Leadership affects on employee

[IMPACT OF LEADERSHIP STYLES ON EMPLOYEE’S PERFORMANCE AND THEIR HEALTH IN SMESECTOR] ]

[2010] Jan

A THESIS ON IMPACT OF LEADERSHIP STYLES ON EMPLOYEE’S PERFORMANCE AND THEIR HEALTH IN SME SECTOR

A Thesis Submitted to the Superior University In Partial Fulfillment of the Requirements for the Degree of Master in Business Administration By

Waqas Sikander

2010

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Superior University Lahore

[IMPACT OF LEADERSHIP STYLES ON EMPLOYEE’S PERFORMANCE AND THEIR HEALTH IN SMESECTOR] ]

[2010] Jan

Declaration of Originality I hereby declare that this project is entirely my own work and that any additional sources of information have been duly cited. I hereby declare that any Internet sources published or unpublished works from which I have quoted or draw references fully in the text and in the content list. I understand that failure to do this will result in failure of this project due to plagiarism. I understand I may be called for viva and if so must attend. I knowledge that this is my responsibility to check whether I am required to attend and that I will be available during the viva periods.

Signed….……………………………………………….

Date……………………………………………………...

Name of Supervisor……..……………………………….

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Superior University Lahore

[IMPACT OF LEADERSHIP STYLES ON EMPLOYEE’S PERFORMANCE AND THEIR HEALTH IN SMESECTOR] ]

[2010] Jan

ABSTRACT This study has examined the different leadership styles on employee’s performance and their health in Pakistan. The primary focus of this study is to investigate the impact of leadership styles on employee performance and their health in SMEs. The study has used quantitative approach to measure the impacts of leadership on performance. Data has been collected through structured questionnaire in which respondents were asked close-ended questionnaire. The present study finds out that the relationship between employee performance and health with democratic style is statistically significance. It concludes that if the leader involves the employees in decision making process, having friendly relationship with them and decrease their stress at the workplace, he can maximum help in developing the performance. Key Words: Transformational Style, Democratic Style and Laissez fair style.

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Superior University Lahore

[IMPACT OF LEADERSHIP STYLES ON EMPLOYEE’S PERFORMANCE AND THEIR HEALTH IN SMESECTOR] ]

[2010] Jan

Acknowledgement: I would like to thank the following persons without whose guidance this dissertation could not have been completed. First of all I would like to thank my Allah who always guides me in every sphere of my life. Secondly, I am very thankful to the Prof. Nadeem Iqbal, Prof. Sofia Waleed and Miss. khansa for her guidance and imminent the whole time in making my dissertation and especially, her precious suggestions and comments that truly guided my research and also helped me to structure my thesis. Finally I am very thankful my friends and my parents particularly, who has always supported me not only in completion this thesis but also supported me in whole of the MBA. I never explained my parents support in words because it’s just a feeling which is not expressed in words.

Table of Contents

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[IMPACT OF LEADERSHIP STYLES ON EMPLOYEE’S PERFORMANCE AND THEIR HEALTH IN SMESECTOR] ] Authors’ Declaration of originality................................................................... I ABSTRACT.......................................................................................................II ACKNOWLEDGEMENTS.............................................................................III Chapter 1: Introduction....................................................................................6 1.0 Introduction....................................................................................................6 1.1 Purpose statement..........................................................................................8 1.2 Objectives......................................................................................................9 1.4 Significance...................................................................................................9 1.3 Hypothesis...................................................................................................10 Chapter 2: Literature Review.........................................................................11 2.0 Literature Review........................................................................................11 2.1 Theoretical Model........................................................................................15 Chapter 3: Theoretical Framework...............................................................16 3.0 Theoretical Framework................................................................................16 Chapter 4: Data / Methodology......................................................................17 4.0 Tools of data collection...............................................................................17 4.1 Sampling technique and sample..................................................................17 4.2 Measure........................................................................................................17 4.3 Methodology................................................................................................18 Chapter 5: Analysis.........................................................................................19 5.0 Data screening.............................................................................................19 5.1 Results..........................................................................................................19 5.1.0 Descriptive statistics.................................................................................20 5.1.1 Histogram.................................................................................................21 5.1.2 Scatter Plot................................................................................................25 5.1.3 Correlation................................................................................................28 5.1.4 Regressions...............................................................................................31 Chapter 6: Discussion Conclusion..................................................................34 6.0 Discussion....................................................................................................34 6.1 Conclusion...................................................................................................35 References..........................................................................................................36

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Superior University Lahore

[2010] Jan

[IMPACT OF LEADERSHIP STYLES ON EMPLOYEE’S PERFORMANCE AND THEIR HEALTH IN SMESECTOR] ]

