Leadership Affects On Employee

[IMPACT OF LEADERSHIP STYLES ON EMPLOYEE’S PERFORMANCE AND THEIR HEALTH IN SMESECTOR] [2010]
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A THESIS ON
IMPACT OF LEADERSHIP STYLES ON EMPLOYEE’S

PERFORMANCE AND THEIR HEALTH IN SME SECTOR
A Thesis Submitted to the
Superior University
In Partial Fulfillment of the Requirements for the Degree of
Master in Business Administration
By
Waqas Sikander
2010
1 Superior University Lahore

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Declaration of Originality
I hereby declare that this project is entirely my own work and that any additional sources of
information have been duly cited.
I hereby declare that any Internet sources published or unpublished works from which I have
quoted or draw references fully in the text and in the content list. I understand that failure to
do this will result in failure of this project due to plagiarism.
I understand I may be called for viva and if so must attend. I knowledge that this is my
responsibility to check whether I am required to attend and that I will be available during the
viva periods.
Signed….……………………………………………….
Date……………………………………………………...
Name of Supervisor……..……………………………….

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ABSTRACT
This study has examined the different leadership styles on employee’s performance and their
health in Pakistan. The primary focus of this study is to investigate the impact of leadership
styles on employee performance and their health in SMEs. The study has used quantitative
approach to measure the impacts of leadership on performance. Data has been collected
through structured questionnaire in which respondents were asked close-ended questionnaire.
The present study finds out that the relationship between employee performance and health
with democratic style is statistically significance. It concludes that if the leader involves the
employees in decision making process, having friendly relationship with them and decrease
their stress at the workplace, he can maximum help in developing the performance.
Key Words: Transformational Style, Democratic Style and Laissez fair style.

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Acknowledgement:
I would like to thank the following persons without whose guidance this dissertation could
not have been completed.
First of all I would like to thank my Allah who always guides me in every sphere of my life.
Secondly, I am very thankful to the Prof. Nadeem Iqbal, Prof. Sofia Waleed and Miss.
khansa for her guidance and imminent the whole time in making my dissertation and
especially, her precious suggestions and comments that truly guided my research and also
helped me to structure my thesis.
Finally I am very thankful my friends and my parents particularly, who has always supported
me not only in completion this thesis but also supported me in whole of the MBA. I never
explained my parents support in words because it’s just a feeling which is not expressed in
words.
Table of Contents

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Authors’ Declaration of originality................................................................... I
ABSTRACT.......................................................................................................II
ACKNOWLEDGEMENTS.............................................................................III
Chapter 1: Introduction....................................................................................6
1.0 Introduction....................................................................................................6
1.1 Purpose statement..........................................................................................8
1.2 Objectives......................................................................................................9
1.4 Significance...................................................................................................9
1.3 Hypothesis...................................................................................................10
Chapter 2: Literature Review.........................................................................11
2.0 Literature Review........................................................................................11
2.1 Theoretical Model........................................................................................15
Chapter 3: Theoretical Framework...............................................................16
3.0 Theoretical Framework................................................................................16
Chapter 4: Data / Methodology......................................................................17
4.0 Tools of data collection...............................................................................17
4.1 Sampling technique and sample..................................................................17
4.2 Measure........................................................................................................17
4.3 Methodology................................................................................................18
Chapter 5: Analysis.........................................................................................19
5.0 Data screening.............................................................................................19
5.1 Results..........................................................................................................19
5.1.0 Descriptive statistics.................................................................................20
5.1.1 Histogram.................................................................................................21
5.1.2 Scatter Plot................................................................................................25
5.1.3 Correlation................................................................................................28
5.1.4 Regressions...............................................................................................31
Chapter 6: Discussion Conclusion..................................................................34
6.0 Discussion....................................................................................................34
6.1 Conclusion...................................................................................................35
References..........................................................................................................36

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1.0 INTRODUCTION AND BACKGROUND
There is an ongoing discussion about leadership styles and its impact on various aspects of
employee performance and their work-related health. It has been suggested that leadership
factors had an influence on the increasing work-related ill health, but these suggestions have
rarely been based on scientific studies. Although relationship between leaders and
subordinates has gradually been more focused, but it is still scientifically unclear as to what
extent and in what ways leaders influence the health of employees. The figure below
demonstrates how leaders may influence the health of employees.
The leader can be described as a possessor of the tools to create and change the structure and
culture within an organization. These prerequisites have been influenced managers’
leadership style, managers’ health and also legitimate the communication processes, feedback
and reward systems. According to Schein (1992) it is the middle- and low level managers
who primarily influence the subordinates, their stress and health outcomes. They execute and
determine the boundaries for the subordinates.
The European states have experienced structural changes in labor market and living
conditions during the last two decades, which are discussed as factors that may influence
health levels in populations (Theorell & Vogel, 2003).
The structural changes have led to new demands on employees’ flexibility and ability to
handle changes, which is referred to as a health risk (Aronsson & Sjögren,1994, Arnetz,
1996). There is no consensually agreed-upon definition of culture. Culture is variously
defined in terms of commonly shared processes: Shared ways of thinking, feeling and
reacting; shared meanings and identities; shared socially constructed environments; common
ways of interpreting how technologies are used; and commonly experienced events (House,
Wright & Aditya, 1997). It is almost self-evident and no surprise to common sense that
leadership possesses such power, as it is a social process itself and the social climate develops
as social process. Studies of different kinds have verified the role of leadership style for the
climate formation; correlation studies (EKvall and Arvonen 1984, EKvall, Frankenhaeuser
and Parr 1996), case-studies (tedgard 1987), action-research (Marrow, Bower and seashore
1967), and studies with experimental design (Litwin and Stringer 1968). Yet it is not
productive to include leadership in the climate concept and treat it as a special dimension of

