The Managers’ Autocratic Leadership Style and Performance of Employees in Commercial Banks

Kavishemi, S

Assistant Lecturer, Department of Management, Faculty of Commerce and Management, Eastern University, Sri Lanka. 

Abstract

This study’s primary goal is to look into the relationship between autocratic, leadership style and employees’ performance in commercial banks in the Eastern Province. 250 workers from 559 commercial banks in the Eastern Province replied for this study. Additionally, the researcher designs the sample using a simple random sampling procedure. Five Point Likert structured questionnaire was used as the data gathering tool. The performance of the employees was taken as the dependent variable and the autocratic leadership style was considered as independent variable. Univariate and correlation analysis were also performed on the obtained data using the SPSS version 23 software. The results indicated that, there is medium positive correlation between autocratic leadership style and employee performance. 

 

Keywords: Autocratic leadership style, Employees’ performance

 

INTRODUCTION

Major managerial changes are being emerged in various organizations for ensuring their sustainability in the challenging world. In this perspective, manager needs to be competent person to manage these changes. Managers’ jobs are complex and varied, and they require a certain set of talents to carry out their responsibilities. It is impossible to overstate the significance of leadership in companies. The idea is important much as it affects an organization’s effectiveness and sustenance in the present and the future (Makambe & Moeng, 2020). 

 

Leadership style plays a crucial role in administration since the way in which the manager uses the resources under their control to achieve goals is crucial (Adeyemi, 2004). In essence, these successes in organizations depend on three distinguishable leadership styles (Lunenberg & Ornstein, 1991). Therefore, there is no question that bank managers in the Eastern Province are under increasing pressure from different leadership styles. However, it appears that a lot of managers do not think about their leadership styles as factors in branch manager performance. The results of this study will help bank managers and community members everywhere improve leadership techniques in their workplaces. It will result in a positive effect on employees’ performance. It has been determined that managers are a key factor in the banks’ ongoing development, and as a result, the wellbeing of societies can also be strengthened through time. Leadership style is a leader’s approach to providing direction, implementing plans, and motivating people. Lewin (1939), determined that there were three basic leadership styles: Authoritarian (Autocratic), Participative (Democratic) and Delegative (Laissez-Faire). 

 

In this situation, banks must build successful leadership using the right leadership styles. Different leadership styles have been implemented at the chosen banks, however this has led to conflict between managers and employees and, in some cases, a demotivation of workers. While some employees were resistant to various leadership styles because they didn’t understand how the styles affected employee performance, some managers opposed the adoption of certain leadership styles because they thought they diminished their authority. When compared to other banks, certain banks’ employees perform exceedingly poorly. As we have taken Eastern Province almost all there is no considerable insights or other reasons that affect employees’ performance, the substantial reason is bank managers’ leadership styles. There are insufficient number of studies that observe the relationship of the variables in the specialized context of banking sector. This indicates there is a clear empirical gap exists in this topic that needs to be evaluated. In Sri Lankan context, there are no studies regarding the managers’ autocratic leadership styles and Performance of Employees in Commercial Banks in The Eastern Province. This show there is a population gap in the related topic. Therefore, the study attempts to achieve the objectives below;

·      To determine the level of autocratic leadership style of managers and performance of employees in commercial banks in the Eastern Province

·      To identify the significant relationship between the autocratic leadership style of managers and performance of employees in commercial banks in the Eastern Province.

 

LITERATURE REVIEW

Autocratic Leadership Style: The terms “autocratic” and “authoritarian style” both refer to the kind of rulers who demand quick compliance without question (Iqbal, Anwar & Haiden, 2015). A system that fully empowers the leader while requiring little from the followers is known as an autocratic leadership style. According to Portugal & Yukul (1994), authoritarian leaders frequently exhibit the following five traits: They don’t consult the rest of the group while making decisions, the leaders decide all policies, how work will be done, what the followers’ responsibilities will be, and how technical and performance evaluation will be done. The authoritarian leadership style is another name for the autocratic leadership style, in which the leader has complete control over all decisions. The group’s leader instructs the members of the group on how to carry out tasks but does not keep open lines of communication with them. He or she neither delegated power to others nor allowed subordinates to influence policy (John, 2002).

 

Employee Performance: Performance is an important assessment for companies so that the company’s sustainability can be guaranteed (Zhang, 2010). Employee performance includes behavior that is under control but provides limits for irrelevant behavior. Meanwhile, the performance also assesses the active role of employees in carrying out obligations according to the formal contract given to them by the company (Biswas, 2009).  

 

Manager: The manager is the center of power in this arrangement, and they are the only ones with the authority to decide on policies, practices, work assignments, and the administration of rewards and punishments (Mullins & Syam, 2014). Managers are members of an organization that either oversee one team or numerous teams in order to plan activities and boost productivity. Even if they aren’t senior leadership or executives, they effectively manage their teams to interpret and carry out senior leadership agendas (Risher, 2010).

