows that Management by exception active (MBE-A) had the highest mean 10.6467 and standard deviation 2.42508. It is followed by contingent reward having mean 10.4267 and standard deviation of 2.47768. While management by exception passive (MBE-P) had the least mean 7.9800 and standard deviation 2.87192. Mean score of overall transactional leadership style was 29.0533 and standard deviation was 4.59177. This style is also practiced by some leaders in manufacturing and service organizations.

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Table 4.15 Descriptive Statistics on Transactional Leadership

  • 4.4.10 Descriptive Statistics on Authoritative Leadership

Table 4.16 shows the mean and standard deviation of the response of the respondents to assess the presence of authoritative leadership style by the supervisors in the organizations.

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Table 4.16 Descriptive Statistics on Authoritative Leadership

The statement that “My supervisor gives orders and clarifies procedures” had the highest mean 3.39 and standard deviation 0.933. After that, the question “My supervisor believes employees need to be supervised closely they are not likely to do their work” had the mean 3.19 and the standard deviation 1.103. It is followed by the statement “As a rule, my supervisor believes that employees must be given rewards or punishments in order to motivate them to achieve organizational objectives” had the mean 3.13 and the standard deviation 1.172. The statement “My supervisor believes that most employees in the general population are lazy” has the lowest mean 2.93 and standard deviation 1.174. Overall mean of authoritative leadership was 12.6400 and standard deviation was 2.74481. These results show that employees in manufacturing and service organizations don’t want from their supervisor that they practice authoritative leadership style on them. Results indicate that this style is less implemented in manufacturing and service organizations.

  • 4.4.11 Descriptive Statistics on Laissez Faire Leadership

Table 4.17 shows the mean and standard deviation of the response of the respondents to assess the presence of laissez-faire leadership style by the supervisors in the organizations.

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Source: (Awino, 2015)

Table 4.17 Descriptive Statistics on Laissez-Faire Leadership

Table 4.17 consists of four statements. The statement “My supervisor avoids getting involved when important issues arise” had the highest mean 2.36 and standard deviation 1.1777. After that the question “My supervisor make delays in responding to urgent questions” had the mean 2.29 and standard deviation 1.144. It is followed by the statement “My supervisor avoids making decisions” had the mean 2.25 and standard deviation 1.183. The statement “My supervisor is absent when needed” had the lowest mean 2.10 and the standard deviation 1.241. Overall mean of Laissez-faire leadership style was 9.0067 and standard deviation was 3.78179. It means that laissez-faire leadership is almost not practiced by the leaders in manufacturing and service organizations.

  • 4.4.12 Descriptive Statistics on Participative Leadership

Table 4.18 shows the mean and standard deviation of the response of the respondents to assess the presence of participative leadership style by the supervisor.

N Minimum Maximum Mean Std. Deviation
My supervisor try to include one or more team members in determining what to do and how to do it. However, my supervisor maintains the final decision making authority. 150 1 5 3.47 1.109
My supervisor ask for ideas and input on upcoming plans and projects. 150 1 5 3.62 1.047
When things go wrong and I need to create a strategy to keep a project or process running on schedule, my supervisor call a meeting to get my team members advice. 150 1 5 3.53 .981
My supervisor wants to create an environment where team members take ownership of the project. My supervisor allow us to participate in the decision making process. 150 1 5 3.61 1.060
My supervisor ask team members for their vision of where they see their work going and then use their vision where appropriate 150 1 5 3.32 1.200
My supervisor allows team members to set priorities with his guidance. 150 1 5 3.51 1.022
When there are differences in role expectations, my supervisor work with team members to resolve the differences. 150 1 5 3.53 1.053
I like to use my leadership power to help team members grow. 150 1 5 3.53 1.235
Team members will exercise self-direction if they are committed to the objectives. 150 1 5 3.48 1.151
Team members know how to use creativity and ingenuity to solve organizational problems. 150 1 5 3.55 1.109
Participative Leadership 150 14.00 47.00 35.1467 6.17463
Valid N (listwise) 150

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Source: (Awino, 2015)

