.

INJIBARA
UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS
DEPARTEMENT OF MANAGEMENT
THE ROLE OF EFFECTIVE LEADERSHIP ON EMPLOYEE
PERFORMANCE (INCASE OF DASHEN BANK INJIBARA BRANCH)
PROPOSAL PAPER SUMITTED TO MANAGEMENT DEPARTEMENT IN PARTIAL
FULFILLMENT OF BA DEGREE MANAGEMENT

PERPARED BY ID No

1. YIHUNIE DERBIE……………………………………………IUSSR/708/12

2. YODIT GELANA ……………………………………………..IUSSR/719/12

3. YOHANNSE ASEFA………………………………………….IUSSR/721/12

4. YEMEGN TILAYE……………………………………………IUSSR/697/12

5. YESHITU BERIHUN…………………………………………IUSSR/702/12

6. ROZA ALLE………………………………………………….IUSSR/557/12

ADIVISOR: BELEW. N

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 Abstract

Leadership is a process by which an individual influence the thoughts, attitudes, and behaviors of
others. Leadership, being the ability to guide followers for achieving shared goals, influences
others through inspiration and charisma or by using power. The role of effective leadership is to
strength and direct people to the attainment of organizational goals. This research sought to
investigate and understand the impact of different leadership styles (autocratic, democratic and
laissez-faire) and their effects on employee performance in the case of Dashen bank injibara
branch. The common compliant to enhance the effectiveness of the leadership is lack of
dedication and lack of commitment to the underlying a value of public service and the interest of
the employees served. The main problem in an organization is that, if there is no effective
leadership employees’ performance towards achievement of the task is highly reduced. The
research design used in this research was descriptive research design, since it describes the role
of effective leadership on employee’s performance. The researcher used qualitative and
quantitative data which are obtained from both primary and secondary data. Primary source of
data would be in the form of questionnaire, interview and observation and group discussion.
Secondary data was collected books and web sites. . After the data is being collected, data was
processed on the activity, which involves editing, coding, and classifying data to make it suitable
for further analysis and conclusion can be drawn.

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Acknowledgment

First, we would like to thank our GOD that initiated and strengthen us to complete this final year
paper. Second, we would like to give our great full thanks for injibara university that provide us
this academic performance as well as good thinking capability to proceed future social life and
solving technical problems successfully. And also, we would like to say thanks for DASHEN
Bank Injibara Branch organization manager and their staff member workers who helped us to
give their times in order to accomplish our researches properly. Finally, we would like to give
deepest appreciation to our advisor Mr. Belew.N (MBA) who advises us what he knows
practically and theoretically knowledge. At the end, we strongly thank our parents and also who
helped us either financially, technically, or morally from beginning up .

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 Abstra........................................................................................................... i
Acknowledgment........................................................................................ ii

List of figures and Tables.................................................................................. vi

CHAPTER ONE............................................................................................................................. 1

1. INTRODUCTION.................................................................................................................... 1
1.1 Background of the Study ....................................................................................................... 1

1.2 Statement of Problem ............................................................................................................ 3

1.2.1 Research Questions......................................................................................................... 4

1.3 Objectives of the Study........................................................................................................ 5

1.3.1 General Objectives ......................................................................................................... 5

1.3.2 Specific Objectives ......................................................................................................... 5

1.4 Significance of the Study ...................................................................................................... 5

1.5 Scope of the Study................................................................................................................. 5

1.6 Organization of the Study ..................................................................................................... 6

1.7 Limitation of the Study ......................................................................................................... 6

CHAPTER TWO ............................................................................................................................ 7

2. LITERATURE REVIEW ........................................................................................................... 7

2.1 Nature of Leadership ............................................................................................................. 7

2.2 Definition of Effective Leadership ........................................................................................ 7

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2.3 Leadership Styles .................................................................................................................. 8

2.3.1 Autocratic Leadership..................................................................................................... 8

2.3.2. Democratic Leadership .................................................................................................. 9

2.3.3 Laissez Faire Leadership ................................................................................................ 9

2.4 Theories of Leadership........................................................................................................ 10

2.4.1 Theory X and Theory Y................................................................................................ 10
2.4.2. Traditional Theories of Leadership ............................................................................. 10

2.4.3. Modern Theoretical Process of Leadership ................................................................. 12

2.5 Employee Performance ....................................................................................................... 13

2.6 Measuring the Effects of Leadership .................................................................................. 14

