EXPLORE LEADERSHIP STYLES AND EMPLOYEE PERFORMANCE

CHAPTER One:          Introduction

1.1 Background of the Study

Leadership has been broadly linked to both organizational and employee performances. It is a crucial aspect of every institution since the decision making is usually bestowed to the leaders. Leadership refers to the relationship in which leaders encourage employees towards achieving specific common objectives (Ciulla, 2004). Several researchers have characterized as setting variants or regarding an exceptional order. The leadership and the employees are tied by the performance levels (Bass et al., 2003). Uninhibited efforts, cautiousness, and effectiveness always direct the organization to the required objectives (Anwar and Haider, 2015).  Leaders contribute to the creation of innovative ideas (Jyoti and Bhau, 2015) by providing and environment. According to Thompson et al., 2006), leadership refers to the ability and quality to influence a group of individuals to achieve the desired goals set by the leader. Leadership exists in all realms of life and is all levels. It is inevitable and needs to be understood. Nonetheless, employee performance has been the primary driver of productivity in any organization.

According to Kim and Beehr (2018), employees tend to be more loyal and motivated to carry out their duties expeditiously when given autonomy by their leaders, enhancing organizational productivity. Employees need to be supported by empathetically. According to Toor and Ofori (2010), psychological capital and employees’ performance are positively correlated. Hannah and Luthans (2008) posited that positive mental states, for example, wellbeing and an individual’s happiness encourages effective leadership in a participatory way, flexibility, and adaptability across several circumstances leading to the attainment of the target goals. Wellbeing at work entails the experience of emotional bursts in response to workplace stimuli and how it can influence individual and organizational related outcomes. (Sudha et al., 2016). This employee performance thus depends on the type of leadership employed by an organization.

Leadership styles have been a new issue, especially in business organizations.  The Total Quality Management (TQM) theory shows the benefit of leadership styles in an organization’s management in motivating the employees towards quality improvement programs (Teoman and Ulengin, 2018). There exist several leadership styles employed in various organizations. The theory regarding leadership styles was brought forth by Burns (1978) and has been given at most attention by researchers in several fields (Wang et al., 2011). It consists of three types of leadership. First, transformational-based leadership encourages their employees to maximize their full potential and to top their ambitions, beneficial to any given organization (Podsakoff et al., 1990). Second is the transactional leadership style, where leaders employ a “give and take” strategy, to encourage their employees by rewarding productive employees (Podsakoff et al., 2006). Lastly, is the laissez-faire leadership style, so-called non-transactional, where leaders disregard their employees. Such leaders avoid decision making, are sluggish in taking actions, and might not available to employees at the time need (Bass and Riggio, 2006). Public and private institutions require transactional or transformational leadership to reform the organization (Bass et al., 2003).

Transformational leaders assist their employees in building their own goals and also have confidence that they will accomplish them. Leaders who operate under a transformational based leadership style expect more from their employees by offering support and encouragement and improving the outcomes (Baig et al., 2019). Leadership style with no involvement, decision-making process, and feedback slackened with minimal rewards to employees to motivate them; so-called laissez-faire-style leadership is not productive. (Wong S., 2016). Participative leadership style has also been linked to having a positive impact on employees’ job performance. Benoliel and Somech (2014) found out that this type of leadership correlates positively with employees’ job performance. Especially those believing in extroversion, agreeability, and conscientiousness.

This study seeks to assess how leadership styles, based Full Range of Leadership (FRL) (Bass and Avolio,1994) model. We specifically considered three leadership styles, namely, transformational, transactional, and laissez-faire, as predictors for employees’ performance in organization ABC, Jubail city. We sort to determine the leadership style of leaders that will enhance subordinate’s performance in ABC organization.

1.2 Statement of the Problem

Employee performance entails handling several responsibilities and duties, meeting deadlines, and efficacy in performing job tasks. However, organizations require an excellent leadership style to foster employees’ performance. Poor performance occurs owing to a lack of efficient leadership style.

Most of the past studies have focused on various aspects of and practices of organizational performance, employee job satisfaction, and turnover across national borders. Leadership styles based on exploratory design leaders and employees’ views have not been deeply explored. Unlike other research studies, this study is exploratory and tries to identifying leadership styles based on employees’ experiences. Individually, we sort to understand how employees’ skills with the leadership styles of your present or past supervisors in the organization concerning how it affects them and their work performance. The study also considered the leader’s perception of their organizational performance.

Additionally, few studies have been conducted in the setting of Saudi Arabia. Idris (2007) showed that administrators in Saudi Arabia face difficulties when executing their mandates in their associations. There is a need to understand the impact of various leadership styles on employee performance in the Saudi Arabian institutions to improve leadership performance

1.3 Research objectives

1. To examine the type of leadership styles portrayed by supervisors of ABC organization
2. To explore the extent to which leaders in Organization ABC practice transactional, transformational, and laissez-faire-based leadership styles.
3. To access the linkage between transactional, transformational, and laissez-faire-based leadership styles and the employees’ performance.
4. To assess the leader’s and employees’ perceptions towards transactional, laissez-faire as well as transformational-based leadership styles.

1.4 Research questions

The following research questions guided this study:

1. What are the leadership styles being portrayed by supervisors in ABC organization?
2. To what extent do leaders in Organization ABC exercise transactional, transformational, and laissez-faire-based leadership styles?
3. Is there a linkage between transactional, transformational, and laissez-faire-based leadership styles and the employees’ performance?
4. How do leaders and employees perceive transactional, laissez-faire, as well as transformational-based leadership styles?

