EMPLOYER LEADERSHIP STYLES INFLUENCING THE JOB PERFORMANCE

OF EMPLOYEES IN SMALL-SCALE BUSINESSES

Regino Ruiz A. Delos Santos
Marie Frances P. Espejo
Maria Sophia Allyson E. Guzon
Marcus Galo A. Labos
Ethan Jungmin Lee
University of Baguio Science High School
INTRODUCTION
One of the most important factors in a business is their employees. As stated by Leonard
Kimberlee (2019), employees are needed by business owners because employee performance is
critical to the overall success of the company.

The most important aspect that must be taken into consideration when talking about a
business is the performance, not just the performance reaching the highest level but considering
the performance more of a challenge; it gives the business continuous development and continuous
increase of the market standards (Voslobana, 2012). The key to achieving goals of the organization
and staying competitive is employee performance. The critical component in any organization is
the employee; and by improving the employee’s performance at the workplace, organizations can
successfully compete, (Altrasi, 2014). Every employee has a unique collection of values and
beliefs usually based on national and cultural norms (Al-Malallah & Regondola, 2014). These
unique values and beliefs play an important role in their performance. Apart from the above factor
there are several different factors that can affect an employee’s performance at the workplace
(Iqbal, Thao & Hwang, 2015).

A survey from Kingdom of Saudi Arabia (KSA) was collected from 200 employees
occupying different positions in their respective organisations. The organisations surveyed are of
different sizes, activities, ownership and come from different regions of the KSA. Results showed
that effective performance appraisal is a significant predictor of employee productivity, whereas
job satisfaction is not a significant predictor of employee productivity. The fact that findings from
this study contradict findings from research in other countries is due to the unique working
environment in KSA, (Al-Kwifi & Sam, 2015).

According to Divina (2007) there are a number of reasons cited in the survey as to why
human resource development is important in the Philippine companies, and it is realized that the
value of “improvement of job performance” (95.83%), tops the list and the other more frequently
identified values of the importance of human resource development from a bigger bulk of the
firms. Other values are: “helps improve and acquire technical skills'' (91.67%), “develops
creativity and problem solving skills” (89.17%), “helps retain a competent and efficient
workforce” (89.17%), “helps achieve overall organizational objectives” (88.33%), and
“contributes to flexibility in order to adapt to changes” (80.83%). But the information shows most
of the companies in the Philippines still have a lot of problems concerning HRM, and the managers
do not realize the importance of having efficient manpower and improving HR as one of the key
elements of being successful to achieve their targets in any organization like the construction
industry. Particularly, most organizations have insufficient knowledge on how to promote their
employees according to their needs by proper methods and practices as training and motivation.

A similar study that was conducted in India with the title “Factors Affecting Employee
Performance: A Conceptual Study on the Drivers of Employee Engagement”. This is about
employee engagement, as a concept, has been gaining significance since the past 10 years.
Organizations today consider engaged employees as strategic partners in their businesses. The
concept of employee engagement has now gained even more prominence, since many drivers have
been identified, which impact employee performance and well-being at the workplace (Pandita D.,
Madhura B., 2015).

Therefore, the researchers were inspired by their idea of the connection of employee
engagement to employee performance. Although the people who were targeted in this study are
not specific.

A study from the Arabian Journal of Business and Management Review titled as “Effect
of Autocratic, Democratic, and Participative Leadership Styles on Employee Performance” to
understand the effect of different leadership styles autocratic, democratic, and participative style-
on employee performance. At the end it was concluded that the autocratic leadership is useful in
the short term and democratic leadership style is useful in all time horizon. And participation
leadership style is most useful in long term and effect on employees is positive. At end some
recommendations are discussed.

(ADD 1 MORE STUDY HERE)

Therefore, to contribute to the trend of factors affecting employee performance, the

researchers will conduct a study about the effects of the most common leadership styles
(Democratic Leadership, Autocratic Leadership, Strategic Leadership, Transformational
Leadership, Transactional Leadership) of employers and how it affects their employee’s
performance.