Table 4.18 Descriptive Statistics on Participative Leadership

Table 4.18 shows the statement “My supervisor ask for ideas and input on upcoming plans and projects” had the mean 3.62 and standard deviation 1.047. It was followed by the statement “My supervisor wants to create an environment where team members take ownership of the project. My supervisor allow us to participate in the decision making process” had the mean 3.61 and standard deviation 1.060. It was followed by the statement “Team members know how to use creativity and ingenuity to solve organizational problems” had the mean 3.55 and standard deviation 1.109. It was followed by the statement “When there are differences in role expectations, my supervisor work with team members to resolve the differences” had the mean 3.53 and standard deviation 1.053. It was followed by the statement “I like to use my leadership power to help team members grow” had the mean 3.53 and standard deviation 1.235. It was followed by the statement “When things go wrong and I need to create a strategy to keep a project or process running on schedule, my supervisor call a meeting to get my team members advice” had the mean 3.53 and standard deviation 0.981. It was followed by the statement “My supervisor allows team members to set priorities with his guidance” had the mean 3.51 and standard deviation 1.022. It was followed by the statement “Team members will exercise self-direction if they are committed to the objectives” had the mean 3.48 and standard deviation 1.151. It was followed by the statement “My supervisor try to include one or more team members in determining what to do and how to do it” had the mean 3.47 and standard deviation 1.109. Statement “My supervisor ask team members for their vision of where they see their work going and then use their vision where appropriate” had the lowest mean 3.32 and standard deviation 1.200. Overall mean of participative leadership style was 35.1467 and standard deviation was 6.17463. Result shows that participative leadership is largely practiced by the supervisors in manufacturing and service organization.

Overall Result: Results show that transformational leadership style is mostly exhibited by the leaders in manufacturing and service organizations. It is followed by the participative leadership style and transactional leadership style. Authoritative leadership style is less practiced. However the laissez-faire leadership style is exhibited least in manufacturing and service organizations.

Research Objective Two: Analysis of Employee Performance

  • 4.4.13 Descriptive Statistics on Employee Performance

Employee performance is measured by four constructs. Two statements measure the self-assessment of productivity and quality. While other two statements measure the performance of one with the performance of peers.

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Source:(Awino, 2015)

Table 4.19 Descriptive Statistics on Employee Performance

Table 4.19 shows the results of performance of employees. Statement “How do you rate your productivity on the job” has the highest mean 3.79 and standard deviation 0.838. It was followed by “How do you rate quality of your performance” having mean 3.77 and standard deviation 0.778. It was followed by “How do you evaluate the performance of yourself at your job compared with your peers doing the same kind of work” having mean 3.59 and standard deviation 0.891. It was followed by “How do you evaluate the performance of your peers at their jobs compared with yourself doing the same kind of work” mean 3.49 and standard deviation 0.8333. It shows that productivity has the highest mean. Overall employee performance has the mean of 14.6467 and standard deviation of 2.33484. It shows the highest performance. In the next section, researcher found out that whether employee performance is affected by the leadership styles or not.

4.5 Research Objective Three: To find the Leadership Style Effect on Performance of Employees

4.5.1 Correlation analysis between Leadership Styles and Employee Performance

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Table 4.20 Pearson Correlation

Table 4.20 shows the Pearson correlation results. Transformational leadership style (M=54.1467, SD=8.47372) has a positive correlation with employee performance (M=14.6467, SD=2.33484), r(150) = 0.212 , P < 0.01. Also transformational leadership style (M=54.1467, SD=8.47372) has a positive correlation with quality of performance (M=3.77, SD=0.778), r(150) = 0.185 , p < 0.05. Beside this transformational leadership (M=54.1467, SD=8.47372) also has a  positive correlation with productivity of employees on the job (M=3.79, SD=0.838), r(150) = 0.203, p < 0.05.

Transactional leadership style (M=29.0533, SD=4.59177) has a positive correlation with employee performance (M=14.6467, SD=2.33484), r(150) = 0.190, P < 0.05. Also Transactional leadership style (M=29.0533, SD=4.59177) has a positive but insignificant correlation with quality of performance (M=3.77, SD=0.778), r(150) = 0.065, p > 0.01. Beside this Transactional leadership style (M=29.0533, SD=4.59177) also has a positive but insignificant correlation with productivity of employees on the job (M=3.79, SD=0.838), r(150) = 0.144, p > 0.01. Authoritative leadership style (M=12.6400, SD=2.74481) has a negative or insignificant correlation with employee performance (M=14.6467, SD=2.33484), r(150) = -0.129, P > 0.01. Also Authoritative leadership style (M=12.6400, SD=2.74481) has a negative but significant correlation with quality of performance (M=3.77, SD=0.778), r(150) = -0.161, p < 0.05. Similarly Authoritative leadership style (M=12.6400, SD=2.74481) also has a negative or insignificant correlation with productivity of employees on the job (M=3.79, SD=0.838), r(150) = -0.129, p > 0.01. Laissez-faire leadership style (M= 9.0067, SD=3.78179) has a negative or insignificant correlation with employee performance (M=14.6467, SD=2.33484), r(150) = -0.093, P > 0.01. Also Laissez-faire leadership style (M= 9.0067, SD=3.78179) has a negative or insignificant correlation with quality of performance (M=3.77, SD=0.778), r(150) = -0.011, p > 0.01. Beside this Laissez-faire leadership style (M= 9.0067, SD=3.78179) also has a negative or insignificant correlation with productivity of employees on the job (M=3.79, SD=0.838), r(150) = -0.074, p > 0.01. Participated leadership style (M=35.1467, SD=6.17463) has a positive correlation with employee performance (M=14.6467, SD=2.33484), r(150) = 0.163, P < 0.05. Participated leadership style (M=35.1467, SD=6.17463) has a positive but insignificant correlation with quality of performance (M=3.77, SD=0.778), r(150) = 0.141, p > 0.01. Similarly Participated leadership style (M=35.1467, SD=6.17463) also has a positive but insignificant correlation with productivity of employees on the job (M=3.79, SD=0.838), r(150) = 0.056, p > 0.01.

