Leaders for the Banking Industry: An Investigation on Effective Leadership
Leadership is critical in achieving performance in everywhere. Therefore studies on leadership is yet not exhorted, keeping scholars to uncover more finding on effective leadership styles. This study expected to identify the effective leadership style for employee performance in banking industry in Sri Lanka. Banking industry having is unique work environment which stresses performance targets, long working hours, and error free transactions while making the customers happy. This situation is quite difficult to the employees unless they are provided with superior inducements. Thus leadership, as a critical stimuli to the employees, this study focused on finding the effective leadership style for enhanced employee performance.The main objective of this study was to examine the effect of transformational and transactional leadership styles on employees performance. A cross section descriptive survey research strategy was implemented in which 80 usable structured questionnaires were collected. In inferential statistics, Pearson’s correlation and regression analysis were used to evaluate both relationships and effects as per the hypotheses of the study.The findings illustrate that transformational leadership style is the most present style among the bankers in Sri Lanka and employee performance is above average with transformational leaders. Overall, scores in transformational leadership style were found to be strongly correlated with employee performance. The results suggest that supervisors in banking sector need to use a lot of transformational leadership behaviours or rather embrace transformational leadership style. The implications of the study is significant in HR practices like recruiting and training bank managers as leaders in banking sector.
Keywords - Leadership Style, Transformational Leadership, Transactional Leadership, Employee Performance