[2010] Jan

1.0 INTRODUCTION AND BACKGROUND There is an ongoing discussion about leadership styles and its impact on various aspects of employee performance and their work-related health. It has been suggested that leadership factors had an influence on the increasing work-related ill health, but these suggestions have rarely been based on scientific studies. Although relationship between leaders and subordinates has gradually been more focused, but it is still scientifically unclear as to what extent and in what ways leaders influence the health of employees. The figure below demonstrates how leaders may influence the health of employees. The leader can be described as a possessor of the tools to create and change the structure and culture within an organization. These prerequisites have been influenced managers’ leadership style, managers’ health and also legitimate the communication processes, feedback and reward systems. According to Schein (1992) it is the middle- and low level managers who primarily influence the subordinates, their stress and health outcomes. They execute and determine the boundaries for the subordinates. The European states have experienced structural changes in labor market and living conditions during the last two decades, which are discussed as factors that may influence health levels in populations (Theorell & Vogel, 2003). The structural changes have led to new demands on employees’ flexibility and ability to handle changes, which is referred to as a health risk (Aronsson & Sjögren,1994, Arnetz, 1996). There is no consensually agreed-upon definition of culture. Culture is variously defined in terms of commonly shared processes: Shared ways of thinking, feeling and reacting; shared meanings and identities; shared socially constructed environments; common ways of interpreting how technologies are used; and commonly experienced events (House, Wright & Aditya, 1997). It is almost self-evident and no surprise to common sense that leadership possesses such power, as it is a social process itself and the social climate develops as social process. Studies of different kinds have verified the role of leadership style for the climate formation; correlation studies (EKvall and Arvonen 1984, EKvall, Frankenhaeuser and Parr 1996), case-studies (tedgard 1987), action-research (Marrow, Bower and seashore 1967), and studies with experimental design (Litwin and Stringer 1968). Yet it is not productive to include leadership in the climate concept and treat it as a special dimension of

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[IMPACT OF LEADERSHIP STYLES ON EMPLOYEE’S PERFORMANCE AND THEIR HEALTH IN SMESECTOR] ]

[2010] Jan

the climate alongside of other dimensions. James and jones (1974) opposed making leadership style a part of the climate concept. They pointed out that “closeness of supervision” is a “leadership process variables”, and that it should be treated as such; nothing is to be gained by bringing it into the climate concept. With the ever changing business landscape of more and innovative competitors, most service firms recognize the need to introduce innovations and new technologies within their organizational processes to stay in the market, or to retain their competitive advantage compared to their rivals. One of the most often used models explaining technology acceptance is the technology acceptance model (TAM) by Davis et al. (1989). It was the first model to state that psychological factors, perceived usefulness and perceived ease of use of the new technology, are central in influencing its use. Since the model allows for the addition of external variables, numerous extensions have been made. These relate to technology-based factors like perceived enjoyment and perceived attractiveness (Van der Heijden, 2003, 2004), personal factors like personal innovativeness (Agarwal and Prasad, 1998, 1999), or interpersonal factors like trust (Geffen et al., 2003). Also concrete management actions like offering training and education, and organizational technical support have been shown to play a role in influencing individual usage of innovations (Schillewaert et al., 2005). Less attention, however, has been given to the influence of the overall leadership style in an organization. We, therefore, extend TAM with two styles: transactional leadership and transformational leadership. These concepts were developed by Burns (1978) on the basis of observing political leadership, and extended by Bass (1985). Despite the fact that the styles cannot be seen as opposite ends of a continuum (Avolio and Bass, 1991), they are different in nature. We expect them to play similar roles in the context of technology acceptance, but via different mechanisms. In this observe, the responsibility of leaders, as well as their performance in increasing their subordinates is above some question. Although more leadership styles introduced (eg. transformational and transactional) but out of which some is more productive for increasing subordinates performance and some is not more important. Effective leadership styles have much solution for arising problem in the subordinates work and increasing their performance. In fact, the performance of leaders, as with performance of employees in universal, is a build in relation to diversity fundamental dimensions such as different leadership styles and advance technology acceptance.

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Superior University Lahore

[IMPACT OF LEADERSHIP STYLES ON EMPLOYEE’S PERFORMANCE AND THEIR HEALTH IN SMESECTOR] ]

[2010] Jan

With all these matters considering the main purpose of this chronological mixed methods study is t investigate effective leadership styles that enhance subordinates performance in first phase with intent of using this information in the second phase to generalize the findings. In particular, most of the research exploring the different effective leadership styles relation with the performance and also introduced innovative technology in the developing countries & services and manufacturing companies. The main purpose of this study is to investigate the different effective leadership styles. The paper is structured as follows. First, a short literature overview is given on the concept of leadership styles. Secondly, a conceptual framework is built by formulating hypotheses on the effects of leadership styles and the employee’s performance and health. Thereafter the empirical study is described and its results have been presented. Therefore, the present study is aim to investigate the perceptions of leaders and subordinates performance in the small medium and large organization in Pakistan and other countries using different leadership styles.

1.1 PURPOSE STATEMENT (AIM OF INVESTIGATION) For the purpose of higher performance of employees and subordinates we must use effective leadership styles and leadership styles also important for the health of employees. Research also described that effective leadership styles can enhance the productivity performance and commitment with their job and organization. So the execution of leadership styles is one way that with use of different leadership styles leaders can construct commitment and job satisfaction of employees that increase their performance. Therefore, aim of this quantitative study has been, in first to investigate and recognize the impact of leadership styles on employee’s performance and health in small and medium enterprises (SMEs) in Pakistan and to further investigate the different leadership styles that increase employee’s performance among different leaders using structured questionnaire.

