CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
In the world over, employees are the building blocks and the force that drives a company forward and they make the organization what it is. Employee performance is defined as how employees fulfill their job, duties and execute their required roles, if the employees are not happy then their performance will reduce but if they are happy and if their needs are being met then employees give their maximum effort in the organization, also performance will increase which will result in the betterment of the organization. Business owners need employees that are able to do the work, because employee performance is very important in the success of an organization.
In Europe, the future of the organization all depends on the leaders ability to provide a good and motivating workspace for the employees. Some of the problems in an organization is a leader’s inability to motivate the employees and develop trust with the employees, if the employees are motivated and trust their leaders this would increase job performance (Muthoni, 2021). It is the employers responsibility to help the employees work issues, handling problematic customers and helping them focus on the positive aspects of their performance. If a leader can take the time in doing this they will be able to form a strong relationship with their employees and help build an interactive environment. Motivating the employees is an important factor in improving the work efficiency level of the workers which means the employees tend to perform their jobs at the best of their abilities ensuring minimum wastage of time, resources and efforts.
In America, managers and employees are supposed to bring a positive attitude to the organization. Beyond skill sets, the attitude a manager brings to the organization influences team productivity. Attitude problems include lack of motivation, or being too dejected to match the actual event or putting off decisions and frequently hiding behind too much analysis and planning. Managers also can fail to understand the personalities of team members, taking a one-size-fits-all approach to handling staff. Managers are to approach every situation in the company with a calm calculated approach they are to be motivated so as to lead by example, the employees are to take that example and operate with the right attitude (Williams, 2017).
In Asia, lack of experience is a major issue in the organization, so to be able to solve this problem they have to make sure that their employees are properly trained ( Cremer & Zhang, 2014). To train and develop the employees it doesn’t just happen. It takes a conscious, concerted effort on the part of both managers and employees. And beyond that, it takes time and commitment.
In Africa, corruption is a big problem in Africa Corruption in Africa takes place in many forms. Corruption in Africa has grown at an alarming rate due to poverty, which is rampant. Salaries often isn't enough to cater for a big and extended family force because most employees aren’t paid what they are supposed to get (Ntata, 2015). The battle of corruption is something that wont come to an end over night, with good leadership these things can come to an end our leaders need to be educated on the proper way of management and the proper ways of leadership styles.
In Nigeria, there is lack of training and coaching in leadership. Leadership plays a big role in the success of an organization and the effort of the employees also plays a big part in the operations in an organization.. Training and coaching of the employers and employees is very key to professional growth and peak performance. Training is never too much, coaching is never wasted, and there is never a case of too much knowledge (Olusola, 2019). Another thing that lacks in the system is education if the leaders can be educated in the proper ways of leadership styles it will improve the organization.
Leaders need to understand the key benefits of employee performance so that they can come up with ways of understanding employees, when employees don’t perform well the consumers may feel like going elsewhere to seek services or help which would be bad for the organizations image (Leonard, 2019). It is the employer’s responsibility to find ways to maintain and bring out the absolute best performance in their employees, by doing this the company isn’t just improving but they are building a great future for the organization. An organization that doesn’t have good employee performance will experience a decline in profit and production. Employee performances can be measured by different things for example it can be measured by the good quality of work, the speed, efficiency, trust and consistency, these are few measures that can improve the performance in the organization.
Who is a leader? A leader is someone who can see how things can be improved and who rallies people to move toward that better vision. Leaders can work toward making their vision a reality while putting people first and guiding people to accomplish goals. Being able to motivate people isn’t enough leaders need to be empathetic and connect with people to be successful. Leaders don’t have to come from the same background or follow the same path anyone can be a leader they just need to have a good vision for the future, they need to be bold, confident and ambitious (Morgan, 2020).