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the climate alongside of other dimensions. James and jones (1974) opposed making
leadership style a part of the climate concept. They pointed out that “closeness of
supervision” is a “leadership process variables”, and that it should be treated as such; nothing
is to be gained by bringing it into the climate concept.
With the ever changing business landscape of more and innovative competitors, most service
firms recognize the need to introduce innovations and new technologies within their
organizational processes to stay in the market, or to retain their competitive advantage
compared to their rivals. One of the most often used models explaining technology
acceptance is the technology acceptance model (TAM) by Davis et al. (1989). It was the first
model to state that psychological factors, perceived usefulness and perceived ease of use of
the new technology, are central in influencing its use. Since the model allows for the addition
of external variables, numerous extensions have been made. These relate to technology-based
factors like perceived enjoyment and perceived attractiveness (Van der Heijden, 2003, 2004),
personal factors like personal innovativeness (Agarwal and Prasad, 1998, 1999), or
interpersonal factors like trust (Geffen et al., 2003). Also concrete management actions like
offering training and education, and organizational technical support have been shown to play
a role in influencing individual usage of innovations (Schillewaert et al., 2005). Less
attention, however, has been given to the influence of the overall leadership style in an
organization. We, therefore, extend TAM with two styles: transactional leadership and
transformational leadership. These concepts were developed by Burns (1978) on the basis of
observing political leadership, and extended by Bass (1985). Despite the fact that the styles
cannot be seen as opposite ends of a continuum (Avolio and Bass, 1991), they are different in
nature. We expect them to play similar roles in the context of technology acceptance, but via
different mechanisms.
In this observe, the responsibility of leaders, as well as their performance in increasing their
subordinates is above some question. Although more leadership styles introduced (eg.
transformational and transactional) but out of which some is more productive for increasing
subordinates performance and some is not more important. Effective leadership styles have
much solution for arising problem in the subordinates work and increasing their performance.
In fact, the performance of leaders, as with performance of employees in universal, is a build
in relation to diversity fundamental dimensions such as different leadership styles and
advance technology acceptance.

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With all these matters considering the main purpose of this chronological mixed methods
study is t investigate effective leadership styles that enhance subordinates performance in first
phase with intent of using this information in the second phase to generalize the findings. In
particular, most of the research exploring the different effective leadership styles relation
with the performance and also introduced innovative technology in the developing countries
& services and manufacturing companies.
The main purpose of this study is to investigate the different effective leadership styles. The
paper is structured as follows. First, a short literature overview is given on the concept of
leadership styles. Secondly, a conceptual framework is built by formulating hypotheses on
the effects of leadership styles and the employee’s performance and health. Thereafter the
empirical study is described and its results have been presented. Therefore, the present study
is aim to investigate the perceptions of leaders and subordinates performance in the small
medium and large organization in Pakistan and other countries using different leadership
styles.
1.1 PURPOSE STATEMENT (AIM OF INVESTIGATION)
For the purpose of higher performance of employees and subordinates we must use effective
leadership styles and leadership styles also important for the health of employees. Research
also described that effective leadership styles can enhance the productivity performance and
commitment with their job and organization. So the execution of leadership styles is one way
that with use of different leadership styles leaders can construct commitment and job
satisfaction of employees that increase their performance.
Therefore, aim of this quantitative study has been, in first to investigate and recognize the
impact of leadership styles on employee’s performance and health in small and medium
enterprises (SMEs) in Pakistan and to further investigate the different leadership styles that
increase employee’s performance among different leaders using structured questionnaire.

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1.2 OBJECTIVE OF THE STUDY
 To investigate leaders view on employees performance that how they perform good
quality and low quality and how leadership styles impact on their performance.
 To investigate leaders experiences about different leadership styles and how they feel
about these styles?
 To investigate leader’s opinion about employee’s health that contributes their

employee’s performance.
 To create the foundation for evolving effective and performance oriented leadership
styles.
1.3 SIGNIFICANCE OF THE STUDY
1. The present study has been significant in number of ways. It has been contributed to
the body of knowledge by: Firstly, since the present area is highly under researched in
Pakistan and developing countries. No study has been found to investigate the
leadership styles to increase employee’s performance and their health in Pakistan. So,
the present study supposes that the findings of the present study has been helped the
leaders in organization of Pakistan in particular and those in developing countries in
general to answer the long standing question of how to enhance leader’s performance.
In addition, the exclusive findings of the study may also help to understand the
difference between leadership styles in developed countries and those in under-
developed countries. It has been also strengthen the argument that since mass of the
research on the topic is conducted in developed countries and their findings cannot be
exactly applied in developing countries. Therefore, the present study has been
contributed in the literature of leadership styles that impact on employee’s
performance and their health. Thus, has been represented the situation of developing
country like Pakistan especially the organizational secretor.

