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Leadership Styles and Employee Performance: Theories of Motivation

Karina Martinez

South Texas College

Dr. Michele Guajardo

ORG-3311-VF1-Issues in Organization Leadership

October 2, 2022
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Leadership Styles and Employee Performance: Theories of Motivation

Abstract

The current study reviews the literature on leadership styles and how well they foster teamwork

in organizations. This essay attempts explicitly to evaluate the research in the area of work

performance with an emphasis on leadership styles. Various leadership types and approaches

have been examined concerning organizational efficiency, role stresses and ambiguity. By

affecting how well their team members accomplish their jobs, leaders are said to have a

beneficial effect on the effectiveness of the company. The literature study also looks at role

stressors, including role ambiguity, frequently identified as the primary cause of low work

performance and job discontent. Organizations may manage role stresses more effectively if they

understand their nature and the various factors that could lead to them. Additionally, it was

discovered that there was considerable debate in the literature about the connection between

workplace performance and organizational collaboration. Therefore, it is critical to comprehend

the nature of various leadership philosophies and evaluate how they affect the solution of various

corporate issues.
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Introduction

The crucial significance of team efficiency has been acknowledged as the primary goal of

several articles during the past 20 years. The involvement of a leader who can inspire and set the

direction for their team members is necessary for managing organizations and assuring their

performance. It is generally accepted that influential leaders provide their team members with the

freedom and support they need to accomplish the organization's objectives. Organizations

depend on their executives to enable the innovations and changes necessary to sustain a

competitive advantage in a competitive global economy. Effective leadership contributes to

organizational growth. As a result, several theoretical concepts have been offered in the previous

fifty years, claiming to have affected the efficacy of businesses within which they have been

implemented via employee performance (Shah, Mirani, Memon & Bhutto, 2016). Research on

employee performance and the role of leadership within the organization stresses the need to

comprehend the various driving factors that affect organizational growth, including employee

input and human resources. Organizations strive to track their employees' development to

determine their strengths, weaknesses, and overall performance effectively. This research also

sheds light on the significance of leadership on employee performance by defining the

boundaries and elements that position organizational growth on the interdependence of the two

aspects.

Hypotheses for Research

H1: Organizational commitment, job happiness, participation, and organizational citizenship

actions are favourably associated with transactional leadership.

H2: Transformational leadership has a good association with the constructs of organizational

commitment, work satisfaction, job participation, and organizational behaviours.

H3: Non-transactional leadership has a good association with the constructs of organizational

commitment, or satisfaction, job participation, and organizational behavior.

Literature Review

Transformational Leadership

If educational leaders do not put multiculturalism and fairness first, transformational

leadership may be severely constrained. Berkovich (2016) discusses the importance of TL in a

diverse context since it enables various perspectives on recognizing requirements and problems

in different school settings. Nevertheless, as Lewis, Boston, and Peterson (2017) contend, it is

challenging to effectuate change when there is a lack of historical knowledge and

comprehension. It can be challenging to resolve disagreements across teams to start the

transformational leadership approach without understanding others' viewpoints, cultures, and

origins. These students must define the school's shared vision, and cultures must inspire leaders

to act ethically to advance equity.

Transformational leaders are supposed to be in charge of inspiring staff to go above and

beyond the norm. The leader invokes this level of play by attracting followers' particular needs

and ethical principles, generating followers' passion and commitment to the organization's

mission and values, indoctrinating confidence and devotion in followers, conveying personal

respect, intellectually stimulating subordinates; fostering creative thinking; and directing them to

willingly accept higher tasks as well as a mission or sense of direction (Shapira, 2019). Thus, the

leader recognizes the company's future and "pulls, instead of pushes," encouraging individuals to

centre their dedication and efforts on the business and its objectives.

