Effect of Leadership style on Employee Engagement: The case of Abyssinia Bank Head Office
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Date
2025-09
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Addis Ababa University
Abstract
This study highlighted the findings, conclusions, and recommendations generated by the evidence-based analysis of leadership styles' effect on employee engagement at Abyssinia Bank's Head Office. The study was conducted using an explanatory quantitative research approach, cross-sectional survey design, recruitment of 333 sample size (stage 1), and stratified random sampling for selection of appropriate sample based on employees and departments and levels of the Bank organization to classify workers by gender, age and educational attainment. The demographic analysis showed that Abyssinia Bank has a relatively male workforce with 44.3% of employees in the 35-44 age range; there was an overwhelmingly level of educational attainment as 82.6% of employees had a bachelor's degree or higher. The study focused on three leadership styles: Transactional, Transformational, and Servant leadership styles. The research demonstrated that Servant leadership style followed by transactional leadership as the greatest predictor of employee engagement showing employees that they are important and make sense to the bank organization. In contrast, transformational leadership caused a negative effect on employee engagement Overall employee engagement score was rated positively, but the data indicated major opportunities for improvement across the board, especially concerning employees' commitment to the organizational goals. Significant positive relationships exist between leadership styles and employee engagement, showing the role of leadership practices is important. The regression analysis revealed that leadership style accounted for almost 78.1% of the variation in employee engagement. The study recommended socializing transformational leadership, monitoring outcomes while promoting collaboration, commitment to employee development, managing for multi-collinearity, and conducting regular engagement surveys in order to enhance leadership practices, and improving employee engagement, which together should result in increased employee motivation and commitment at Abyssinia Bank.
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Keywords
Leadership styles, employee engagement, Transactional leadership, Servant leadership, Transformational leadership