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2. Secondly, no research has been found on leadership styles, employee’s performance

and satisfaction especially in Pakistan.
3. Subordinates who are not committed and satisfied with the leadership styles may
likely to put less effort in the organization field as compared to the employees with
the high level commitment and satisfaction.
4. Although, the present study has been aim to provide guidelines to leaders to
understand how employees perform better.
5. Therefore identifying those leadership styles that tend to enhance commitment and
satisfaction which leads to employees performance would be a significant bane fit for
the organization.
1.4: Hypothesis
Hypothesis 1:
H1: there is relationship of Employee Performance and their Health with Transformational
style.
H0: there is no relationship of Employee Performance and their Health with Transformational
style
Hypothesis 2:
H1: there is relationship of Employee Performance and their Health with Democratic style.
H0: there is no relationship of Employee Performance and their Health with Democratic style
Hypothesis 3:
H1: there is relationship of Employee Performance and their Health with Laissez fair style.
H0: there is no relationship of Employee Performance and their Health with Laissez fair style

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Chapter 2
2.0: LITERATURE REVIEW:
Leadership styles
There are different approaches to studying leadership. Yukl (1994) considers the trait
approach and the charismatic/transformational leadership approach as two major research
avenues to the concept of leadership. The first, focusing on personal attributes of successful
leaders, has mainly been used in psychology. In organizational studies, the second approach
is used more often. Originally the theory of charismatic leadership was coined by House
(1977), stating that a charismatic leader is generously accepted and obeyed by followers by
having a strong need for power and a high self-confidence.
Parallel to this conception of charismatic leadership, the concepts of transformational and
transactional leadership were developed by Burns (1978) on the basis of observing political
leadership. Bass (1985) further extended these notions and applied them in an organizational
setting. In his theory transformational and transactional leadership are not defined to be on a
single continuum, but as two separate concepts. A leader could possess elements of both
styles. The transformational style of leadership is characterized by charisma, individual
consideration, intellectual stimulation, and inspirational motivation. Charisma can be defined
as the degree to which the leader behaves in admirable ways that cause followers to identify
with the leader (Judge and Piccolo, 2004) or the amount of faith, respect, and inspiration he
instills (Bass, 1985; Bycio et al., 1995). Individual consideration refers to the ability of a
leader to consider subordinates individually, by delegating projects to stimulate people,
creating learning experiences, and paying attention to the personal needs of these followers.
Intellectual stimulation is the act of encouraging new ways of thinking, reasoning before
acting, and enabling subordinates to analyze problems from many different viewpoints
(Avolio and Bass, 1988). Finally inspirational motivation is inspiring and empowering
followers to enthusiastically accept and pursue challenging goals and a mission (Bass, 1985).
Transactional leadership on the other hand is characterized by contingent reward and
management-by-exception. The former refers to whether a leader rewards his followers when
they act in accordance with contracts, rules, norms, agreed-upon objectives, or expend the
necessary effort on a certain task (Howell and Avolio, 1993). (Mitch McCrimmon) introduces

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some benefits of transformational leadership style. There is no doubt that being able to
inspire people, stimulate them to think differently and pay attention to their needs are great
ways for a leader to behave. If you have good content and integrity and can present a case for
change with enough enthusiasm to inspire people, you are more likely to win them over than
if your communication style is sleep-inducing. Being inspirational is most useful in situations
where there is no evidence or the facts are unclear. This is especially true with clashes of
values or standards of behavior. (Martin Luther King) appealed to a basic sense of fair play to
move the U.S. Supreme Court to outlaw segregation on buses. The facts alone wouldn't have
done it.
Democratic Style:
The Democratic Leadership Style was first described Lewin, Lippitt, and White in 1938
along with the autocratic leadership and the laissez-faire leadership styles. The democratic
style was also included by (Daniel Goleman in 2002) as one of his six leadership styles. The
democratic leader gives followers a vote in nearly every decision the team makes. The
process involved with being a democratic leader is very time consuming because decisions
are nearly always made together. The democratic leadership style is able to quickly build
flexibility and responsibility and can help identify new ways to do things. This leadership
style is best used when the followers are knowledgeable about the organization's process and
change is needed. For example, this style is used when the leader needs to introduce fresh
ideas into the organization to help with an old process.
Democratic bosses are consultative, inclusive, humanistic, and focus on people. They build
consensus, thrive on informality, are tolerant of conflict, and get an entire team credit. There
are two types of democratic managers. The consultative democrat will listen carefully to
everyone’s input, and even change their approach if it seems reasonable, but makes the final
decision. On the other hand, the participative democrat relies on group consensus to make
decisions. (John Kotter).
Laissez Faire style:
Subordinates and employees are allowed and appreciated to participate in

decision making, this is Laissez Faire style of leadership (Lewin, Liippit, and White, 1939).
But to get fruitful results, employees must be responsible, experienced and mature. Leaders
who adopt this style of leadership (Schilling, 2008) provides a guideline or policy to achieve

