Various leadership styles are used in different places in our present modern community. Leadership styles are applied in business organizations, schools, family, and everything that are present in our surroundings. This study therefore, examined the impact of leadership style on employee performance of SMEs in Nigeria. The study employed both quantitative and qualitative research design. Data for the study was collected using structured questionnaire. The purposive sampling technique was used to select 120 staffs from total facilities management limited, Abuja, Nigeria. The data collected were analyzed using descriptive statistics of simple percentage, frequency, and mean. The hypotheses were tested using regression analysis. The results of the analysis were presented in Tables and charts. The result of the data analysis revealed that SMEs in Nigeria undertake all the leadership style considered in this study. However, democratic leadership style has positive and significant impact on employee performance. Also, transformational leadership style has positive and significant impact on employee productivity. The study recommended that for better employee performance and productivity, the SMEs in Nigeria should undertake democratic and transformational leadership style.
1.0 CHAPTER ONE
1.1.2 Background to the study
In our community today, various leadership styles are used in different places. Leadership is applied in the school, our community, organizations or companies, homes and everything we do. There are certain qualities a good leader should obligate, have good communication skills, be confident, have empathy and also should be able to promote unity. Leadership is the act of influencing your followers to achieve a common goal. Being a leader has nothing to do with a title or position at work, being a leader is not being a manager. (Kruse, 2013)Leadership is breaking through the boundary of oneself in order to get the higher attainment. Yes leaders are meant to have followers but a successful leader is not acknowledged by the amount of followers they have. (Drucker, 2017) . It is the process of In an organization a leader should be a person who the follower (employees) should be able to look up to. Leadership is not an independent thing but one that has to do with being able to carry your followers along. Leadership is the act of resolving problems and enabling creativity of the followers. It deals with being able to adapt easily to a situation. (Smith, 2010). A leader is a person who is able to stimulating a team to achieve a specific goal. It deals with motivating others in a way that pushes them to be their best selves. (Robbins, 2020)
The different types of leadership styles that could be used in an organization include: the autocratic leadership style, the laissez-faire leadership style, the transformative leadership style, the bureaucratic leadership style, and the democratic leadership style.
The autocratic leadership style, which is a more aggressive type of leadership, could create distrust between the followers and the leader and make employees feel replaceable and unappreciated. It discourages employees from performing since their inputs do not matter but this leadership style has its positives as it helps the employees to have a sense of direction and gets the work done faster since the decisions are made rapidly. The people who perform this kind of leadership style are seen as bossy (Obiwuru and Akpa, 2011). This leadership style is more strict and rigid unlike the laissez-faire which mainly means “do as you like”. It is a type of style where the leaders do not really concentrate or give the followers attention. They provide what the employees need in order to get the work done.it helps the employees to perform better when the materials are provided, it makes them to not be lazy but instead discover different ideas but the downside of this is that it can make employees perform poorly with their tasks. An autocratic leader always believe they are smarter and know more things than others. (Martunuzzi, 2019). Autocratic leaders gives specific rules and procedures to their followers and such rules and procedures are to be strictly followed, the decisions that has to do with the work place is made by them, they takes no input form their followers, that why some companies who use this leadership style have fast decision process. (Gaille, 2018)
Another form of leadership is the transformative leadership style which is mainly used to motivate the leaders, this style makes the employees respect their leaders but not in a fearful way, it increases the employee’s performance and makes them want to do better. Transformative leaders are charismatic, they deal with change. (Johannsen, 2019). They use their charisma to motivate their followers, they are good in an unsettled environment because they bring about to change. They are like role models to their followers. (S, 2015) Then the bureaucratic leadership is a situation where the leaders just follow the rules given and don’t try to think outside the box, it encourages stable overall employee performance, since the rules and regulations are followed and it also sets the path for employees to follow but the shortcoming of this is that it limits the leader and the employees ability or skill (Shafie, Baghersalimi and Barghi, 2014).
Lastly, the democratic leadership style is a type of leadership where the leaders encourage the followers to give their own ideas; it encourages the participation of the followers or the employees. It enables employees to have a sense of pride in having involvement in the daily accomplishments of the organization but it can lead to making an employee feel like their idea don’t count leading to the reduction of employees confidence. According to Sundi (2013) leadership is the process of making people work together as a team to archieve the goals and objective under this leadership
1.2 STATEMENT OF THE PROBLEM:
Presently the external environment of an organization is rapidly expanding and highly competitive therefore in order to archive their goals and attain competitive advantage they face a lot of challenges. The leadership style used in a business affects the top management down to the employees.