2.6.1 Common Measures of Effective and Ineffective Leadership ....................................... 14

2.7 Challenges in Leadership .................................................................................................... 15

2.8 Influencing the Leadership Challenges ............................................................................... 16

CHAPTER THREE ...................................................................................................................... 17

3. RESEARCH METHODOLOGY.............................................................................................. 17

3.1 Research Design .................................................................................................................. 17

3.2 Types and Source of Data..................................................................................................... 17

3.3 Methods of Data Collection ................................................................................................ 17

3.4 Target Populations and Sample Size................................................................................... 17

3.5 Sampling Technique ............................................................................................................ 17

3.6 Data Analysis and Presentation ........................................................................................... 18

CHAPTER FOUR ....................................................................................................................... 19

4. DATA PRESENTATION, ANALYSIS, AND INTERPRETATION ..................................... 19

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 4.1 Introduction ......................................................................................................................... 19

4.2 Personal Information of the respondents ............................................................................. 19

4.2.1 Sex distribution of respondents .................................................................................... 19

4.2.2 Age Distribution of respondents ................................................................................... 20

4.2.3 Educational status and Work Experience of Respondents. .......................................... 20

4.3 Leaders (Supervisors) View of Questionnaires ................................................................... 22

4.4 Analysis and Discussion of Employees View ..................................................................... 23

CHAPTER FIVE ........................................................................................................................ 33

5. SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION....................... 33

5.1 Summary of Findings .......................................................................................................... 33

5.2 Conclusions ......................................................................................................................... 34

5.3. Recommendation ................................................................................................................ 35

References................................................................................................................................... 36

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 List of figures and Tables

Figure 1.Sex distribution of respondents ..................................................................................... 19

Table 1.Information regarding educational status and work Experience of respondents. .......... 20

Table 2. Analysis and discussion on leadership (how leaders order group Member). ............... 22

Table 3. Work planning ................................................................................................................ 22

Table 4. Leadership impact on the profitability of the organization............................................ 23

Table 5. Whether the manager forces employees to accept his/her ideas................................... 23

Table 6. Employee participation in decision making.................................................................... 24

Table 7. Employee’s turnover ...................................................................................................... 25

Table 8. Employee motivation in the organization ...................................................................... 25

Table 9. Time given for the workers............................................................................................ 26

Table 10. Leaders and employees relationship impact on profitability ....................................... 26

Table 11. Leadership impact on employee job performance ....................................................... 27

Table 12. Leadership styles .......................................................................................................... 28

Table 13. Ways of proper work done ........................................................................................... 28

Table 14. Respondent’s attitudes towards the goals of the organization .................................... 29

Table 15. Equal participation in decision making....................................................................... 30

Table 16. Respondent attitude towards the methods of decision making .................................... 30
Table 17. Employee’s satisfaction with their managers’ leader styles ........................................ 31

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 CHAPTER One INTRODUCTION

1.1 Introduction of the Topic

Leadership is one of the most important areas in the organizational management. Northouse
(2007) defined that leadership is a process whereby an individual influences a group of
individual to achieve a common goal. Ethe et al., (2012) also defined that leadership is the
ability of a person who can influence the behaviors or actions of other people for the purpose
of achieving goals and to maximize outcomes in the organization. Good leadership is essential
to an efficient and effectiveness of the organization. Nowadays, organizations are using
different leadership styles which depend on their nature and how the organizations operate.
Different types of leadership styles will be effective in attaining organizational goals and
objectives in different situations at workplace.

The leadership styles applied by managers’ associate with employees’ job satisfaction, retention
and then consequently improve their performances which can attain through effective
leadership. Therefore, leaders play a vital role for the survival and progress of an organization.
Nwokocha et al., (2015) also stated that leadership helps to achieve the goals and objectives of
the organization. Ethe et al., (2012) also described that leadership style refers to a particular
behavior applied by a leader to motivate and influence his or her followers to achieve the goals
of the organization. It cannot be possible to lead people in the same way to leverage their
talents and obtain optimal performance. Different types of leadership styles exist in work
environments. Each leadership style has both advantages and disadvantages. The culture and
goals of an organization determine which leadership style is the best for the firm. In this study,
the researcher going to focuses on Lewin's three participatory leadership styles (1939):
autocratic, democratic and laissez-faire leadership styles.