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goals and supervise the employees in order to make followers work by remaining on track,
the remaining work is of employees that how they satisfy the customers. As much employees
are sincere with their work and cooperative with each other, they can get goals easily
(Ogbonna et al.,2000).
The Laissez Faire Leadership Style was first described (Lewin, Lippitt, and White in 1938)
along with the autocratic leadership and the democratic leadership styles. The laissez faire
style is sometimes described as a "hands off" leadership style because the leader provides
little or no direction to the followers. The characteristics of the laissez faire style include:
Allows followers to have complete freedom to make decisions concerning the completion of
their work or ask questions of the leader . The leader provides the followers with the
materials they need to accomplish their goals and answers questions to the follower's
questions. (Lewin, Lippitt and White) were one of the first to categorize leadership styles in
terms of behavioral characteristics. Prior to their work, leadership traits were the focus of
leadership studies.
The impact of leadership on subordinates’ job satisfaction
Results from several studies indicate that there is a relationship between perceived leadership
style and the job satisfaction of subordinates. Chiok Foong Loke (2001) found that leadership
behaviors explained 29% of job satisfaction and Lucas (1991) that leadership style
perceptions predicted 36.6% of the variance in job satisfaction scores among nurses. Bratt et
al. (2000), present results indicating that job stress and nursing leadership are the most
influential variables in the explanation of job satisfaction among nurses. Sorrentino et al.
(1992) found significant correlations between head nurse behaviour and job satisfaction in
subordinates as well as a moderating effect of leadership on job anxiety and support
perceived by nurses. Upenieks (2002) found that clinical nurses employed at “magnet”
hospitals experience greater levels of empowerment and job satisfaction than do nurses
employed at “non-magnet” hospitals. This is due to access to work empowerment structures
within their practice environments. Differences in leadership effectiveness between magnet
and non-magnet nurse leaders that accounted for differences in job satisfaction of nurses
included greater visibility and responsiveness by magnet leaders, better support of nurse
autonomous decision-making by magnet leaders and greater support of a professional nursing
climate among magnet leaders.

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High power motivation in nurse managers has been found to correlate negatively with use of
good leadership behaviors and high staff nurse job satisfaction. Managerial motivation for
achievement, on the other hand, correlated positively with use of good leadership behaviors
and high nurse job satisfaction (McNeese-Smith, 1999). Skogstad & Einarsen (1999) found
positive correlations between a changes centered leadership style and subordinates’ job
satisfaction, organizational commitment and evaluations of the leader’s competence.
Upenieks (2003) investigated nurse leaders’ perceptions of what comprises successful
leadership in today’s acute inpatient environment. The results show that 83% of the nurse
leaders validated that access to power, opportunity, information, and resources creates an
empowered environment and a climate that fosters leadership success. Access to these factors
also enhances good work satisfaction among nurses. Research results from several studies
indicate that both consideration and initiating structure behaviours of leaders are positively
related to job satisfaction among subordinates (Kennerly, 1989, Bare-Oldham, 2002,
Alsubaie, 1997).
Boumans & Landeweerd (1993) found that nurses are most satisfied if the head nurse pays
much attention to both “social” and “instrumental” leadership and that social leadership alone
also contributes positively to nurses’ reactions to their job, whereas instrumental leadership
alone leads to health complaints. Butler & Cantrell (1997) also found both consideration and
initiation of structure leadership behaviour to have positive effects on the productivity of
group members. Other studies reveal a positive relationship only between consideration
leadership behaviour and job satisfaction among subordinates (Zigrang, 2000, Payden, 1997)
or at least that this relationship is stronger than the one between initiating structure leadership
behaviour and job satisfaction (Haddad & Samarneh, 1999, Pakard & Kauppi, 2000, Pool,
1997). Results by Schriesheim & Murphy (1976) indicate that in low-stress jobs, leadership
consideration enhances job satisfaction and performance, but in high-stress jobs, leadership
structure is helpful. High structure has dysfunctional effects only when accompanied by low
consideration.
The impact of leadership on subordinates’ health (stress and burnout)
Leadership has in a number of studies been referred to as one of many possible sources of
employee health and stress at the work place (McVicar, 2003, Jonsson, Johansson,
Rosengren, Lappas & Wilhelmsen, 2003) but the magnitude of its impact varies across
studies. Stordeur, D´hoore & Vandenberghe (2001) found leadership dimensions to explain

