The Relationship between Effective Leadership and Employee Performance

Abstract

Leadership has drawn great attention from scholars in various fields in the recent years. The present work, however, focus on the transformational, transactional and laissez‐faire leadership model and the relationship between these leadership styles and employee performance. The study is a comparison between selected public and private sector enterprises and the data comprises of 43 middle‐level managers and 156 subordinates. The paper looks first at various factors that add to the effectiveness of leadership through Garrett scores. It then discusses whether there is any differences in the leadership choice between the public and private sector enterprises. Finally, the relationship between transformational, transactional, laissez‐faire leaderships and employee performance is explored through correlation and regression analysis. The results are likely to suggest that leaders must have the ability to attract / influence their subordinates, be able to set clear standards of performance to their peers and act as a best role model to the subordinates. The subordinates expect that their achievements must be recognized and rewarded either with monetary or with non‐monetary terms. The Garrett’s score that gives the preferences of the Middle level managers and the subordinates from among various leadership styles recommended the transformational leadership style in both the public and in the private sector enterprises. The results of correlation and regression analysis suggests that the transformational leadership style has significant relationships with performance outcomes; The study thus adds some additional knowledge for a better understanding of the preferred leadership approach and appropriate style for use with subordinates in various professional levels.