 

CONCEPTUAL FRAMEWORK

Figure 1: Conceptual Framework

Performance of Employees

Autocratic Leadership Style

 

Independent Variable                                      Dependent Variable

 

 

 

(Source: Basit et al., 2017)

 

RESEARCH METHODOLOGY

250 employees of commercial banks in the Eastern Province were surveyed using a standardized questionnaire to get primary data about their performance and the management style. Three categories are covered in the questionnaire: personal traits, leadership style, and employees’ performance. The questionnaire was also written in English.

 

Part I of the questionnaire asks for personal information, and Parts II and III ask for research-related information. Gender, civil status, the number of family members, and service years are all listed in Part I. Parts II and III discuss the study variables, autocratic leadership style and employee performance, respectively. Data were gathered by closed-ended statements, and the degree of agreement was determined using a 5-point Likert scale from 1 to 5 from each client’s perspective. According to the Likert scale, respondents’ levels of agreement with the following statements:

            1 – Strongly Disagree

            2 – Disagree

            3 – Neutral

            4 – Agree

            5 – Strongly Agree

 

In this study, the Cronbach’s Alpha Coefficient (CAC) has been used for analyzing the reliability instrument. In order to achieve the objectives of the study, this has employed univariate and bivariate analysis to analyze the collected data in SPSS.

 

 

RESULTS AND DISCUSSION

Authoritarian leadership style is also common in the banks of the Eastern province (MV=2.38914, SD=0.27426). This demonstrates that in some circumstances in the Eastern Province’s banks, authoritarianism is pervasive. Correlation (r) between autocratic leadership style and employees’ performance is 0.415 and significance at 0.01 levels (2-tailed) is 0.000. It is concluded that there is a medium positive relationship between autocratic leadership style and employees’ performance in Commercial Banks in Eastern Province. 

 

According to David & Obadia (2017), authoritarian leadership is acquired by punishment, threat, demands, instructions, rules, and regulations. Authoritarian followers’ responsibilities include blindly and unquestioningly carrying out their leader’s orders. The duties of an authoritarian leader include the creation of unilateral rules, work delegation, and issue solving. Authoritarian leadership is acceptable when there is a constant influx of new employees, when there aren’t enough resources or time to make decisions, and when there is a need for close collaboration with other groups and organizations. Having an autocratic leadership style has little effect on how well staff in commercial banks in the Eastern Province perform. Due to the managers’ limited ability to control large groups of people, the employees’ familiarity with the banking environment, and the employees’ long-term employment up until retirement from service. 

 

CONCLUSION

Autocratic leadership styles offer structure to organizations, establish clear rules, and can streamline communications. People who work under an autocratic leader will know exactly who to talk to and who they should ask for approval. Not only can this lead to improved organizational efficiency, it can enhance accountability. The style of autocratic leadership has obstructive impact on employee performance. This means the productivity of workers would not increase by adopting an autocratic strategy. In addition to it; employees who are now becoming more knowledgeable, independent and competent can no longer accept autocratic leadership style.

 

 

 

LIST OF REFERENCES

Adeyemi, T.O. (2004). Educational Administration, an Introduction, Ado-Ekiti Green line Publishers.

Basit, A., Sebastian, V., & Hassan, Z. (2017). Impact of leadership style on employee performance (A Case study on a private organization in Malaysia). International Journal of Accounting & Business Management, 5(2), 112-130.

Biswas, S. (2009). HR practices as a mediator between organizational culture and transformational leadership: Implications for employee performance. Psychological Studies, 54, 114-123.

David A. O. Aunga and Obadia Masare (2017) Effect of leadership styles on teacher’s performance in primary schools of Arusha District Tanzania. International Journal of Educational Policy Research and Review 4(4), 42-52 Retrieved from ://www.journalissues.org/IJEPRR/https://doi.org/10.15739/IJEPRR.17.006 ISSN 2360-7076, retrieved on June 2017.

Iqbal, N., Anwar, S., & Haider, N. (2015). Effect of leadership style on employee performance. Arabian journal of business and management review, 5(5), 1-6.

John, C.M. (2002). Million leaders Mandate. Notebook one. Equip Publishers, America.

Lewin, K., Lippitt, R., & White, R. K. (1939). Patterns of aggressive behavior in experimentally created “social climates”. The Journal of social psychology, 10(2), 269-299.

Lewin, K., Lippitt, R., & White, R. K. (1939). Patterns of aggressive behavior in experimentally created “social climates”. The Journal of social psychology, 10(2), 269-299.

Lunenberg, F.C. & Ornstein, A.C. (1991). Educational Administration Concepts and Practices.Belmont, C.A.: Wadworth. 

Makambe, U., & Moeng, G. J. M. (2020). The effects of leadership styles on employee performance: a case of a selected commercial bank in Botswana. Annals of Management and Organization Research, 1(1), 39-50.

Mullins, R., & Syam, N. (2014). Manager–salesperson congruence in customer orientation and job outcomes: The bright and dark sides of leadership in aligning values. Journal of Personal Selling & Sales Management, 34(3), 188-205.

Portugal, E., & Yukl, G. (1994). Perspectives on environmental leadership. The Leadership Quarterly, 5(3-4), 271-276.

Risher, H. (2010). Don’t overlook frontline supervisors. Public Manager, 39(3), 74.

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