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9% of the variance in emotional exhaustion and Gordick (2002) found that transformational
leadership explained 2% of the variance in coping with organizational change and that it was
not a significant predictor of perceived stress. In a large prospective study of a random
sample of Swedish employees Oxenstierna et al (2004) found that lack of decision authority
as well as lack of support from work mates were powerful predictors of longlasting sick leave
(at least 60 days). Support from superiors had no statistically significant effect.
Some studies indicate a moderate relationship between leadership styles and
burnout/emotional exhaustion/depersonalization (Langner, 2002; Webster & Hackett, 1999).
Vealey, Armstrong, Comar & Greenleaf (1998) found perceived coaching styles/behaviours
predictive of athlete burnout. But several studies have found no impact of leadership on
health of subordinates, or the results indicate that the role of leadership is inferior to other
work related and demographic factors (Mazur & Lynch, 1989, Lubofsky, 2002, Bernin and
Theorell, 2003). Stordeur, Vandenberghe & D´hoore (1999) found that leadership dimensions
were not significantly related to burnout once stressors like job strain, lack of social support,
conflict at work and feeling that the job is threatened were included in the regression model.
These findings are supported by results from Gordick (2002) and Widerszal-Bazyl (2003).
Widerszal-Bazyl (2003) points out that social support plays an especially important role. She
suggests that further research should focus on the indirect relationship between leadership
and employee health and analyze to what extent supervisors influence e.g. demands, control
and social support, which are known to have a strong impact on employee health.
2.1 Theoretical Model:
Transformational
Style
Performance of
Democratic Job
employee &
Style Satisfaction
Health
Laissez Faire
Style

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Chapter 3:
3.0 Theoretical Framework
My study utilizes the previous researchers work and according to their research studies I have
made my own phenomena to check it in Pakistani environment. Here I discussed some
theories related with my study.
There are different approaches to studying leadership. Yukl (1994) considers the trait
approach and the charismatic/transformational leadership approach as two major research
avenues to the concept of leadership. The first, focusing on personal attributes of successful
leaders, has mainly been used in psychology. In organizational studies, the second approach
is used more often. Originally the theory of charismatic leadership was coined by House
(1977), stating that a charismatic leader is generously accepted and obeyed by followers by
having a strong need for power and a high self-confidence.
Results from several studies indicate that there is a relationship between perceived
leadership style and the job satisfaction of subordinates. Chiok Foong Loke (2001) found that
leadership behaviors explained 29% of job satisfaction and Lucas (1991) that leadership style
perceptions predicted 36.6% of the variance in job satisfaction scores among nurses. Bratt et
al. (2000), present results indicating that job stress and nursing leadership are the most
influential variables in the explanation of job satisfaction among nurses. Sorrentino et al.
Some studies indicate a moderate relationship between leadership styles and
burnout/emotional exhaustion/depersonalization (Langner, 2002; Webster & Hackett, 1999).
Vealey, Armstrong, Comar & Greenleaf (1998) found perceived coaching styles/behaviours
predictive of athlete burnout. But several studies have found no impact of leadership on
health of subordinates, or the results indicate that the role of leadership is inferior to other
work related and demographic factors (Mazur & Lynch, 1989, Lubofsky, 2002, Bernin and
Theorell, 2003). With the support of all these studies this quantitative study aims to measure
the impact of leadership on employees performance and their health.

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Chapter 4:
Data / Methodology
4.0: Tools of data collection

In order to find data on performance of employees and their health, I will collect data on four
Variables: Performance of employees and their health, Transformational leadership style,
Democratic leadership style and Laissez Fair leadership style. For that the present study is
quantitative in nature because I have used quantitative data which is collected through
questionnaire. Then the first step of my study has been to make worth by the validity by using
positivism approach. Positivism paradigm has been used in this study. It focused on
understanding the ideology of multiple participants on their locations and Work place.
• The major benefit of the questionnaire is that we may collect the actual information
based on our research through specific questions.
• This method of data collection is also time saving.
Weaknesses
Missing value is one of the demerits of the questionnaire.
4.1: Sampling Technique and Sample
The Population of my study will be SMEs in which the sample size of 100 employees will
taken for conducting the study by using simple random sampling in order to generalize the
findings in the particular sector.
4.2: Measures
In case of measuring Performance of Employees and their health, Leadership styles
(Transformational style, Democratic style, and Laissez Faire Style) only questionnaire will be
used. Participant data was obtained through in one survey with 5-point scale. Participant will
ask a few questions. The survey contained a total of 13 questions and took approximately 10
to 15 minutes to complete. Measure for each variable is defined below:

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4.2 Methodology:
When, I will collect the data from the participants then I will use the SPSS software for the
analysis of the data. In this analysis, the test I will use define below:
After putting the data into SPSS I will use Descriptive statistic to get the overall summary of
the variables. In the table of descriptive statistic, the value shows of mean, Standard deviation
and also the maximum and minimum values. These values define the response rate of the
respondent. Then to get the graphical information about the variables, I will use the histogram
with normal curve. Next, I will use the scatter plots to check the relationship of dependent
variable independent variable is significant or not. After this for checking that the relationship
is weak, moderate or strong between dependent variable and independent variable. In the last
to check the value that how much change comes in dependent variable due to independent
variable, I will use the Regress analysis.