Overall Result: Transformational leadership style is positively correlated with employee’s performance. Transactional leadership style is to some extent also positively correlated with performance of employees. Authoritative or Laissez-faire leadership styles have negative or insignificant correlation with performance of employees. Participative leadership style also shows positive correlation with performance of employees in manufacturing and service organizations.

4.6 Analysis of Multiple Regression

Researcher applied the multiple regression tests on the data to find out the different leadership styles effect on performance of employees. Results of this test are given below from Table 4.21 to Table 4.23. Table 4.21 shows the Model Summary in which the value of R2is 0.095. It shows that 9.5% variation in the dependent variable is due to the independent variables (Transformational leadership, Transactional leadership, Authoritative leadership, Laissez-faire leadership and Participative leadership) while remaining 90.5% variation is due to the error term. So model is not good fit because leadership style brings 9.5% variations in performance of employees.

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Table 4.21 Model Summary

Table 4.22 shows the results of ANOVA. ANOVA used to check the statistical significance of the model. Table 4.22 shows the value of F-statistics and its Sigma value. The value of F-statistics is 3.010 which mean (p < 0.05). This shows that overall model is significant it can predict the performance of employees from the scores of leadership styles.

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Table 4.22 ANOVA

Table4.23 shows the coefficients of multiple regression model. In standard coefficients column beta value shows that transformational leadership style can positively predict the performance of employees in manufacturing and service organizations because value of standardized coefficients beta= 0.95, (p < 0.01). Transformational leadership shows a positive contribution to increase the employee performance. These results show that if supervisor adopts transformational leadership style on employees in manufacturing and service organizations then the performance of employees increases by 9.5%.

In standard coefficients column beta value shows that transactional leadership style negatively predict the performance of employees in manufacturing and service organizations because value of standardized coefficients beta= 0.076, (p > 0.01).

In standard coefficients column beta value shows that participative leadership style can negatively predict the performance of employees in manufacturing and service organizations because value of standardized coefficients beta= 0.370, (p > 0.01).

In standard coefficients column beta value shows that authoritative leadership style can negatively predict the performance of employees in manufacturing and service organizations because value of standardized coefficients beta= 0.027, (p > 0.01).

In standard coefficients column beta value shows that laissez-faire leadership style can negatively predict the performance of employees in manufacturing and service organizations because value of standardized coefficients beta= 0.499, (p > 0.01).

In Collinearity statistics column value of tolerance ranges from 0.602 – 0.929. Whereas the value of variance inflation factor ranges 1.076 – 1.660. These results show that multi-collinearity does not exist in model because in table 4.23 tolerance value is above 0.10 or variance inflation factor is below 10.0.

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Table 4.23 Coefficients

Graph 4.13 shows that histogram is of bell shaped which means that the data is normal.

EFFECT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE

Graph 4.13: Histogram

4.7 Summary of the Results

By seeing the sigma value in multiple regression table researcher found out that p values are less than 0.05 in transformational leadership so accepted the hypothesis H1 that transformational leadership positively affect the performance of employees. So researcher recommended the leaders to adopt the transformational leadership style. Researcher found that this result is the same as viewed in previous researches.

As p>0.05 so rejected the H2 that transactional leadership have a positive effect on employee performance and accepted the alternative hypothesis that it has a negative effect on employee performance.  This result is also somehow consistent with previous researches.

Researcher rejected the H3 hypothesis and accepted the alternative hypothesis that participative leadership has a negative effect on employee performance and found out its negative effect to the employee performance and productivity.

On the base of p>0.05 researcher accepted the H4 hypothesis that authoritative leadership has a positive effect on employee performance.