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Superior University Lahore

[IMPACT OF LEADERSHIP STYLES ON EMPLOYEE’S PERFORMANCE AND THEIR HEALTH IN SMESECTOR] ]

[2010] Jan

1.2 OBJECTIVE OF THE STUDY To investigate leaders view on employees performance that how they perform good



quality and low quality and how leadership styles impact on their performance. To investigate leaders experiences about different leadership styles and how they feel



about these styles? To investigate leader’s opinion about employee’s health that contributes their



employee’s performance. To create the foundation for evolving effective and performance oriented leadership

 styles.

1.3 SIGNIFICANCE OF THE STUDY 1. The present study has been significant in number of ways. It has been contributed to

the body of knowledge by: Firstly, since the present area is highly under researched in Pakistan and developing countries. No study has been found to investigate the leadership styles to increase employee’s performance and their health in Pakistan. So, the present study supposes that the findings of the present study has been helped the leaders in organization of Pakistan in particular and those in developing countries in general to answer the long standing question of how to enhance leader’s performance. In addition, the exclusive findings of the study may also help to understand the difference between leadership styles in developed countries and those in underdeveloped countries. It has been also strengthen the argument that since mass of the research on the topic is conducted in developed countries and their findings cannot be exactly applied in developing countries. Therefore, the present study has been contributed in the literature of leadership styles that impact on employee’s performance and their health. Thus, has been represented the situation of developing country like Pakistan especially the organizational secretor.

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Superior University Lahore

[IMPACT OF LEADERSHIP STYLES ON EMPLOYEE’S PERFORMANCE AND THEIR HEALTH IN SMESECTOR] ]

[2010] Jan

2. Secondly, no research has been found on leadership styles, employee’s performance

and satisfaction especially in Pakistan. 3. Subordinates who are not committed and satisfied with the leadership styles may likely to put less effort in the organization field as compared to the employees with the high level commitment and satisfaction. 4. Although, the present study has been aim to provide guidelines to leaders to

understand how employees perform better. 5. Therefore identifying those leadership styles that tend to enhance commitment and

satisfaction which leads to employees performance would be a significant bane fit for the organization. 1.4: Hypothesis Hypothesis 1: H1: there is relationship of Employee Performance and their Health with Transformational style. H0: there is no relationship of Employee Performance and their Health with Transformational style Hypothesis 2: H1: there is relationship of Employee Performance and their Health with Democratic style. H0: there is no relationship of Employee Performance and their Health with Democratic style Hypothesis 3: H1: there is relationship of Employee Performance and their Health with Laissez fair style. H0: there is no relationship of Employee Performance and their Health with Laissez fair style

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Superior University Lahore

[IMPACT OF LEADERSHIP STYLES ON EMPLOYEE’S PERFORMANCE AND THEIR HEALTH IN SMESECTOR] ]

[2010] Jan

Chapter 2 2.0: LITERATURE REVIEW: Leadership styles There are different approaches to studying leadership. Yukl (1994) considers the trait approach and the charismatic/transformational leadership approach as two major research avenues to the concept of leadership. The first, focusing on personal attributes of successful leaders, has mainly been used in psychology. In organizational studies, the second approach is used more often. Originally the theory of charismatic leadership was coined by House (1977), stating that a charismatic leader is generously accepted and obeyed by followers by having a strong need for power and a high self-confidence. Parallel to this conception of charismatic leadership, the concepts of transformational and transactional leadership were developed by Burns (1978) on the basis of observing political leadership. Bass (1985) further extended these notions and applied them in an organizational setting. In his theory transformational and transactional leadership are not defined to be on a single continuum, but as two separate concepts. A leader could possess elements of both styles. The transformational style of leadership is characterized by charisma, individual consideration, intellectual stimulation, and inspirational motivation. Charisma can be defined as the degree to which the leader behaves in admirable ways that cause followers to identify with the leader (Judge and Piccolo, 2004) or the amount of faith, respect, and inspiration he instills (Bass, 1985; Bycio et al., 1995). Individual consideration refers to the ability of a leader to consider subordinates individually, by delegating projects to stimulate people, creating learning experiences, and paying attention to the personal needs of these followers. Intellectual stimulation is the act of encouraging new ways of thinking, reasoning before acting, and enabling subordinates to analyze problems from many different viewpoints (Avolio and Bass, 1988). Finally inspirational motivation is inspiring and empowering followers to enthusiastically accept and pursue challenging goals and a mission (Bass, 1985). Transactional leadership on the other hand is characterized by contingent reward and management-by-exception. The former refers to whether a leader rewards his followers when they act in accordance with contracts, rules, norms, agreed-upon objectives, or expend the necessary effort on a certain task (Howell and Avolio, 1993). (Mitch McCrimmon) introduces

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[IMPACT OF LEADERSHIP STYLES ON EMPLOYEE’S PERFORMANCE AND THEIR HEALTH IN SMESECTOR] ]