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Chapter 5:
Analysis
This study has used the most common and famous statistical software in order to present
results of survey. After defining the variables which are Performance of employees and their
health, Transformational leadership style, Democratic leadership style and Laissez Fair
leadership style. After putting the questionnaire data into SPSS total number of variable
shown are 13. Then I utilize the “Compute” option in this software, after using this option
finally we got three independent variable which are used in through out the study.
5.0: Data Screening:
Data screening is use to check the information I get from the participants is accurate and find
out the any missing value. After that I coded all returned questionnaires in to SPSS software
for data analysis. After that I will use different test for analysis. Let’s discussed the detail of
each variable one by one in the result portion.
5.1: Results:
In this portion all the results with their interpretation were shown and being discussed one by
one.

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5.1.0: Descriptive Statistic:
Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
Employee Performance and

100 2.20 4.20 3.4200 .41439
Health
Transformational Style 100 2.75 5.00 3.7975 .52907
Democratic Style 100 2.67 5.00 3.9367 .59684
Laissez Fair Style 100 1.00 5.00 2.1000 1.11464
Valid N (listwise) 100
Interpretation:
The above table presents the descriptive statistics that show the overall picture of all the three
independent and one is dependent variable. The data has been taken from 100 participants. In
the above table the mean values and the values of standard deviation of all the four variables
have been shown. Mean value provides the idea about the central tendency of the values of a
variable. For example if we observe the above output to assess the average response rate or
the respondent then we come to know the mean of different variables like Employee
Performance and Health (3.42), Transformational Style (3.79), Democratic Style (3.93) and
the mean of Laissez Fair Style is (2.10). Standard deviation gives the idea about the
dispersion of the values of a variable from its mean value. So, if we observe then in the
response rate for the variable Transformational Style value of standard deviation is (0.52)
which is the lowest value as compare to other independent variables value. But if we observe
the value of Laissez Fair Style is (1.11) which is quite high as compare to other independent
variable.

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5.1.1: Histogram:
Figure 1.0
Interpretation:
The figure 1.0 reflects the graphical representation of the bars is showing the response of the
respondents related to Employee Performance and Health. The maximum response of the
value relies between 3.5 and 4 which means neutral and agree respectively. The minimum
value relies between 1 and 2 which means that least employees are disagree about the affect
of leadership style on employee performance and his health. And the bars are not normally
distributed. Because the curve is from right to left, the maximum values are in right side.

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Histogram:
Figure 1.1
Interpretation:
respondents related to Transformational Style. The maximum response of the value relies
between 4 and 4.5 which means agree and near to Strongly agree respectively. The minimum
value relies between 1 and 3 which means that least employees are disagree about the affect
of transformational style on employee performance and his health. And the bars are just
normally distributed. Because the curve is in the approximately in middle.

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Histogram:
Figure 1.2
Interpretation:
respondents related to Democratic Style. The maximum response of the value relies between
4 and 5 which means agree and Strongly agree respectively. It means most of the people are
agree that democratic leadership style mostly affect the employee performance and his health.
The minimum value relies between 1 and 3 which means that least employees are disagree
about the affect of Democratic style on employee performance and his health. And the bars
are not normally distributed.

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Histogram:
Figure 1.3
Interpretation:
respondents related to Laissez Fair Style. The maximum response of the value relies between
1 and 2which means strongly disagree and disagree respectively. It means most of the people
are strongly disagree that Laissez Fair leadership style do not affect the employee
performance and his health. The minimum value relies between 4 and 5 which means that
least employees are agree about the affect of Laissez Fair style on employee performance and
his health. And the bars are not normally distributed. Because bars are from left to right the
maximum value lies in the left side.

] Jan
5.1.2: Scatter Plots:
Figure 1.0
Interpretation:
Figure 1.0 shows the results of scatter plot matrix where we intend to have some idea about
the relationship between Employees Performance & Health and Transformational style of
leadership. If we observe then the flow of line is come from left to right which shows the
negative relationship between Employees Performance & Health and Transformational style
of leadership.

] Jan
Figure 1.1
Interpretation:
the relationship between Employees Performance & Health and Democratic style of
leadership. If we observe then the flow of line is come from right to left which shows the
positive relationship between Employees Performance & Health and Democratic style of
leadership.
Figure 1.2

] Jan
Interpretation:
the relationship between Employees Performance & Health and Laissez Fair style of
leadership. If we observe then the flow of line is come from right to left which shows the
positive relationship between Employees Performance & Health and Laissez style of
leadership.