Lewin et al., (1939) stated that autocratic leaders closely monitor employees to ensure that
employee are performing correctly and they use reward, punishment and threat as motivation
tools. This style of leadership is strongly focused on both commands by the leader and control
of the followers (ibid). Karamat (2013) also pointed out that autocratic leaders are the leaders
considering the opinion of their followers then command their followers to execute their

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assigned tasks without question. Then, Swarup (2013) also stated that Democratic leadership
style also defined participative leadership style as it encourages employees to participate in the
decision making process and problem solving responsibilities. Cherry (2006) stated that
democratic leaders offer guidance to group members, but they also participate in the group and
allow input from other group members. Lewin et al., (1939) pointed out that in laissez –faire
leaders give employee freedom of action, provide little guidance and employee have to solve
problem by their own. Some of the researchers (Dotse and Asumeng, 2014 and Nwokocha and
Iheriohanma, 2015) identified that each leadership style has impacted on employee retention
and their performance in the organization.

In this study, there are two main functions that leaders bounded to be perform. The first one is
employee retention which is a challenge for organizations as the skillful employees are valuable
resources for organization and the second function is employees’ performance. Ethe et al.,
(2012) stated that the role of leaders and their leadership styles is crucial in employee
retention. There are various retention strategies such as rewards and recognition programs,
training and development programs, flexible working arrangements, compensation, promotion
and other opportunities. As employee retention strategies have a positive effect or relationship
to employees’ job performance, the leader from the organization should practices retention
strategy which able to remain employee to increase the level of job performance (Akuoko, 2012
as cited in Luen et al., 2013).Therefore, it is also important for organization to attain the highly
potential employees in the recruitment process. However, it is more imperative for the leaders
to retain the highly performance employees of the organization in order to benefit from the
investment already made in them such as training and development programs. In this
competitive business environment, leaders have to steer their organizations for the attainment
of competitive edge in the industry. This competitive advantage will be guaranteed if the core
employees are retained for as long as possible so that continuity of competitive goods and
services is assured and will improve the organizational performance (Michael, 2008).

Therefore, employee retention is one of the most critical issues facing organizational managers
as a result of the shortage of skilled manpower, economic growth and high employee turnover

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(ibid). The second function is employees’ performance. The leadership behavior and capability
can influence to motivate and improve the individual employee work performance. The
employees Leaders influence to other people for the purpose to achieve the organizational
goals. Therefore, the behavior of leader has an effect on the work outcomes, on the way tasks
are completed. That is why, leadership style will be important to improve the individual
employee work performance. The successes of the organizations highly depend on the quality
and effectiveness of employee work performance. Babatunde and Emem (2015) approved that
the leadership styles that adopted by a manager in an organization have strongly impacted with
the performance of employees.

Effective Leader must retain talented employees to achieve organizational goals by improving
their performance. Opatha (2014) stated that talent employees are the core competency of
organization. They cannot imitate by others. Through them, organization can get competitive
advantages within the industry. In this study, the researcher would like to present the impact of
leadership behavior of the leader and performance of his followers by analyzing intervening
effects of employee retention to the relationship of leadership styles and employee
performance.

1.1. Background of the study

Leadership defined as the influence that particular individual (leaders) exert up on the goal
achievement of other subordinate in an organization context. Leaders have an ability to see how
different aspect of a situation fit together and influence each other. Leadership plays a central
part in understanding group behavior for it’s the leaders who usually provides the direction
towards goal attainment. Therefore, more accurate capability of who makes a goal leader, or
what condition affect leadership ability should be valuable in improving group performance.
(Gary rukl 2006). Leadership is centered in the communication between leaders and followers
rather than one the unique qualities of leader. Through of us relationship, leadership becomes a
process of collaborations that occurs between leaders and followers. Leaders affect and affected
by followers and both leader and followers are affected in turn by situation that surrounds them

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(Peter G. Northous 2009). Taking of leadership as a relationship suggest that leaders must
include followers and their interests in the process of leadership. A leaders need to be fully aware
of the followers, interests, ideas, position attitudes and motivations (Peter G. Northouse 2009).

An effective leader connect with people and understand the task to be done those skill required to
perform them and the environment in which people work. A leader to effective with people
requires a host of abilities such as helping employees to work as a term, motivating them to do
their best, promoting satisfying relationship among employee and responding to their request
(Peter G. Northouse 2009). Leadership plays a central role in organizational management. As
mention in above, the success of the organization is highly depends on the behavior of leader.
Without proper leadership and directing, it is difficult to achieve the success of the
organization. Effective leaders can management their department or organization by
influencing his or her followers. Managing the people is not an easy task.