[2010] Jan

some benefits of transformational leadership style. There is no doubt that being able to inspire people, stimulate them to think differently and pay attention to their needs are great ways for a leader to behave. If you have good content and integrity and can present a case for change with enough enthusiasm to inspire people, you are more likely to win them over than if your communication style is sleep-inducing. Being inspirational is most useful in situations where there is no evidence or the facts are unclear. This is especially true with clashes of values or standards of behavior. (Martin Luther King) appealed to a basic sense of fair play to move the U.S. Supreme Court to outlaw segregation on buses. The facts alone wouldn't have done it. Democratic Style: The Democratic Leadership Style was first described Lewin, Lippitt, and White in 1938 along with the autocratic leadership and the laissez-faire leadership styles. The democratic style was also included by (Daniel Goleman in 2002) as one of his six leadership styles. The democratic leader gives followers a vote in nearly every decision the team makes. The process involved with being a democratic leader is very time consuming because decisions are nearly always made together. The democratic leadership style is able to quickly build flexibility and responsibility and can help identify new ways to do things. This leadership style is best used when the followers are knowledgeable about the organization's process and change is needed. For example, this style is used when the leader needs to introduce fresh ideas into the organization to help with an old process. Democratic bosses are consultative, inclusive, humanistic, and focus on people. They build consensus, thrive on informality, are tolerant of conflict, and get an entire team credit. There are two types of democratic managers. The consultative democrat will listen carefully to everyone’s input, and even change their approach if it seems reasonable, but makes the final decision. On the other hand, the participative democrat relies on group consensus to make decisions. (John Kotter). Laissez Faire style: Subordinates and employees are allowed and appreciated to participate in decision making, this is Laissez Faire style of leadership (Lewin, Liippit, and White, 1939). But to get fruitful results, employees must be responsible, experienced and mature. Leaders who adopt this style of leadership (Schilling, 2008) provides a guideline or policy to achieve

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[IMPACT OF LEADERSHIP STYLES ON EMPLOYEE’S PERFORMANCE AND THEIR HEALTH IN SMESECTOR] ]

[2010] Jan

goals and supervise the employees in order to make followers work by remaining on track, the remaining work is of employees that how they satisfy the customers. As much employees are sincere with their work and cooperative with each other, they can get goals easily (Ogbonna et al.,2000). The Laissez Faire Leadership Style was first described (Lewin, Lippitt, and White in 1938) along with the autocratic leadership and the democratic leadership styles. The laissez faire style is sometimes described as a "hands off" leadership style because the leader provides little or no direction to the followers. The characteristics of the laissez faire style include: Allows followers to have complete freedom to make decisions concerning the completion of their work or ask questions of the leader . The leader provides the followers with the materials they need to accomplish their goals and answers questions to the follower's questions. (Lewin, Lippitt and White) were one of the first to categorize leadership styles in terms of behavioral characteristics. Prior to their work, leadership traits were the focus of leadership studies. The impact of leadership on subordinates’ job satisfaction Results from several studies indicate that there is a relationship between perceived leadership style and the job satisfaction of subordinates. Chiok Foong Loke (2001) found that leadership behaviors explained 29% of job satisfaction and Lucas (1991) that leadership style perceptions predicted 36.6% of the variance in job satisfaction scores among nurses. Bratt et al. (2000), present results indicating that job stress and nursing leadership are the most influential variables in the explanation of job satisfaction among nurses. Sorrentino et al. (1992) found significant correlations between head nurse behaviour and job satisfaction in subordinates as well as a moderating effect of leadership on job anxiety and support perceived by nurses. Upenieks (2002) found that clinical nurses employed at “magnet” hospitals experience greater levels of empowerment and job satisfaction than do nurses employed at “non-magnet” hospitals. This is due to access to work empowerment structures within their practice environments. Differences in leadership effectiveness between magnet and non-magnet nurse leaders that accounted for differences in job satisfaction of nurses included greater visibility and responsiveness by magnet leaders, better support of nurse autonomous decision-making by magnet leaders and greater support of a professional nursing climate among magnet leaders.

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[2010] Jan

High power motivation in nurse managers has been found to correlate negatively with use of good leadership behaviors and high staff nurse job satisfaction. Managerial motivation for achievement, on the other hand, correlated positively with use of good leadership behaviors and high nurse job satisfaction (McNeese-Smith, 1999). Skogstad & Einarsen (1999) found positive correlations between a changes centered leadership style and subordinates’ job satisfaction, organizational commitment and evaluations of the leader’s competence. Upenieks (2003) investigated nurse leaders’ perceptions of what comprises successful leadership in today’s acute inpatient environment. The results show that 83% of the nurse leaders validated that access to power, opportunity, information, and resources creates an empowered environment and a climate that fosters leadership success. Access to these factors also enhances good work satisfaction among nurses. Research results from several studies indicate that both consideration and initiating structure behaviours of leaders are positively related to job satisfaction among subordinates (Kennerly, 1989, Bare-Oldham, 2002, Alsubaie, 1997). Boumans & Landeweerd (1993) found that nurses are most satisfied if the head nurse pays much attention to both “social” and “instrumental” leadership and that social leadership alone also contributes positively to nurses’ reactions to their job, whereas instrumental leadership alone leads to health complaints. Butler & Cantrell (1997) also found both consideration and initiation of structure leadership behaviour to have positive effects on the productivity of group members. Other studies reveal a positive relationship only between consideration leadership behaviour and job satisfaction among subordinates (Zigrang, 2000, Payden, 1997) or at least that this relationship is stronger than the one between initiating structure leadership behaviour and job satisfaction (Haddad & Samarneh, 1999, Pakard & Kauppi, 2000, Pool, 1997). Results by Schriesheim & Murphy (1976) indicate that in low-stress jobs, leadership consideration enhances job satisfaction and performance, but in high-stress jobs, leadership structure is helpful. High structure has dysfunctional effects only when accompanied by low consideration. The impact of leadership on subordinates’ health (stress and burnout) Leadership has in a number of studies been referred to as one of many possible sources of employee health and stress at the work place (McVicar, 2003, Jonsson, Johansson, Rosengren, Lappas & Wilhelmsen, 2003) but the magnitude of its impact varies across studies. Stordeur, D´hoore & Vandenberghe (2001) found leadership dimensions to explain