Leaders are responsible for ensuring team productivity, success and solving problems among employees, there are many responsibilities the leader will have to take (Wilde, 2019). Leadership styles refers to a leader’s behavior when directing, motivating, guiding and directing people in an organization (Cherry, 2021). We have many leadership styles but, in this study, we will only be talking about 3 styles and they are Democratic, Autocratic and Laissez Faire Style of Leadership. It is really important for leaders in an organization to select the right styles of leadership when leading. Different leadership styles work different ways for different leaders, let’s look at the Democratic leadership style this style emphasizes on employees working together to achieve their goals. Autocratic leadership style involves absolute, authoritarian control over a group of employees by the leader. Laissez Faire leadership style talks about employees being independent in decision making. All styles could be used depending on the leader. Where a boss views his employees as subordinates, a leader views his employees as part of a team and seeks to empower them so that they exceed minimal expectations. Leaders who inspire and empower have a greater ability to influence the team's actions in a good way. Inspiring and empowering builds loyalty and trust, which are positive qualities that create a strong, productive corporate culture. When everything is based on performance and results without developing loyalty and trust, team performance is often negatively affected (Kimberlee, 2019).
1.2 Statement of the Problem
The problem of the study is connected to the gap of expected performance of employees to the actual performance given by employees in Nigeria deposit insurance corporation, Lagos state Nigeria. The gap can be bridged by examining what effect leadership styles have on employee performance. Several studies have been carried out on leadership styles and employee performance in different organizations and environment.
Not much study has been conducted on the relationship between democratic leadership and employee participation, the study will fill this gap in knowledge.
According to Adeyemo, Terry and Lambert (2015), some organizations don’t educate themselves in the importance of leadership styles, if leaders in organizations are educated properly then they will see that leadership styles helps in enhancing quality of work life among employees. However not much study has been carried out in this regard, therefore this pose as a gap which this objective will fill by examining the impact of autocratic leadership on work quality.
Various studies have found that in Laissez faire leadership style the motivational aspect is very low because the management in the corporation don’t assist or help the employees. This is considered the worst style in motivating employees compared to others (Chaudhry & Javed, 2012). However further research can be done to show that there is a positive effect of Laissez faire leadership on employee motivation.
Based on the above reviewed findings, it can be observed that not a lot of study were found on Democratic leadership style and employee participation, autocratic leadership style and work quality, Laissez faire and employee motivation, which is a gap identified. Research is necessary in expanding knowledge and filling these gaps in knowledge
1.3 Objective of Study
The main objective of the study is to investigate the interaction between leadership styles and employee performance in Nigeria Deposit Insurance Corporation, Lagos State Nigeria. The specific objectives however are to:
- Determine the influence of Democratic leadership style on Employee Participation in Nigeria Deposit Insurance Corporation, Lagos State Nigeria.
- Evaluate the effect of Autocratic style of leadership on Work Quality in Nigeria Deposit Insurance Corporation, Lagos State Nigeria.
- Examine the interaction of Laissez Faire leadership style on Employee Motivation in Nigeria Deposit Insurance Corporation, Lagos State Nigeria.
1.4 Research Questions
The proposed study would answer the following questions:
- What is the influence of Democratic leadership style on Employee Participation in Nigerian Deposit Insurance Corporation, Lagos State Nigeria?
- How does Autocratic style of leadership influence Work Quality in Nigeria Deposit Insurance Corporation, Lagos State Nigeria?
- What is the influence of Laissez Faire leadership style on Employee Motivation in Nigeria Deposit Insurance Corporation, Lagos State Nigeria?
1.5 Research Hypothesis
The hypothesis for the proposed study is as follows:
H01: Democratic leadership style has no significant influence on Employee Participation in Nigeria Deposit Insurance Corporation, Lagos State Nigeria.
H02: Autocratic style of leadership does not have a significant effect on Work Quality in Nigeria Deposit Insurance Corporation, Lagos State Nigeria.
H03: Laissez Faire leadership style does not significantly affect Employee Motivation in Nigeria Deposit Insurance Corporation, Lagos State Nigeria.
1.6 Operationalization of Variables
The variables for the study are operationalized as:
Y= Dependent variable
X=Independent variable
Y = f(X) where Y = the dependent variable and X = the independent variable.
Further, we have Y =Employee Performance and X = Leadership Styles
Y = (y1, y2, y3)
Where:
y1 = Employee Participation (EP),
y2 = Work Quality (WQ),
y3 = Employee Motivation (EM).