Most researchers place more significance on the autocratic and laissez-faire leadership styles meanwhile neglecting the importance of the democratic and transformational leadership styles. Although the autocratic and laissez-faire have their benefits like making decisions faster and boosting the self-confidence of the employees respectively but their negative effects affects the employee’s performance. The autocratic for example use force to get work done; the use of force demoralizes the employees and instils fear in them which hinders them from performing their activities correctly. While the laissez faire managers who give little or no attention to their employees does not work for those that are not really skilled or those that need to be micro managed. The democratic and the transformational managers are known to have better impact on employee’s performance, due to the fact that the democratic leadership styles encourages the input of the employees in decision making process, employees perform better when they know that their heard. Then the transformational leadership style deals with the motivation of employees to perform more in achieving their task. Motivation is one of the keys that encourage an employee to want to do more. So therefore, the gap spotted is lack of emphasis on democratic and transformational style.
The main aim of this project is mainly to understand how the different leadership styles affect employee’s performance mainly in terms of productivity, this project focuses more performance under productivity. Performance is the ability of an individual to able to perform. Productivity in this sense is the act of being able to produce in other words being productive. Productivity is key to an organization growth, when an organization don’t have productive workers; it hinders the development and growth of the organization.
To determine whether the leadership styles has a positive impact on employees performance
To identify the level of influence leadership styles have on the productivity of an employee
To identify the leadership styles that is mostly used by small and medium enterprises.
1.3.1 RESEARCH QUESTIONS:
i.) Does an organization leadership style have a positive impact on employees performance
ii.) Does an organization leadership styles significantly influence the productivity within the organization
iii.) Is there a widely used leadership style amongst small and medium enterprises?
Ho- There is no positive impact of leadership style on employee’s performance
Ho- There is no significant level of influence of leadership styles on employee’s productivity within the organization
Ho- There no widely accepted leadership style amongst small and medium enterprises.
1.3.2 SIGNIFICANCE OF THE STUDY:
The main significance of these study is to know how an organization or business leadership style can affect how an employee performs. Every organizational practices different leadership in terms of their employees. The main problem is knowing the right one that works more on an employee’s performance. Nowadays there are a lot of small medium businesses all around. The findings will help to guide small medium enterprises to improve and produce good leaders who can motivate their employees to perform well. It can also help the society as a whole and other researchers.
This research will help organizations, societies, researchers to know the leadership style to adopt when it comes to the productivity of an employee, in this case solving a lot of problems.
1.4. Scope of the study
The study examines the impact of leadership style on employee performance of SME's in Nigeria, a case Study of Total facilities management limited in Abuja.
1.5. KEY DEFINITION OF TERMS:
- Productivity: productivity is key to organization growth. Employee productivity is valuation of the proficiency of the workers or a group of workers. Productivity is calculated in terms of how much an employee can do a period of time.
- Motivation: this term was gotten from the word motive, which means needs. Motivation in an organization is the act of inspiring people to achieve a goal.
- Leadership: is the process of an individual or group of individuals motivating people to accomplish an objective. (Ward, 2020)
- Leadership styles: leadership characteristics used to inspire and direct others to accomplish a goal.(Autocratic, Democratic, Laissez faire, bureaucratic, transformational Leadership styles). It is the method or mode of providing direction and inspiring people.
1.6 STRUCTURE OF THE STUDY:
This chapter is basically the introduction that consists of the background of the study which is mainly talking about what gap the research is trying to fill. The objectives which are the things the research is going to do or meet. The research question are the questions that the research carried out will answer, significance of the study is why the research should be carried out, why is the research important then lastly the structure of the study which breaks down how the research is going to be carried out from chapter 1 to chapter 5.
This chapter consists of the conceptual review, theoretical review, and empirical review. The conceptual review deals with the definition of important concepts related to the research carried out. Theoretical review deals with the theories to be used in the research. The empirical review consists of the theories or methods used by other researchers that is interrelated with the research.
This chapter deals with the research methods used to carry out the research which consists of the research design the population and sample design, nature of the sources of data, data analysis and techniques.
This mainly deals with the interpretation of the data gotten from the population size.
This is the summary of the research which consists of the summary, conclusion, and references.