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[IMPACT OF LEADERSHIP STYLES ON EMPLOYEE’S PERFORMANCE AND THEIR HEALTH IN SMESECTOR] ]

[2010] Jan

9% of the variance in emotional exhaustion and Gordick (2002) found that transformational leadership explained 2% of the variance in coping with organizational change and that it was not a significant predictor of perceived stress. In a large prospective study of a random sample of Swedish employees Oxenstierna et al (2004) found that lack of decision authority as well as lack of support from work mates were powerful predictors of longlasting sick leave (at least 60 days). Support from superiors had no statistically significant effect. Some

studies

indicate

a

moderate

relationship

between

leadership

styles

and

burnout/emotional exhaustion/depersonalization (Langner, 2002; Webster & Hackett, 1999). Vealey, Armstrong, Comar & Greenleaf (1998) found perceived coaching styles/behaviours predictive of athlete burnout. But several studies have found no impact of leadership on health of subordinates, or the results indicate that the role of leadership is inferior to other work related and demographic factors (Mazur & Lynch, 1989, Lubofsky, 2002, Bernin and Theorell, 2003). Stordeur, Vandenberghe & D´hoore (1999) found that leadership dimensions were not significantly related to burnout once stressors like job strain, lack of social support, conflict at work and feeling that the job is threatened were included in the regression model. These findings are supported by results from Gordick (2002) and Widerszal-Bazyl (2003). Widerszal-Bazyl (2003) points out that social support plays an especially important role. She suggests that further research should focus on the indirect relationship between leadership and employee health and analyze to what extent supervisors influence e.g. demands, control and social support, which are known to have a strong impact on employee health.

2.1 Theoretical Model:

Transformational Style

Democratic

Job

Style

Satisfaction

Laissez Faire Style

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Superior University Lahore

Performance of employee & Health

[IMPACT OF LEADERSHIP STYLES ON EMPLOYEE’S PERFORMANCE AND THEIR HEALTH IN SMESECTOR] ]

[2010] Jan

Chapter 3: 3.0 Theoretical Framework My study utilizes the previous researchers work and according to their research studies I have made my own phenomena to check it in Pakistani environment. Here I discussed some theories related with my study. There are different approaches to studying leadership. Yukl (1994) considers the trait approach and the charismatic/transformational leadership approach as two major research avenues to the concept of leadership. The first, focusing on personal attributes of successful leaders, has mainly been used in psychology. In organizational studies, the second approach is used more often. Originally the theory of charismatic leadership was coined by House (1977), stating that a charismatic leader is generously accepted and obeyed by followers by having a strong need for power and a high self-confidence. Results from several studies indicate that there is a relationship between perceived leadership style and the job satisfaction of subordinates. Chiok Foong Loke (2001) found that leadership behaviors explained 29% of job satisfaction and Lucas (1991) that leadership style perceptions predicted 36.6% of the variance in job satisfaction scores among nurses. Bratt et al. (2000), present results indicating that job stress and nursing leadership are the most influential variables in the explanation of job satisfaction among nurses. Sorrentino et al. Some

studies

indicate

a

moderate

relationship

between

leadership

styles

and

burnout/emotional exhaustion/depersonalization (Langner, 2002; Webster & Hackett, 1999). Vealey, Armstrong, Comar & Greenleaf (1998) found perceived coaching styles/behaviours predictive of athlete burnout. But several studies have found no impact of leadership on health of subordinates, or the results indicate that the role of leadership is inferior to other work related and demographic factors (Mazur & Lynch, 1989, Lubofsky, 2002, Bernin and Theorell, 2003). With the support of all these studies this quantitative study aims to measure the impact of leadership on employees performance and their health.

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[2010] Jan

Chapter 4: Data / Methodology 4.0: Tools of data collection In order to find data on performance of employees and their health, I will collect data on four Variables: Performance of employees and their health, Transformational leadership style, Democratic leadership style and Laissez Fair leadership style. For that the present study is quantitative in nature because I have used quantitative data which is collected through questionnaire. Then the first step of my study has been to make worth by the validity by using positivism approach. Positivism paradigm has been used in this study. It focused on understanding the ideology of multiple participants on their locations and Work place. •

The major benefit of the questionnaire is that we may collect the actual information based on our research through specific questions.

•

This method of data collection is also time saving. Weaknesses

Missing value is one of the demerits of the questionnaire.

