The Effect of Leadership Style on Employee Performance: The Case of Public Service and Human Resource Bureau of Afar Regional State
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Date
2024-10
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Addis Ababa University
Abstract
This study aimed to identify the impact of leadership styles (transformational, transactional, and laissez-faire) on employee performance in the Afar National Regional State Public Service and Human Resource Bureau. A quantitative research approach was employed, with a questionnaire response rate of 89% (127 valid responses). The leadership styles were measured using the Multifactor Leadership Questionnaire developed by Avolio and Bass (2004) and modified to fit the study context. The data was analyzed using SPSS (Version-26), employing both descriptive and inferential statistical techniques. The findings reveal that the transformational leadership style to be the most prevalent, followed by the transactional and laissez-faire leadership styles. The results show a strong correlation between transformational and transactional leadership styles and employee performance, while laissez-faire leadership had a weak correlation. The overall correlation between leadership styles and employee performance was strong, with a coefficient of r=0.717. The regression analysis indicates that 47.5 % of employee performance can be jointly explained by leadership styles. Transformational leadership style was found to be the strongest predictor of employee performance, followed by transactional leadership. In contrast, laissez-faire leadership was found to have an insignificant impact on employee performance. Based on the positive and the higher level of correlation that has been proved to exist between transformational leadership style and employee performance the researcher recommended transformational leadership style to be implemented by all leaders in the studied organization as a default prioritized style. And since the effects of transactional leadership tend to be more short-term and narrow in scope compared to the broader, more sustainable benefits associated with transformational leadership, the researcher recommended to the leaders in the studied organization that they should often employ a combination of both transactional and transformational leadership style when needed. The researcher has also recommended that laissez-faire leadership should generally be avoided in favor of more effective leadership approaches like transformational Leadership.
Keywords: Leadership Styles, Transformational, Transactional, Laissez-faire, Employee Performance