The Importance of Leadership on Employee Performance in an Organization

The Importance of Leadership on Employee Performance in an Organization

Research Paper

MT4200: Business Ethics

14 November 2014

Abstract

Welcome to my research on “The Importance of Leadership on Employee Performance in an Organization.” While reading this research paper, there will be many details discussed about various types of leadership styles. Some styles may be familiar and some may not. There are many styles of leadership and this paper will focus on the definition, roles, pros, and cons of these three different styles. I have determined of all the factors that motivate employees, the most influential factor is the leadership styles of the organization. The final recommendation for an organization choosing a leadership style is to allow the employees to have an input on what they prefer, as this may increase the performance rates.

The Importance of Leadership on Employee Performance in an Organization

Organizations often rely on their human resources to implement goals that have been set. The exploitation of the capacity of human resources will always remain an important drive in implementing normal duties, purposes, and goals of organizations. As such, the behavior of employees will always remain an important element of interest to organizations. The control, regulation, monitoring and enhancement of desired behavior in employees are an important area of interest to organizations. Of all the factors that motivate employees, the most influential factor is the leadership styles of the organization. “Leadership is the ability or authority to guide and direct others toward a goal.” (Ferrell, Ferrell, & Fradedrich, 2013, p. 11-1)

Leadership is an often debated topic. Everyone has their own opinion of the types of characteristics leaders or managers should possess.   Employees and staff often have their own ideas about their manager’s or supervisor’s leadership style. There are many types of leadership. What type of leadership brings success? What factors motivate employees to exceed expectations? What must a supervisor or manager do to increase performance and exceed goals? There are three leadership styles I will be focusing on and I will be addressing… the definition, roles, pros, and cons of these three different styles.

The first style of leadership is transactional leadership and the definition is;

 “Transactional leadership involves a social exchange process where the leader clarifies what the followers need to do as their part of a transaction (successfully complete the task) to receive a reward or avoid punishment (satisfaction of the followers’ needs) that is contingent on the fulfilment of their transaction (satisfying the leader's needs).” (Eeden, Cilliers & Deventer, 2008, p. 255).

Transactional leadership points out a variety of transactions in form of legitimate agreement between the leader and employees as a way to motivate them to outperform in their responsibilities. A rewards or punishment in transaction for a specific task to be completed is aimed at leadership effectiveness. I do believe that transactional approach is task-orientated and can be very useful when meeting a deadline or in emergencies. Transactional leadership also affects employee’s motivation and performance. Followers that are motivated by a clearly defined system of rewards and punishments will work well under a transactional leader (Turner, 2012).

I do believe that a positive consequence of transactional leadership is a clear line of command from the leader to the employee will inspire them to do their best. It is effective in the work areas where it is clear what tasks need to be completed and there is little to no room for ingenuity and modification or substitute methods for goal to be achieved. The transactional leadership style is imperfect because it motivates at a lower level of employees only. I feel that reward and punishment do not inspire at the greater levels of human progression and human thinking. Ingenuity is confined with the transactional leadership style because the task cannot be simply determine with a set procedures. It will limit employees who wishes to engage in a professional environment, at a higher level.

I do think and have witness that transactional leaders can be practical because they produce a positive arrangement, and make a decision what needs to be completed. This style of leadership provide rewards for compliance, but punish for insubordination. However, autocratic (tyrannical) leaders can be rude, create fear among the employees and often make decisions without advising their subordinate.  I honestly believe that employees of a tyrannical leader can rely too much on their leader and may do substandard in the leader’s absence.