4.1: Sampling Technique and Sample The Population of my study will be SMEs in which the sample size of 100 employees will taken for conducting the study by using simple random sampling in order to generalize the findings in the particular sector.

4.2: Measures In case of measuring Performance of Employees and their health, Leadership styles (Transformational style, Democratic style, and Laissez Faire Style) only questionnaire will be used. Participant data was obtained through in one survey with 5-point scale. Participant will ask a few questions. The survey contained a total of 13 questions and took approximately 10 to 15 minutes to complete. Measure for each variable is defined below:

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[2010] Jan

4.2 Methodology: When, I will collect the data from the participants then I will use the SPSS software for the analysis of the data. In this analysis, the test I will use define below: After putting the data into SPSS I will use Descriptive statistic to get the overall summary of the variables. In the table of descriptive statistic, the value shows of mean, Standard deviation and also the maximum and minimum values. These values define the response rate of the respondent. Then to get the graphical information about the variables, I will use the histogram with normal curve. Next, I will use the scatter plots to check the relationship of dependent variable independent variable is significant or not. After this for checking that the relationship is weak, moderate or strong between dependent variable and independent variable. In the last to check the value that how much change comes in dependent variable due to independent variable, I will use the Regress analysis.

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[2010] Jan

Chapter 5: Analysis This study has used the most common and famous statistical software in order to present results of survey. After defining the variables which are Performance of employees and their health, Transformational leadership style, Democratic leadership style and Laissez Fair leadership style. After putting the questionnaire data into SPSS total number of variable shown are 13. Then I utilize the “Compute” option in this software, after using this option finally we got three independent variable which are used in through out the study. 5.0: Data Screening: Data screening is use to check the information I get from the participants is accurate and find out the any missing value. After that I coded all returned questionnaires in to SPSS software for data analysis. After that I will use different test for analysis. Let’s discussed the detail of each variable one by one in the result portion. 5.1: Results: In this portion all the results with their interpretation were shown and being discussed one by one.

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[IMPACT OF LEADERSHIP STYLES ON EMPLOYEE’S PERFORMANCE AND THEIR HEALTH IN SMESECTOR] ] 5.1.0: Descriptive

[2010] Jan

Statistic: Descriptive Statistics N

Employee Performance and

Minimum

Maximum

Mean

Std. Deviation

100

2.20

4.20

3.4200

.41439

Transformational Style

100

2.75

5.00

3.7975

.52907

Democratic Style

100

2.67

5.00

3.9367

.59684

Laissez Fair Style

100

1.00

5.00

2.1000

1.11464

Valid N (listwise)

100

Health

Interpretation: The above table presents the descriptive statistics that show the overall picture of all the three independent and one is dependent variable. The data has been taken from 100 participants. In the above table the mean values and the values of standard deviation of all the four variables have been shown. Mean value provides the idea about the central tendency of the values of a variable. For example if we observe the above output to assess the average response rate or the respondent then we come to know the mean of different variables like Employee Performance and Health (3.42), Transformational Style (3.79), Democratic Style (3.93) and the mean of Laissez Fair Style is (2.10). Standard deviation gives the idea about the dispersion of the values of a variable from its mean value. So, if we observe then in the response rate for the variable Transformational Style value of standard deviation is (0.52) which is the lowest value as compare to other independent variables value. But if we observe the value of Laissez Fair Style is (1.11) which is quite high as compare to other independent variable.

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[2010] Jan

5.1.1: Histogram: Figure 1.0

Interpretation: The figure 1.0 reflects the graphical representation of the bars is showing the response of the respondents related to Employee Performance and Health. The maximum response of the value relies between 3.5 and 4 which means neutral and agree respectively. The minimum value relies between 1 and 2 which means that least employees are disagree about the affect of leadership style on employee performance and his health. And the bars are not normally distributed. Because the curve is from right to left, the maximum values are in right side.

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[IMPACT OF LEADERSHIP STYLES ON EMPLOYEE’S PERFORMANCE AND THEIR HEALTH IN SMESECTOR] ]

[2010] Jan

Histogram: Figure 1.1

Interpretation: The figure 1.1 reflects the graphical representation of the bars is showing the response of the respondents related to Transformational Style. The maximum response of the value relies between 4 and 4.5 which means agree and near to Strongly agree respectively. The minimum value relies between 1 and 3 which means that least employees are disagree about the affect of transformational style on employee performance and his health. And the bars are just normally distributed. Because the curve is in the approximately in middle.

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Histogram: Figure 1.2

Interpretation: The figure 1.2 reflects the graphical representation of the bars is showing the response of the respondents related to Democratic Style. The maximum response of the value relies between 4 and 5 which means agree and Strongly agree respectively. It means most of the people are agree that democratic leadership style mostly affect the employee performance and his health. The minimum value relies between 1 and 3 which means that least employees are disagree about the affect of Democratic style on employee performance and his health. And the bars are not normally distributed.