Leaders need to understand how he or she can influence his or her followers. The behavior of
leader can motivate or demotivate to the employees. Effective leadership can enhance
employees’ satisfaction with their jobs, motivation at work and task performance (Lussier &
Achua, 2012). The success of the organization depends on leaders as the leader can influence
the follower performance. If the leader can apply the appropriate leadership style, employees
will satisfied and motivated with their job as a consequence their performance will improve and
they will also intend to stay for longer period.

Therefore, an effective leader has to understand how to satisfy, motivate and improve his or
her subordinates’ performance and how to attract and retain the high performance employees
in the organization. As the organizations are operating in it is very crucial to keep Skillful
employees who can contribute effectively with their highest performance to attain the
organizational goals. Michael (2008) pointed out that the competitive advantage will be
guaranteed if the organization can retain core employees as long as possible.

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1.2. Statement of the problem
Successful leaders anticipate change vigorously exploit opportunities; motivate their followers to
higher level of productivity correct poor performance and lead the organization towards it is
objectives. Confronting inadequate performance by group members is challenging and
emotionally courage process that requires much of leaders. If is not easy, but it is necessary part
of leadership. Effective leaders are proactive and confronts problem when they occurs  In
problem situation leaders has to communicate with low performance group member and explain
their behavior hinder the group form meeting its goals (Lafasto and Latson, 2001).

Sometimes the obstacle facing people it is the task itself. When a task was unstructured,
ambiguous to complete task and performance appraisal system. Another factor affects employee
performance. Example, leadership style and leaders ability to lead employees and decision
making process affect employees performance in a given organizations. (peter G.Northouse
2009).

1.3 research questions

1. What are the uses of effective leadership in the organizations?

2. What kinds of leadership style follow the organizations?

3. How leaders motivate employees in the organization?

4. What are the problems related to leadership that affect employee performance?

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1.4. Objectives of the study

1.4.1. General objective

The general objective of this study was assessed the role of effective leadership on employee
performance of Dashes Bank in Injibara Branch.

1.4.2. Specific objectives

To identify what types of leadership style does the organization follow.

To understand the importance of leadership within the organization.

To explore the problem that affect performance of employees that was related to leadership.

To identify the way of leader to motivate employees.

To identify what types of decision making for the leader.

1.5. Significance of the study

This study would vital for Dashen Bank in Injibara Branch in order to set important information
about employees and understand their problem. To forward the concerned bodies to look for the
solution for the problems that arises in the organizing during performance appraisal system. It
would serve as a base for other researchers who were interested to conduct research on this area
in depth. Also it would enhance the researchers’ ability and to skill conduct further research and
researcher would again more experience.

1.6. Scope of the study

These studies have geographical and conceptual delimitation. The study focuses on the role of
effective leadership on employee performance only Dashen Bank in Injibara Branch and
conceptually this study would emphasize only leadership that affects employee performance.
The research time duration would take one year. Starting from November up to June and the
information would take employee of the bank.

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1.7. Limitation of the study

During conducting this study there are some limitations that will be raised from different
direction. Some of them are described as follow while conducting this research is the
researcher will face some constraint such as; - as unavailability of sufficient source of data and
information, unwillingness of the respondents to give full information. The total questionnaires
that will be duplicated and distributed to the respondents will to be collected fully due to the
carelessness of some respondent. It is obvious that only research will not be carry out smoothly
without facing any challenges, Similar the researcher would face the following limitations.

➢ Financial constraints particularly duplication paper

➢ Less time due to the current pandemic

➢ Lack of enough sources

➢ Researcher’s lack of experience of conducting research

➢ Due to the not sufficient time to distribute and collect questionnaires and others.

1.8, Organization the study

CHAPTER ONE: This chapter gives overview of the study In this chapter involves introduction
to the topic, research problem, research questions, objectives and limitations of the study etc.

CHAPTER TWO: This chapter will present the theoretical findings of other researchers which
are relevant to the research such as theories of leadership style, strategies of employees’ retention
and concepts of employees’ performance.

CHAPTER THREE: This chapter will cover the research methodology.

CHAPTER FOUR: This chapter carefully analysis the data which are collected through the

Questionnaires and systematically analysis that data. The effect of leadership styles on
employees' performance to the relationship of employee performance will be discussed under
this section.