Researcher rejected the H5 hypothesis and accepted the alternative hypothesis that participative leadership has a negative effect on employee performance and found out its negative effect to the employee performance and productivity. Researcher concluded this on the base of p>0.05.

On the basis of sigma value researcher concluded that transactional, participative and laissez-faire have a negative effect on performance of employees. While transformational and authoritative leadership has a positive effect on performance of employees.

Previously in Pakistan studies were done only in banking sector. In banks there is the same routine work while in manufacturing and service organizations they have to face new challenges every day. Through this study researcher found that which leadership styles increase the employee performance and productivity in manufacturing and service organizations. This study also contributed to the existing body of knowledge.

CHAPTER 5

CONCLUSION AND FUTURE WORK

The purpose of the research was to find out the different leadership styles effect on employee performance in manufacturing and service organizations. These five leadership styles are transformational, transactional, authoritative, laissez-faire and participative leadership styles. Researcher collected the primary data through survey by distributing questionnaire. Researcher applied the descriptive and inferential statistical techniques for the analysis of the data. To check the relationship and effect of leadership styles on employee performance researcher applied the Pearson’s correlation and multiple regression analysis. This chapter covers the following sections; Section 5.1 conclusion, Section 5.2 gives recommendations, Section 5.3 discusses the limitations of research while the last section of this chapter Section 5.4 presents the future work for this study.

5.1 Conclusion

Researcher concluded that authoritative leadership styles have to be mostly exhibited by the leaders in manufacturing and service organizations who want the best performance and productivity from employees. It is followed by the transformational leadership style. It has a positive correlation with performance of employees.  After that participative leadership style is exhibited because through the employee participation in every discussion, they consider themselves the important part of organization and devote their full efforts for the success of organization. Leaders should avoid the laissez-faire leadership style because employees neither work by themselves but want any strict authority on them who always give them orders.

5.2 Recommendations/ Improvements

  • Organizations always want the best performance from employees. Whereas the supervisors and leaders always want the best performance from their subordinates. This study investigated different leadership styles and concluded which leadership styles will positively affect the employee performance. Through this study leader can understand what leadership qualities employees also want from their supervisors or what behavior they have to show.
  • This study suggests that if supervisor wants to increase the performance and productivity of employees then he should adopt the transformational leadership style. In this style leader always encourages the employees.
  • Leaders can also follow the transactional leadership styles.
  • It recommends that by using the authoritative leadership style performance of organization increases.
  • Supervisor just doesn’t have to focus on employee performance but also give a chance to employees to seek more innovation in work. Sometimes one time failure can bring a huge motivational level in employees which results in achievements.
  • Leaders have to give respect to employees. Sometimes dis-respecting the others can also be the cause of poor performance. So leaders also have to give respect to the feelings of employees. Leader has to build a positive and friendly relationship with subordinates so that they can frankly discuss the challenges or problems.
  • Some leaders show the passive behavior. They wait for the result and then arrange the meetings on poor results. Leader has to show the active behavior or should solve the problems on every step besides waiting for the result.
  • Leader has to give faith to the employees or should trust on his capabilities. This will result in high performance of employees.
  • Organizations can train the leaders before starting any project. How team or leader should have to work in a group collectively. There should not be any boss-employee relationship in any group. All should share information without any fear.
  • Leader has to take feedback from the employees during the project on his behavior. If employees are not satisfied from him then he has to change his behavior.
  • Leader has to involve employees for decision making.

Results of study concluded transformational and authoritative leadership styles shows a positive effect on performance of employees so all leaders have to keep in mind the characteristics of this leadership style and should try to keep it in practice.

5.3 Limitations of research

  • The main limitation during the study was the time constraint. So the researcher took the small sample size (only few manufacturing and service organizations, limited only to Lahore)
  • Researcher only checked the employee performance. It can also be checked that how the culture of organization can affect the employee performance.
  • Researcher can also check out the effect of some more leadership styles on employee performance.

5.4 Future work

Researcher gave the suggestions if future research carried out by taking this thesis as a base concept.

  • Future work can be done on how organization culture can affect the relationship between employee performance and various leadership styles.
  • There are different demographic groups, like gender or age groups. Researcher has to check out how these demographic variables affect the relationship between employee performance and various leadership styles.
  • Instead of leadership styles what could be the other factors that can affect the performance of employees in manufacturing and service organizations.

In manufacturing and service organizations leaders have to keep in mind the needs of subordinates and beside their comfort level try to give respect to the employees. Also have to adopt the transformational and authoritative leadership styles. Collectively all these positive attitudes and efforts will result in high performance in manufacturing and service organizations.

[/sociallocker]

Related Posts

Leave a Comment