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Histogram: Figure 1.3

Interpretation: The figure 1.3 reflects the graphical representation of the bars is showing the response of the respondents related to Laissez Fair Style. The maximum response of the value relies between 1 and 2which means strongly disagree and disagree respectively. It means most of the people are strongly disagree that Laissez Fair leadership style do not affect the employee performance and his health. The minimum value relies between 4 and 5 which means that least employees are agree about the affect of Laissez Fair style on employee performance and his health. And the bars are not normally distributed. Because bars are from left to right the maximum value lies in the left side.

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5.1.2: Scatter Plots: Figure 1.0

Interpretation: Figure 1.0 shows the results of scatter plot matrix where we intend to have some idea about the relationship between Employees Performance & Health and Transformational style of leadership. If we observe then the flow of line is come from left to right which shows the negative relationship between Employees Performance & Health and Transformational style of leadership.

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Figure 1.1

Interpretation: Figure 1.1 shows the results of scatter plot matrix where we intend to have some idea about the relationship between Employees Performance & Health and Democratic style of leadership. If we observe then the flow of line is come from right to left which shows the positive relationship between Employees Performance & Health and Democratic style of leadership.

Figure 1.2

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Interpretation: Figure 1.2 shows the results of scatter plot matrix where we intend to have some idea about the relationship between Employees Performance & Health and Laissez Fair style of leadership. If we observe then the flow of line is come from right to left which shows the positive relationship between Employees Performance & Health and Laissez style of leadership.

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5.1.3: Correlations Table 1.0 Descriptive Statistics Mean Employee Performance and Health Transformational Style

Std. Deviation

N

3.4200

.41439

100

3.7975

.52907

100

Table 1.1 Correlationsa Employee Performance

Transformational

and Health

Style

Employee Performance and Pearson Correlation Health

Sig. (2-tailed)

Transformational Style

Pearson Correlation

1

-.103 .306

Sig. (2-tailed)

-.103

1

.306

a. Listwise N=100

Interpretation: According to this table the Mean and Standard deviation in Employees Performance and health is 3.42 and .41 respectively. And in Transformational style the mean and standard deviation is 3.79 and 0.52 in the same sequence. The table 1.1 is representing the correlations between the Employees Performance and health and Transformational style. The value given of r= -0.103 which shows the negatively correlated and the value of p= 0.306 which is greater than significance level of 0.05. So we will accept Ho and reject H 1 that means the relationship between both the variables is not significance. Now we see that the relation is weak, moderate or strong. For this purpose we take the value of Pearson correlation. In the above correlation table the Pearson value between Employees Performance and health and Transformational style is -0.103 which is less than 0.33, it shows the weak relationship between these two variables. Correlation:

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Table 1.2 Descriptive Statistics Mean Employee Performance and Health Democratic Style

Std. Deviation

N

3.4200

.41439

100

3.9367

.59684

100

Table 1.3 Correlationsa Employee Performance and Health Employee Performance and Pearson Correlation

Democratic Style 1

Health

Sig. (2-tailed)

Democratic Style

Pearson Correlation

.527*

Sig. (2-tailed)

.040

.527* .040 1

a. Listwise N=100

Interpretation: According to this table the Mean and Standard deviation in Employees Performance and health is 3.42 and .41 respectively. And in Democratic style the mean and standard deviation is 3.93 and 0.59 in the same sequence. The table 1.3 is representing the correlations between the Employees Performance and health and Democratic style. The value given of r= 0.527 which shows the positively correlated and the value of p= 0.040 which is less than significance level of 0.05. So we will reject Ho and accept H1 that means the relationship between both the variables is significance. Now we see that the relation is weak, moderate or strong. For this purpose we take the value of Pearson correlation. In the above correlation table the Pearson value between Employees Performance and health and Democratic style is 0.527 which is greater than 0.33 and less than 0.67, it shows the moderate relationship between these two variables.

Correlation:

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Table 1.4 Descriptive Statistics Mean Employee Performance and Health Laissez Fair Style

Std. Deviation

N

3.4200

.41439

100

2.1000

1.11464

100

Table 1.5

Correlationsa Employee Performance

Laissez Fair

and Health

Style

Employee Performance and Pearson Correlation

1

Health

Sig. (2-tailed)

Laissez Fair Style

Pearson Correlation

.035

Sig. (2-tailed)

.730

.035 .730 1

a. Listwise N=100

Interpretation: According to this table the Mean and Standard deviation in Employees Performance and health is 3.42 and .41 respectively. And in Laissez Fair style the mean and standard deviation is 2.10 and 1.11 in the same sequence. The table 1.5 is representing the correlations between the Employees Performance and health and Laissez Fair style. The value given of r= 0.035 which shows the positively correlated and the value of p= 0.730 which is greater than significance level of 0.05. So we will accept Ho and reject H 1 that means the relationship between both the variables is not significance. Now we see that the relation is weak, moderate or strong. For this purpose we take the value of Pearson correlation. In the above correlation table the Pearson value between Employees Performance and health and Laissez Fair style is 0.035 which is less than 0.33, it shows the weak relationship between these two variables.