CHAPTER FIVE: This chapter contains final discussion of the study conclusion and
recommendation

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 CHAPTER TWO

REVIEW RELATED LITERATUER

2.1 Definition of Leadership

Different authors defined leadership in different ways. Yukl (2010) defined that leadership is the
process of influencing others to understand and agree about what needs to be done and how to do
it, and the process of facilitating individual and collective efforts to accomplish shared
objectives.Northouse (2010) interpreted leadership as “a process whereby an individual
influences a group of individuals to achieve a common goal”. In the book of Business Essential
(2009) a leader style of leading can affect the motivation, efficiency and effectiveness of the
leader’s followers. Then, Rowe and Guerrero (2011) stated that leadership is about influence the
ability to influence your subordinates and your peers in a work or organizational context.
Without influence, it is impossible to be a leader. Of course, having influence means that there is
a greater need on the part of leaders to exercise their influence ethically.

According to Dubrin (2007), the leader has the ability to inspire confidence and support among
the people who are needed to achieve organizational goals. Porter et al., (2006) described that
leaders get things done through people. They set the direction and get other people to follow
them. Armstrong (2009) pointed out that leadership is the process of getting people to do their
best to achieve a desired result. It involves developing and communicating a vision for the
future, motivating people and gaining their engagement (ibid).Moreover, effective leadership
requires good communication. Skillful leaders make sure they use the right mode of
communication. Leader to Leader (2008) stated that communication has to be two-ways
communication. The results of good communication should be to gain associate alignment,
agreement, and commitment. One should keep words single.

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Effective leaders manage themselves well, communicate clearly and consistently, develop
others, encourage full participation and teamwork, build relationship, spur innovation and
creative thinking, foster high performance, align strategy and execution and more (ibid). Bill
George, former CEO of Medtronic Company said that the role of leaders is not to get others
people to follow them, but to empower others to lead (described in ‘Era of Management book’
Daft, 2013). Business essential (2009) pointed out that leadership is the process of influencing
others to work willingly towards goals, to the best of their capabilities.

Leadership is a trait: means that each individual brings to the table certain inherent qualities that
influence the way he or she leads some leaders are confident, some are decisive and still other
are outgoing and sociable, saying that leadership is a trait places a great deal of emphasis on the
leader and on the leader’ special gifts. If follows the often expressed belief “leaders are born, not
made.” Some argue that focusing on the has the capacity to lead. While the term “ability”
frequently refers to a natural capacity, ability can be acquired.

Leadership is a skill: skilled leader are competent people who know the means and

Methods for carrying out their responsibilities.

Leadership is behavior: leadership is also behavior; it is what leader do when there are in a
leadership role. The behavioral dimension is concerned with how leader act toward others in
various situation.

Leadership is a relationship: another and somewhat unusual, way to think about leadership is a
relationship from this perspective; leadership is centered in the communication between leaders
and followers rather than on the unique qualities of the leader.

2.2 Definition of Performance

Rotundo and Rotman (2002) defined that employee performance was defined as actions that
contribute to organizational goals and that are under the individual’s control. According to Otley
(1999) performance in organizations can be separated in organizational performance and job
performance.

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Employee performance is also known as job performance. Otley (1999) also stated that, the
performance of organization depends on the performance of employees (job performance) and
other factors such as the environment of the organization. A good employee performance is
necessary for the organization, since an organization’s success depends on the employee’s
creativity, innovation and commitment (Ramlall, 2008). Macky and Johnson (2000) pointed that
improved individual employee performance could also improve organizational performance as
well. The performance of an organization as a whole determines its survival. According to this,
the researcher can say that performance of individual contributes to departmental success and
consequently departmental success determines the organizational success. Therefore, individual
performance is highly important for an organization as a whole. Then, Armstrong (2014) stated that
performance is concerned with how well something is done and reward is with how people should be
recognized for doing it. Griffin et al., (1981) posited that good job performances and productivity growth
are important in stabilizing the economy; by means of improved living standards, higher wages, an
increase in goods available for consumption, etc. He also argued that individual employee performance is
important to society in general.