A crucial component of a transformational leadership approach of inspirational

motivation is raising followers' consciousness, directing them toward the goal and vision of the
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company, and inspiring others to comprehend and commit to the vision rather than focusing on

the leader's personality. A leadership with this approach stimulates the workers in the

organizational quest, bringing out the best rather than strangling them (Shah, Mirani, Memon &

Bhutto, 2016). Employees who wish to add value positively and effectively to the organization

may become frustrated if experimentation is prohibited and innovation is hampered. Employers

are encouraged by leaders who have this leadership style by giving them greater freedom to

make decisions independently and the resources to do so.

Transactional Leadership

Transactional leadership was noted by Shah, Mirani, Memon & Bhutto (2016) as a form

of contingent-reward leadership in which leaders and followers engage in constructive dialogue

and receive rewards or are awarded for achieving predetermined goals. These awards could

imply appreciation from the boss for pay raises, incentives, and job success based on merit.

Positive encouragement might be traded for excellent work, merit promotions, improved

performance, and collegiality are all rewarded with cash. Instead, the leaders may concentrate on

mistakes, postpone actions, and delay choices (Shah, Mirani, Memon & Bhutto, 2016). Whereas

transformational leaders inspire subordinates to go above and beyond, transactional leadership is

built on traditional bureaucratic power and legitimacy, with followers receiving valued results if

they operate according to the leader's intentions. The relationship is built on interactions or

implicit contracts between the leader and the follower that clarify roles, responsibilities, and

assignment goals (Kittikunchotiwut, 2019). Thus, transactional leaders concentrate on

completing tasks and compliance, relying on corporate rewards and penalties to influence worker

performance. "The principles of a quid pro quo agreement dominate the contractual exchange,"
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writes Kittikunchotiwut, where the leader specifies work requirements and incentives for

compliance.

Three elements make up transactional leadership: contingent compensation, management

by exception, and management by exception. A transactional leader uses the contingent rewards

plan to communicate performance expectations to followers and recognizes excellent work.

Transactional leaders employ extrinsic rewards to increase followers' motivation and think

contractual agreements are the primary motivators. According to the research, the transactional

approach "retards innovation and might negatively impact employees' job happiness. The

management-by-exception theory describes leaders' actions in effectively identifying departures

from anticipated follower behaviour.

Non-Transactional Leadership

According to popular belief, a leader's capacity to lead depends on various situational

conditions, yet this leadership style is significantly supported by expertise in the approach (Al-

Malki & Juan, 2018). This leadership style has been tested by several writers and described by

them to find its dependability and validity. It focuses on the significance of the interaction

between the leadership style and the needs of different circumstances and personnel. By granting

some degree of administrative independence, the confidence in competent leadership enabled the

capacity (Al-Malki & Juan, 2018). Since the laissez-faire company leader makes little attempt to

encourage others or understand and meet individual needs, experts have found that this

management style is Symptomatic of a lack of leadership; Laissez-faire leadership avoids

making decisions, giving awards, and giving constructive feedback to subordinates.

The phrase "involvement" describes a person's "involvement, contentment, and passion

for work" (Li, Zhang, Zhang & Wei, 2019). The build-up of Shah, Mirani, Memon & Bhutto
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(2016)'s is characterized as familiar participation in terms of working experience. Employee

engagement indicates an emotional connection to others as they follow the team's directives

carefully and thoughtfully. Employee involvement occurs when they know their expectations to

complete their tasks following the resources provided, for reviews and growth per opportunities

and cooperation, and with a sense of having significantly contributed to the organization. From a

review of the facts, this chapter concentrated on leadership and employee participation.

Businesses must realize that competition is critical in the current work environment (Li, Zhang,

Zhang & Wei, 2019). As a result, businesses must endeavour to motivate employees, so they are

motivated to compete and foster an environment of engagement. Regarding leadership style,

transformative leaders are more self-assured and guided toward engagement in culture due to

analyzing this approach. The long-term learning and hypothesis are created based on the

previous theoretical relationship, which is provided below.

