The Impact of Leadership Styles on Employee Performance: Analysis of Intervening Effect of Employee Retention to the Relationship of Leadership Styles and Employee Performance

Abstract

Nowadays, organizations are operating in highly competitive environment. Effective leadership style requires for managing the organization successfully. The organizational success depends on its leadership styles and effectiveness of its employees. The effectiveness of individual employee’ performance depends on the leader/supervisor. Effective leader can enhance the individual employee performance through proper leadership style and retain high performance and talent employees within the company because he knows that high performance employees are unique resources of the organization. Based on the culture and nature of organization, leaders are applied suitable leadership styles. The behavior of leader is very importance to improve job performance and retain skillful employees for longer period in the organization. According to the problems or situations they face, leader needs to apply proper leadership styles. In some situations, employees leave the manager, not the organization. However, there are some other factors such as job satisfaction, flexible working environment, work life balance, work environment and career development opportunities. This paper identifies the impact of autocratic, democratic and laissez - faire leadership style on retention and job performance of employees. The purpose of this research was to investigate how leadership styles impact on employee retention and job performance. In this study, three main variables consist in conceptual framework. They are independent variables (autocratic leadership style, democratic leadership style and laissez -faire leadership style), intervening variable (retention) and dependent variable (individual employee performance). A sample of 150 respondents has been randomly selected from the D.G Fashion Garment (Pvt) Ltd., of Sri Lanka. Sample was selected by using simple random method and primary data was collected through structured questionnaires. Respondents were asked to indicate their preference on five point Likert scale. Data analysis was conducted by using Statistical Package for Social Sciences (SPSS 13.0) by using the statistical technique such as Cronbach alpha, mean, mode, variance, standard deviation, correlation and regression analysis. Graphs and tables were also used for data presentation.