1.5 Significance of the study

First, a few types of research have been done in the setting of Saudi Arabia. Idris (2007) found that administrators in Saudi Arabia face several challenges when executing their mandates in their organizations. There is a need to seek and clarify how leadership styles affect the performance of Saudi Arabian institutions. Few types of research have examined in Saudi institutions on how leadership styles have been practiced. Additionally, few or no studies have examined the impact of such leadership styles on employee performance in Saudi institutions. Poor administration is reciprocally linked with organizational performance.

The research findings can help both the employees and leadership. Leaders will be able to discern how their employees perceive their leadership styles and how they affect the institution’s performance. An understanding of this can be a basis for being pro-active, leading to better outcomes.

1.6 Scope of the Study

Qualitative and quantitative data analysis methods explore how leadership styles are linked to employee performance in organizations. The leadership styles covered in this study are; transformational, transactional, and Laissez-Faire brought forth by Bass and Avolio (1994). The study examined these aspects by seeking views from employees and leaders. This study was centered on Organization ABC. We considered views

1.7 Limitation and Delimitation

The study had some limitation which involved access where getting hold of individuals to was difficult due to availability. Accessing some people and knowing their honest opinions were difficult because of seniority at the workplace. The sample size is small, making it hard to draw meaningful relationships from the data. The research methodology had limitations on the availability of previous research on the topic. Though there was information on the subject, it was not sufficient to shed more light on the issue. The time to gather research materials and compile the analysis of the research in due date is a limitation for the study with regards to longitudinal effect. The longitudinal impact comes into play in such a manner that time available to conduct the research is constrained by the rush to deliver within the due date.

1.8 Theoretical and Conceptual Framework

Lack of commitment for employees, job discontentedness, and higher turnover in institutions necessitates the need for effective leadership styles. There is a need for leaders to ensure that employees are satisfied, motivated. It will make them exert more effort employees to use extra efforts (Asrar-ul-Haq & Kuchinke, 2016). It can be done by adopting leadership styles, which increase employees’ satisfaction and attitude, encourage their efforts, and improve overall performance. An effective leadership style will build a long-term relationship between the employers and the workers. In the long run, growth and set goals will be realized.

The study of leadership styles in the early 1980s and 1990s, for example, by Bass, 1985, 1998, offered a pathway for in-depth research on how leadership styles can impact on institutional performance. Bass and Avolio (1994) brought forth the Full Range of Leadership (FRL) model, which stipulates several leadership styles. These styles are transformational, transactional, and laissez-faire leadership styles.

Transformational leaders are more visionary and motivate their employees to go beyond given expectations (Doucet et al., 2015). According to EaglyA et al., (2012), leaders operating under this style state their future goals and formulate plans to accomplish them. They are always innovative, even under success. They mentor, empower, inspire, and encourage them to maximize their full potential. According to Hung, Nikbin, and Hyun (2015), such leaders assist their employees in meeting organizational goals and mission by working hand in hand with them. According to Asrar-ul-Haq & Kuchinke (2016), transformational leaders’ aspirations go beyond the rewards and exchanges.  Bass (1997) distinguished four attributes of transformational leadership: Idealized influence (trait and behavior), inspirational motivation; intellectual stimulation; and individualized consideration. Idealized influence is a kind of charismatic leadership-based style. Leaders with idealized influence acting as a role model by winning the trust and confidence of their followers (Bass, 1998). They operate under strict ethical and moral values. In attributed idealized influence, distinguishing characteristics of a leader are more crucial. However, the behavioral impact depends on the actions of a leader. In inspirational motivation, leaders tend to be optimistic and set higher standards for their employees. Their enthusiasm and encouragement to their employees lead to the accomplishment of the predefined goals, according to Asrar-ul-Haq & Kuchinke (2016). Intellectual stimulation makes employees realize, conceive, comprehend, and solve their problems with more creativity. Under individual consideration, employees get exceptional attention based on his/her personality and needs.

The transactional leadership style, on the other hand, establishes exchanges with the employees. It entails assigning tasks to employees, rewarding whenever they meet the set objectives, and rectifying them whenever they fail to meet the goals. According to Eagly et al. (2012). Since they are more goal-oriented, they apply both positive and negative aspects to attain the desired goals. Additionally, such leaders do not anticipate their employees to adopt any innovatory approach in doing their tasks (Den Hartog et al., 1997). It is from leadership that exists in two dimensions: contingent reward; and management by exception (active and passive) (Smith et al., 2016). Contingent reward implies that leaders use a reward system and promotion so that the employers can meet the desired goals. In management, by exception, leaders take to rectifying their employees when there are on the wrong or out of bounds. It can be subdivided into active, where leaders anticipate employees’ behavior. Such leaders will always figure out problems before they come in hand. Under management by exception, passive, leaders do not forebode problems. However, they take appropriate measures when issues occur. In as much as the two aspects of leadership styles discussed above are separable, they are both exhibited by effective leaders (Eagly, A. H., et al., 2012).

The third form of leadership style examined in this study is Laissez-Faire. By conjecture, it is distinguished as a failure to be responsible for the management of an institution.

Here, leaders avoid decision making, are sluggish in taking actions, and tend to ward off situations that might lead them into a problem. Additionally, leaders inclined to this style, do not give feedback to their employees (Asrar-ul-Haq & Kuchinke, 2016).  Since no incentives are given to employees, there become discontented and hence unproductive at work.

FRL model has been evaluated in several studies. However, there is mixed reaction to make a clear cut on the best style to applied, more-so between transformational, transactional leadership style, and as well, might be contextual. According to (Asrar-ul-Haq & Kuchinke, 2016), this might be to differences in culture, both from organizational and national perspectives. In light of this, there is a dire need to access the FRL model in Saudi Arabia, individually, in organization ABC. Based on FRL, we deduced the conceptual framework is thus expressed in Figure 1 below.

SOURCE: Adopted from FRL model (Bass & Avolio, 1994)

Figure 1.1: Conceptual Framework

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