] Jan
5.1.3: Correlations
Table 1.0
Mean Std. Deviation N

3.4200 .41439 100
Health
Transformational Style 3.7975 .52907 100
Table 1.1
Correlationsa
Employee
Performance Transformational
and Health Style
Employee Performance and Pearson Correlation 1 -.103

Health Sig. (2-tailed) .306
Transformational Style Pearson Correlation -.103 1
Sig. (2-tailed) .306
a. Listwise N=100
Interpretation:
According to this table the Mean and Standard deviation in Employees
Performance and health is 3.42 and .41 respectively. And in Transformational style the mean
and standard deviation is 3.79 and 0.52 in the same sequence. The table 1.1 is representing
the correlations between the Employees Performance and health and Transformational style.
The value given of r= -0.103 which shows the negatively correlated and the value of p= 0.306
which is greater than significance level of 0.05. So we will accept Ho and reject H 1 that
means the relationship between both the variables is not significance.
Now we see that the relation is weak, moderate or strong. For this purpose we take the value
of Pearson correlation. In the above correlation table the Pearson value between Employees
Performance and health and Transformational style is -0.103 which is less than 0.33, it shows
the weak relationship between these two variables.
Correlation:

] Jan
Table 1.2

3.4200 .41439 100
Health
Democratic Style 3.9367 .59684 100
Table 1.3
Correlationsa
Employee
Performance
and Health Democratic Style
Employee Performance and Pearson Correlation 1 .527*

Democratic Style Pearson Correlation .527* 1
a. Listwise N=100
Interpretation:
Performance and health is 3.42 and .41 respectively. And in Democratic style the mean and
standard deviation is 3.93 and 0.59 in the same sequence. The table 1.3 is representing the
correlations between the Employees Performance and health and Democratic style. The value
given of r= 0.527 which shows the positively correlated and the value of p= 0.040 which is
less than significance level of 0.05. So we will reject Ho and accept H1 that means the
relationship between both the variables is significance.
Performance and health and Democratic style is 0.527 which is greater than 0.33 and less
than 0.67, it shows the moderate relationship between these two variables.
Correlation:

] Jan
Table 1.4

3.4200 .41439 100
Health
Laissez Fair Style 2.1000 1.11464 100
Table 1.5
Correlationsa
Employee
Performance Laissez Fair
and Health Style
Employee Performance and Pearson Correlation 1 .035

Laissez Fair Style Pearson Correlation .035 1
a. Listwise N=100
Interpretation:
Performance and health is 3.42 and .41 respectively. And in Laissez Fair style the mean and
standard deviation is 2.10 and 1.11 in the same sequence. The table 1.5 is representing the
correlations between the Employees Performance and health and Laissez Fair style. The
value given of r= 0.035 which shows the positively correlated and the value of p= 0.730
which is greater than significance level of 0.05. So we will accept Ho and reject H 1 that
means the relationship between both the variables is not significance.
Performance and health and Laissez Fair style is 0.035 which is less than 0.33, it shows the
weak relationship between these two variables.
5.1.4: Regression

] Jan
Table 1.0
Variables Entered/Removedb
Variables Variables
Model Entered Removed Method
1 Laissez Fair
Style,
Democratic
. Enter
Style,
Transformational
Stylea
a. All requested variables entered.
b. Dependent Variable: Employee Performance and

Health
Table 1.1
Model Summary
Adjusted R Std. Error of the

Model R R Square Square Estimate
1 .110a .012 -.019 .41827
a. Predictors: (Constant), Laissez Fair Style, Democratic Style,

Transformational Style
Interpretation:
In above table we can see the change in dependent variable due to change in independent
variable. We can calculate this change easily by multiplying the value of Adjusted R square
with 100 the result will shown in % which is the change ratio. For this case value of R square
is .012 X 100 = 1.2 which means the 1.2% change in Employees Performance and health
because of independent variable.
Table 1.2

] Jan
ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regression .205 3 .068 .390 .761a
Residual 16.795 96 .175
Total 17.000 99
a. Predictors: (Constant), Laissez Fair Style, Democratic Style, Transformational Style
b. Dependent Variable: Employee Performance and Health
Interpretation:
Multiple regression is used to investigate how leadership style affects the Employees
Performance and health in services industries. The above table show the value of F value
which is ..390 and the value of P = .761. Which shows that relationship is not statistically
significant.
Table 1.3
Coefficientsa
Standardized
Unstandardized Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) 3.629 .416 8.731 .000
Transformational Style -.080 .080 -.102 -.997 .321
Democratic Style .020 .071 .029 .081 .039
Laissez Fair Style .008 .038 .020 .198 .843
a. Dependent Variable: Employee Performance and Health
Interpretation:

] Jan
Coefficient table presents the results of the regression analysis. The objective of the
regression in this study is to find such an equation that could be used to find the impact of
leadership style on Employees Performance and health. The specified regression equation
takes the following form:
Employees Performance and health = C + B (Transformational style) + B (Democratic style)

