1.1 BACKGROUND OF THE STUDY
In the present business environment, leadership styles have emerged as key to achieving greater organizational success because of their direct effect on employee motivation (Gopal and Chowdhury, 2014). Gouraki (2013) mention that human resources are one of the key components of organizational management, implying that human resource motivation is crucial to achieving set organizational goals and objectives.
According to Gopal and Chowdhury (2014), leadership styles are key factors that create and support high motivation levels among employees. Buble et al. (2014) showed a direct correlation between leadership style and employee motivation by demonstrating that an appropriate leadership style results in the most motivated workforce. Therefore, understanding the most appropriate and ideal leadership style is key to directing, influencing, changing, and controlling the behaviors of employees in the positive direction, a factor that results in a more motivated workforce. In the same vein, Rumasukun et al. (2015) explain that leadership style is directly correlated with employee motivation. According to the authors, leadership style has a direct impact on employees‟ confidence, trust, sense of belonging and involvement levels, factors that are essential in determining the extent to which employees are motivated. However, Rashid and Rashid (2012) note that there exist a significant different in the extent to which employee motivation is achieved in the public and private sectors. In a similar vein, the study by Irum et al. (2012) revealed that motivation levels among public sector employees significantly vary from that of employees in the private sector. Arguably, it can be reasoned that the approach to and leadership style embraced among organisational leaders in the private sector is different from that of organisational leaders in the public sector.
According to Ile, (1999:217) there are some important implications in the concept of leadership, for instance, leadership involves others. In other words, leadership involves followers. The followers may be superiors, or peers, as well as the subordinates by their willingness to follow, accept directions from the leader, group members help define the leader’s status and make the leadership process possible. Thus, leadership demands followership. Leadership involves unequal distribution of power between leaders and group members. This is implied that group members are not powerless; they can and do shape group activities in a number of ways.
Leadership involves ability to use difference forms of power to influence followers’ behaviours in a number of ways. According to Appleby, (1981:117) leadership also involves the acceptance of responsibility for the achievement of the group objectives. Because of this, it is therefore, essential for trust and cooperation from both sides to be in evidence all the time.
“Leaders play essential role in accomplishment of goals and boost employee’s performance by satisfying them with their jobs” (p.55) Leadership is perhaps the most thoroughly investigated organizational variable that has a potential impact on employee performance (Cummings and Schwab, 1973). “It is a vital issue in every organization primarily because the decisions made by the leaders could lead to success or business failure”. Notably, it has been widely accepted that effective organizations require effective leadership and that employee performance together with organizational performance will suffer in direct proportion to the neglect of this, Fiedler and House (1988). Furthermore, it is generally accepted that the effectiveness of any set of people is largely dependent on the quality of its leadership – effective leader behavior facilitates the attainment of the follower’s desires, which then results in effective performance (Ristow, et al., 1999).
According to Albrecht (2011), performance is the extent to which an organization achieves a set of pre-defined targets that are unique to its mission. Leadership style is a key determinant of the success or failure of any organization. Numerous literatures on management mention various leadership styles and frameworks such as autocratic leadership, bureaucratic leadership, charismatic leadership, transactional leadership, and transformational leadership, all of which are based on several different approaches to leadership. Each style of leadership affects organizational performance differently; some helping organizations succeed and others hamper their growth leading to failure.
Whereas many different leadership theories have emerged from the last century, early theories on leadership concentrated on identifying qualities that differentiated between leaders and followers. Subsequent theories on leadership looked at other variables such as situational issues and levels of skill. Over time, a number of theories on leadership and performance have been proposed. Bratton (2007) observes that leadership theory types include two axes: of those which are related to organizational effectiveness and tend to be more prescriptive in orientation, and of those which are primarily analytic and meant to better understand the concept. However, it is not always easy to classify any of the theories as one or the other exclusively. Therefore, this study focuses on the effect of leadership styles on employees’ performance at united bank of Africa, Ota, Ogun state.