Findings

The study examined three hypotheses proposed with the research goal of determining the

influence of the three leadership styles on worker performance against the dimensions of job

satisfaction, organizational commitment, and organizational behaviour. It was established that

the transformational style is the best way for any firm that aspires to achieve its desired purposes

and goals through increased employee performance. Previous scholars have taken similar

perspectives on their findings. Hypothesis 2 was accepted, stating that "there is a greater positive

correlation in both transformative leaders and the constructs of job satisfaction, organizational

commitment, organizational citizenship behaviour, and job involvement." In contrast, hypothesis

1 was dismissed, and the substitute hypothesis was accepted (Salin, Baillien & Notelaers, 2022).
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Laissez-faire leaders show little interest in critical organizational concerns and tend to put off

responding to pressing problems.

Studies show that executives with a laissez-faire attitude pay little attention to task

completion and productivity. One of the core traits of laissez-faire leadership is the avoidance of

participation. This avoidance tendency causes followers to get overly frustrated and feelings of

low self-esteem. Non-transactional leaders do not care much about the behaviours of their

followers or how those activities affect the organization's results; instead, they focus on finding

new followers’ demotivation. Due to the negative traits of the laissez-faire approach, we classify

it as non-leadership and immediately reject it.

Conclusion and Recommendations

Transformational leadership is the most effective leadership style. Previous experts and

academics, as stated below, have likewise maintained this stance, which has been experimentally

proven and is now used in commercial organizations. The study's findings have significant

ramifications for management. The consequence is that "transformational leadership" will

produce effective results in organizations since it encourages people to go above and beyond

regular expectations, draws attention to followers' particular needs and moral beliefs, creates

followers' enthusiasm and dedication to the institution's purpose and objectives, instils pride and

devotion in followers, conveys genuine respect, intellectually encourages subordinates, and

enhances growth. The study shows that hiring managers with solid leadership skills will help

firms increase organizational engagement and performance (Salin, Baillien & Notelaers, 2022).

The best leadership possesses honesty, delegation skills, self-awareness, communication,

gratitude, and learning flexibility. Employee performance will improve in the organization due to

its impact since employee participation improves workers' performance. However, most team
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building, and leadership techniques increase cooperation at work. The entire staff at the

organization will perform better due to employee participation.

References

Al-Malki, M., & Juan, W. (2018). Impact of Laissez-Faire Leadership on Role Ambiguity and

Role Conflict: Implications for Job Performance. INTERNATIONAL JOURNAL OF

INNOVATION AND ECONOMIC DEVELOPMENT, 4(1), 29-43.

doi:10.18775/ijied.1849-7551-7020.2015.41.2003

Li, C., Zhang, Y., Zhang, Y., & Wei, F. (2019). The destructive effect of laissez-faire leadership

on job performance: A social exchange perspective. Academy Of Management

Proceedings, 2019(1), 13491. doi: 10.5465/ambpp.2019.13491abstract

Salin, D., Baillien, E., & Notelaers, G. (2022). High-Performance Work Practices and

Interpersonal Relationships: Laissez-Faire Leadership as a Risk Factor. Frontiers In

Psychology, 13. doi: 10.3389/fpsyg.2022.854118

Shah, S., Mirani, M., Memon, P., & Bhutto, N. (2016). Moderating Role of Performance

Appraisal Politics between Transactional Leadership, Transformational Leadership and

Job Performance: A Proposed Research Framework. Scholars Journal Of Economics,

Business And Management, 3(6), 309–315. doi: 10.21276/sebum.2016.3.6.1

Shapira, R. (2019). High-Moral Trusting Transformational Leaders, Charismatic-

Transformational Leadership, and Charismatic Leadership. SSRN Electronic Journal.

https://doi.org/10.2139/ssrn.3418773

Kittikunchotiwut, P. (2019). Role of transformational leadership and transactional leadership on

organization innovation. Business &Amp; IT, IX(2), 2-17.

https://doi.org/10.14311/bit.2019.02.01