+ B (Laissez Fair)
If we Separately solve the equation then:
Employees Performance and health = C + B (Transformational style)
Employees Performance and health = 3.629 – 0.080
Employees Performance and health = 3.549
3.55 % Employees Performance and health affected by Transformational style.
Employees Performance and health = 3.629 + 0.020 (Democratic style)
3.65 % Employees Performance and health affected by Democratic style.
Employees Performance and health = 3.629 + 0.008 (Laissez Fair)
3.637 % Employees Performance and health affected by Laissez Fair
These values shows that the exact percentage of independent variables which affect the
dependent variable.
Chapter 6:

] Jan
Discussion
6.0: Overall Discussion:
The major purpose of this study is to identify the most effective Leadership style to increase
the performance of employees and their health, different tools have been used in order to
fulfill the requirements of the research. Findings after statistically analyzing the data are
discussed here in detail. First of all the table of Descriptive statistics is presented which is
showing the values for means, std. deviation and maximum and minimum values from
respondents. The overall findings for this table is that mostly values in Mean table are close
to 3 and 4 which means that most of the respondents are strongly agree and some are agree
with the assumptions that training raise the performance of employees. The highest value is
noted for democratic style showing the mean which is 3.93 near to agree on the other hand
the lowest value of mean in laissez fair is 2.10 more close to disagree option. After
descriptive statistics I used histogram which graphically presenting the response of the
employees to the questionnaire. This graph Is telling that democratic leadership style has
more impact on employees and develop their performance. Then I use scatter plot to check
the relationship between dependent and independent variable , whether it is positive or
negative. I have applied separate scatter plot for each pair of variable to make understanding
easier and understandable. In order to check the relationship between dependent and
independent variables, the correlation test has been used. The findings from this table is
shown there is positive relationship between performance of employees and health with
democratic leadership style. In last I have used multiple regression to find out the exact
percentage of change in dependent variable due to independent variable. The coefficient table
presents the results of the regression analysis. The objective of the regression in this study is
to find such an equation that could be used to find what is the best method of training to
increase the performance of employees. This is the main purpose to use this analysis it
provide more realistic values and data by which we can easily asses that what is change in
dependent variable due to independent variable. I got the significance value of democratic
style is 0.039 that is less than 0.05. which means there is association of performance of
employees and their health with democratic style.
6.1: Conclusion:

] Jan
The aim of this study is to find out the best leadership style that can fully help
to increase the performance of the employees. Past researchers have mostly focused on
impact of just training on performance. This study is focusing on the styles of the leaders, so
that the leaders can adopt the style than may leads the performance of the employees at the
maximum level.
After analyzing all the statistical data I found that democratic style has more affect on
employee performance as compare to the other variables. So the purpose of my study is
fulfilled that which leadership style is better to increase employee performance. According to
(Daniel Goleman in 2002) The democratic leadership style is able to quickly build flexibility
and responsibility and can help identify new ways to do things. On the other hand, the
participative democrat relies on group consensus to make decisions to raise performance.
(John Kotter). Secondly the transformational leadership style is also has good impact on the
performance of employees. The demerit of my research is that I have collected so limited data
from the SME sector and furthermore I will expand my study by switching to the
multinational companies and also include other leadership styles.
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] Jan
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[IMPACT OF LEADERSHIP STYLES ON EMPLOYEE’S PERFORMANCE AND THEIR HEALTH IN SMESECTOR] [2010]

IMPACT OF LEADERSHIP STYLES ON EMPLOYEE’S

A Thesis Submitted to the

In Partial Fulfillment of the Requirements for the Degree of

Master in Business Administration

1 Superior University Lahore

information have been duly cited.

do this will result in failure of this project due to plagiarism.

2 Superior University Lahore

3 Superior University Lahore

4 Superior University Lahore

1.1 Purpose statement..........................................................................................8

Chapter 2: Literature Review.........................................................................11

2.0 Literature Review........................................................................................11

2.1 Theoretical Model........................................................................................15

Chapter 3: Theoretical Framework...............................................................16

3.0 Theoretical Framework................................................................................16

Chapter 4: Data / Methodology......................................................................17

4.0 Tools of data collection...............................................................................17

4.1 Sampling technique and sample..................................................................17

5.0 Data screening.............................................................................................19

5.1.0 Descriptive statistics.................................................................................20

5.1.2 Scatter Plot................................................................................................25

Chapter 6: Discussion Conclusion..................................................................34

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 To investigate leader’s opinion about employee’s health that contributes their

1.3 SIGNIFICANCE OF THE STUDY

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2. Secondly, no research has been found on leadership styles, employee’s performance

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2.0: LITERATURE REVIEW:

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Laissez Faire style:

Subordinates and employees are allowed and appreciated to participate in

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2.1 Theoretical Model:

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4.0: Tools of data collection

4.1: Sampling Technique and Sample

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5.0: Data Screening:

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N Minimum Maximum Mean Std. Deviation

Employee Performance and

Transformational Style 100 2.75 5.00 3.7975 .52907

Democratic Style 100 2.67 5.00 3.9367 .59684

Laissez Fair Style 100 1.00 5.00 2.1000 1.11464

Valid N (listwise) 100

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