5.1.4: Regression

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Table 1.0 Variables Entered/Removedb

Model 1

Variables

Variables

Entered

Removed

Method

Laissez Fair Style, Democratic

. Enter

Style, Transformational Stylea a. All requested variables entered.

b. Dependent Variable: Employee Performance and Health

Table 1.1 Model Summary

Model

R .110a

1

Adjusted R

Std. Error of the

Square

Estimate

R Square .012

-.019

.41827

a. Predictors: (Constant), Laissez Fair Style, Democratic Style, Transformational Style

Interpretation: In above table we can see the change in dependent variable due to change in independent variable. We can calculate this change easily by multiplying the value of Adjusted R square with 100 the result will shown in % which is the change ratio. For this case value of R square is .012 X 100 = 1.2 which means the 1.2% change in Employees Performance and health because of independent variable.

Table 1.2

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ANOVAb Model 1

Sum of Squares Regression

df

Mean Square

F

.205

3

.068

Residual

16.795

96

.175

Total

17.000

99

Sig. .390

.761a

a. Predictors: (Constant), Laissez Fair Style, Democratic Style, Transformational Style b. Dependent Variable: Employee Performance and Health

Interpretation: Multiple regression is used to investigate how leadership style affects the Employees Performance and health in services industries. The above table show the value of F value which is ..390 and the value of P = .761. Which shows that relationship is not statistically significant.

Table 1.3 Coefficientsa Standardized Unstandardized Coefficients Model 1

B

Std. Error

(Constant)

3.629

.416

Transformational Style

-.080

.080

Democratic Style

.020

Laissez Fair Style

.008

Coefficients Beta

Sig.

8.731

.000

-.102

-.997

.321

.071

.029

.081

.039

.038

.020

.198

.843

a. Dependent Variable: Employee Performance and Health

Interpretation:

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Coefficient table presents the results of the regression analysis. The objective of the regression in this study is to find such an equation that could be used to find the impact of leadership style on Employees Performance and health. The specified regression equation takes the following form: Employees Performance and health = C + B (Transformational style) + B (Democratic style) + B (Laissez Fair)

If we Separately solve the equation then: Employees Performance and health = C + B (Transformational style) Employees Performance and health = 3.629 – 0.080 Employees Performance and health = 3.549 3.55 % Employees Performance and health affected by Transformational style. Employees Performance and health = 3.629 + 0.020 (Democratic style) Employees Performance and health = 3.649 3.65 % Employees Performance and health affected by Democratic style. Employees Performance and health = 3.629 + 0.008 (Laissez Fair) Employees Performance and health = 3.637 3.637 % Employees Performance and health affected by Laissez Fair These values shows that the exact percentage of independent variables which affect the dependent variable.

Chapter 6:

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Discussion 6.0: Overall Discussion: The major purpose of this study is to identify the most effective Leadership style to increase the performance of employees and their health, different tools have been used in order to fulfill the requirements of the research. Findings after statistically analyzing the data are discussed here in detail. First of all the table of Descriptive statistics is presented which is showing the values for means, std. deviation and maximum and minimum values from respondents. The overall findings for this table is that mostly values in Mean table are close to 3 and 4 which means that most of the respondents are strongly agree and some are agree with the assumptions that training raise the performance of employees. The highest value is noted for democratic style showing the mean which is 3.93 near to agree on the other hand the lowest value of mean in laissez fair is 2.10 more close to disagree option. After descriptive statistics I used histogram which graphically

presenting the response of the

employees to the questionnaire. This graph Is telling that democratic leadership style has more impact on employees and develop their performance. Then I use scatter plot to check the relationship between dependent and independent variable , whether it is positive or negative. I have applied separate scatter plot for each pair of variable to make understanding easier and understandable. In order to check the relationship between dependent and independent variables, the correlation test has been used. The findings from this table is shown there is positive relationship between performance of employees and health with democratic leadership style. In last I have used multiple regression to find out the exact percentage of change in dependent variable due to independent variable. The coefficient table presents the results of the regression analysis. The objective of the regression in this study is to find such an equation that could be used to find what is the best method of training to increase the performance of employees. This is the main purpose to use this analysis it provide more realistic values and data by which we can easily asses that what is change in dependent variable due to independent variable. I got the significance value of democratic style is 0.039 that is less than 0.05. which means there is association of performance of employees and their health with democratic style.

6.1: Conclusion:

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The aim of this study is to find out the best leadership style that can fully help to increase the performance of the employees. Past researchers have mostly focused on impact of just training on performance. This study is focusing on the styles of the leaders, so that the leaders can adopt the style than may leads the performance of the employees at the maximum level. After analyzing all the statistical data I found that democratic style has more affect on employee performance as compare to the other variables. So the purpose of my study is fulfilled that which leadership style is better to increase employee performance. According to (Daniel Goleman in 2002) The democratic leadership style is able to quickly build flexibility and responsibility and can help identify new ways to do things. On the other hand, the participative democrat relies on group consensus to make decisions to raise performance. (John Kotter). Secondly the transformational leadership style is also has good impact on the performance of employees. The demerit of my research is that I have collected so limited data from the SME sector and furthermore I will expand my study by switching to the multinational companies and also include other leadership styles.

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The copyright of the article Transformational Leadership in Business Management is owned by Mitch McCrimmon. Permission to republish Transformational Leadership in print or online must be granted by the author in writing. http://businessmanagement.suite101.com/article.cfm/transformational_leadership#ixzz0gQKj jI1X

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