Theoretical Framework

Leadership is a process of interaction between leaders and followers where the leader
attempts to influence followers to achieve a common goal (Northouse, 2010; Yukl, 2005).
According to Chen and Chen (2008), previous studies on leadership have identified different
types of leadership styles which leaders adopt in managing organizations. Democratic leadership,
also known as participative leadership or shared leadership, is a type of leadership style in which
members of the group take a more participative role in the decision- making process, this type
of leadership style can apply to any organization, from private businesses to schools to
government. Everyone is given the opportunity to participate, ideas are exchanged freely, and
discussion is encouraged. While the democratic process tends to focus on group equality and the
free flow of ideas, the leader of the group is still there to offer guidance and control. The
democratic leader is charged with deciding who is in the group and who gets to contribute to the
decisions that are made, (Cherry, 2020).
Autocratic leadership is vital in many workplace environments. This style is necessary
within organizations and companies that demand error-free outcomes. While autocratic
leadership is one of the least popular management styles, it’s also among the most common. The
autocratic leadership process generally entails one person making all strategic decisions for
subordinates. Although it has fallen out of favor in recent decades, the autocratic leadership style
is still prevalent. Autocratic leaders often view themselves like automobile engines that drive
people under their tutelage or command, whether it’s a mayor of a large city, a company CEO or
an agency director. It may seem incongruous to think of autocratic leaders as self-driven. But if
their role in business, government or other organizations is to drive others to perform at their best
and accomplish tasks without making mistakes, then the description is appropriate.
Strategic leadership refers to a manager’s potential to express a strategic vision for the
organization, or a part of the organization, and to motivate and persuade others to acquire that
vision. Strategic leadership can also be defined as utilizing strategy in the management of
employees. It is the potential to influence organizational members and to execute organizational
change. Strategic leaders create organizational structure, allocate resources and express strategic
vision. Strategic leaders work in an ambiguous environment on very difficult issues that
influence and are influenced by occasions and organizations external to their own, (Juneja, 2015)
Transformational leadership is a leadership style in which leaders encourage, inspire and
motivate employees to innovate and create change that will help grow and shape the future
success of the company. This is accomplished by setting an example at the executive level
through a strong sense of corporate culture, employee ownership and independence in the
workplace. Transformational leaders inspire and motivate their workforce without
micromanaging — they trust trained employees to take authority over decisions in their assigned
jobs. It’s a management style that’s designed to give employees more room to be creative, look
to the future and find new solutions to old problems. Employees on the leadership track will also
be prepared to become transformational leaders themselves through mentorship and training,
(White, 2018).
A transactional leader is someone who values order and structure. They are likely to
command military operations, manage large corporations, or lead international projects that
require rules and regulations to complete objectives on time or move people and supplies in an
organized way. Transactional leaders are not a good fit for places where creativity and
innovative ideas are valued. Transactional leadership is most often compared to transformational
leadership. Transactional leadership depends on self-motivated people who work well in a
structured, directed environment. By contrast, transformational leadership seeks to motivate and
inspire workers, choosing to influence rather than direct others, (St. Thomas University, 2018).
Paradigm of the Study
Significance of the Study
This research has been held in Baguio City. The intention of this research work is to show
how the leadership style of the employer affects the employee. There is wide trend to invest in
human capital, so employees show more performance, but it is strongly professed that these
practices are totally disregarded, so research is the only key to locate the reality, reason and way
out. These variables are carefully chosen from literature and used in local setting. The data has
been collected from respondents of the related fields. The following quantitative techniques have
been used: regression analysis, descriptive statistics, frequency polygons, bar charts, and
correlation analysis.
It is expected that this research work will be beneficial in terms of theoretical, management
and academic sides.
Objective of the Study
Consistent with this, the present study intends to examine the relationship between
leadership styles and job satisfaction in the public sector. Five types of leadership styles are
examined, namely, Democratic Leadership, Autocratic Leadership, Strategic Leadership,
Transformational Leadership, Transactional Leadership. The specific objectives of the study are:
i) To determine the relationship between aspects of transactional leadership such as
contingent reward, active management by exception and passive management by
exception with job satisfaction among employees in small businesses.
ii) To examine the relationship between aspects of the different types of leadership such
as idealized influence, intellectual stimulation, individual consideration and
inspirational motivation with job satisfaction among employees in small businesses.
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