X = (x1, x2, x3)
Where;
x1 = Democratic Leadership Style (DLS),
x2 = Autocratic Leadership Style (ALS),
x3 = Laissez Faire Leadership Style (LFLS)
The simple equations are given as:
y1 = f(x1) ……. eq1
y2 = f(x2) ……. eq2
y3 = f(x3) ……. eq3
Y = f(x1, x2, x3) ….. eq4
The regression equations are given thus as:
y1 = α0 + β1x1 + µi ……. eq1
y2 = α0 + β2x2 + µi ……. eq2
y3 = α0 + β3x3 + µi ……. eq3
Y = α0 + β1x1 + β2x2 + β3x3 µi ……. eq4
The four equations above will be evaluated in the study to test the effect of leadership styles on the performance of employees in Nigerian Deposit Insurance Corporation, Lagos State Nigeria. Where: α0 = constant or intercept of employee performance, this is the average value of the dependent variable when the independent variable is equal to zero. β = regression parameter, which measures the coefficient of leadership styles on the employee performance in Nigerian Deposit Insurance Corporation, Lagos Nigeria. µi= error term or stochastic variable, this is included in the model to accommodate the influence of other variables that affect the dependent variables, but which are not included in the model.
1.7 Scope of the Study
This study looks into leadership style and employee performance in Nigerian deposit insurance corporation Lagos State, Nigeria. The variables to evaluate in this study include the independent variable leadership styles (Democratic, Autocratic and Laissez Faire leadership styles) while the dependent variable is employee performance (employee participation, work quality and employee motivation). The study will cover a period of one-year 2021 to 2022 the survey research design will be adopted.
The study adopts the simple random sampling technique while the sample size will be obtained using Taro Yamane sample size determination formular. The simple random sampling technique will be utilized as a well-structured questionnaire which will be used to collect data from the respondents. The data will be analyzed using regression analysis this will be used to analyze data for the investigation.
1.8 Significance of the Study
This study will provide details on how to improve employee performance through proper use, implementation and selection of leadership styles. The findings of this study will educate leaders on the merits of leadership styles, how it will benefit the organization, academic field and improve employee performance.
The importance of this study to the financial field is that it will ensure leaders pick the best leadership styles to manage their employees. This doesn’t just help leaders manage employees well, but this also helps build trust in the organization which enhances productivity and improves employee performance. The right implementation of the right leadership style will affect productivity, decision making and the idea generation in the organization, a successful leader will be able to understand the skill level and capabilities of the employees which will enable the leader to make good decisions. This research will add to the body of knowledge in the field of leadership styles and will be a great use to financial institutions.
This can add to the academic field adding knowledge by giving references to people of different educational fields and people of similar research, and paves the way for more research into leadership styles and how it affects employee performance in the academic field. In the academic field if they adopt the right leadership style this will make the academic community able to make decisions, help them know what goals to optimize and how to communicate with people. Implementing the right leadership will enable us to be able to solve complex problems in the academic field, solve conflicts and change the course or vision of a school or even improve the educational system.
1.9 Definition of Operational Terms
Leadership Styles
Leadership style is the act or approach of giving direction, implementing plans and giving motivation to people. They also refer to a leader’s characteristics and behavior when directing and managing people (Cherry, 2021).
Democratic Leadership Style
Democratic leadership style is a style of leadership in which members of an organization take a more participative role in the decision making process in an organization. (Cherry, 2021).
Autocratic Leadership Style
Autocratic leadership style is a leadership style where an individual makes all the decisions in an organization. Leaders who practice this style of leadership make decisions based on their ideas and judgments they hardly accept advice or opinions from their employees.(Cherry, 2020).
Laissez Faire Leadership Style
Laissez faire is a type of leadership in which leaders are laid back and let the employees make their own decisions. (Cherry, 2021).
Employee Participation
Employee participation refers to employees taking part in activities in an organization. (Quain,2018).
Employee Motivation
This describes how committed an employee is to his job, how engaged he feels with the company's goals and how empowered he feels in his daily work. This is the attitude employees have towards their job, it is also the level of energy and enthusiasm that employees bring to an organization.(Donohoe, 2018)
Work Quality
This is the value of work delivered by an employee in an organization (Spacey, 2017).
Financial Institution
A financial institution is defined as an organization that engages in the business of handling or dealing with financial and monetary transactions such as deposits, loans and investments (Hayes, 2021)
Leader
A leader is a person who can see how things can be improved and gets people to move forward towards a better vision. A leader is also someone who leads or guides people to accomplish set goals (Morgan, 2020).