According to Hunter and Hunter (1984) crucial in a high job performance is the ability of the employee
himself. The employee must be able to deliver good results and have a high productivity. According to
Sinnented and Frese (2002) individual performance is a core concept within work and organizational
psychology. According to Armstrong (2014) performance is defined as behavior that accomplishes
results. Performance management influences performance by helping people to understand what good
performance means and by providing the information needed to improve it. Reward management
influences performance by recognizing and rewarding good performance and by providing incentives to
improve it. According to Viswesvaran and Ones (2000), job performance refers to scalable actions,
behaviors and outcomes that employees engage in or bring about that are linked with and contribute to
organizational goals.

A widely endorsed definition of work performance is that of Campbell (1993) as cited in Koopmans et al.,
(2011) that “behaviors or actions that are relevant to the goals of the organization”. Three notions
accompany this definition: (1) work performance should be defined in terms of behavior rather than
results, (2) work performance includes only those behaviors that are relevant to the organization’s goals,
and (3) work performance is multidimensional. As distinguishing between behavior and results can be
difficult, others have included results in their definition of work performance (ibid)

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2.3 Lewis’s Three Participatory Leadership Styles (1939)
In 1939, a group of researchers led by psychologist Kurt Lewis set out to identify different styles of
leadership. Leadership can be described in terms of styles, as suggested by Lewis et al., (1939). These are
often described as being autocratic (policy is decided only by the leader), democratic (where policy is a
matter of group discussion and the leader), and laissez-faire (where the group decides with minimum
input from the leader) (ibid). Porter et al., (2006) mentioned that in 1939, Lewin conducted a classic study
of leadership, and this involved three styles of leadership: autocratic, democratic, and laissez-faire. They
are as follow

2.3.1 Autocratic leadership style

In autocratic leadership style, the leader determines policy and assigns task to members without
consulting his subordinates (Dotse & Asumeng, 2014). Therefore, there is power distinct between leader
and followers in autocratic leadership style. Then, leaders closely supervise employees to achieve right
performance. Lewin et al., (1939) explored that autocratic leaders provide clear expectations for what
needs to be done, when it should be done, and how it should be done. According to Business Essential
(2009), autocratic leadership style is useful in an emergency and may work in a crisis or as a last resort
with a problem employee. However it has the most negative impact on the overall organizational cultural.
In this style, decision making is centralized in the hands of the leader, who does not encourage
participation by subordinates (ibid).

Some characteristics s of autocratic leadership includes

Little or no input from grip members.

Leaders make the decision

Group leaders dictate all the work methods and process.

Group members are rarely trusted with decisions or important tasks.

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2.3.2. Democratic leadership styles
Democratic leadership styles also known as participative leadership is a type of leadership style
in which allowing members of the group to share and contribute ideas. And make member of the
group more participative in the decision making process.

Some characteristics of democratic leadership

1. Creativity is encouraged and rewarded

2. Member of the group feel more engaged in the process

3. Group members are encouraged to share ideas and opinions even though the leaders
retaining the final say over decisions.

2.3.3 Laissez-faire leadership style

Laissez-faire leadership style involves giving group member the freedom to make their own
decisions. Laissez-faire leadership, also known as delegate leadership style.

Some characteristics of laissez- fair leadership style

1. Very little guidance from leaders

2. Complete the freedom for followers to make decisions.

3. Leaders provide the tools and resources need.

4. Group members are expected to solve problems on their own.

2.4. Problems related to leadership

Some of the common problems that related to leadership is as follows (Zaccoro and Marks,
2000)

I. It is not clear exactly what behavior are indicatives of leadership.

II. Less motivation of employees such as, not enough of monitory growth, little or no
appreciation, less work or too over loaded.

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 III. Many problems occur because of people failing to communicate effectively.

IV. Luck of experience

V. Luck of confidence

2.5. The importance of leadership

The importance of leadership is a key ingredient to successful business, so understanding the
importance is a key in business success. Leadership has so much influence in our lives because
often it determines whether we enjoy particular experience, year of personal experience as a
carrier military office showed me that the army leadership manual the importance leadership
best. A leader is anyone who inspires and influence people to accomplish organizational goal
they motivate other pursue actions and focus thinking for the greater (Tukl, 2006).

The following points are the importance of leadership

1) Initiates action-leaders is a person who starts the work by communication the policies and
plan to the subordinates from where the work actually starts.

2) Motivation- a leader proves to be playing an incentive role in the concerns working, he

motivates the employee with economic and non-economic rewards and their buy gets the
work from the subordinates.

3) Providing guidance- leaders has not only supervised but also play guiding role for the
subordinates. Guidance here means instructing the subordinates the way they have to perform
these work effectively and efficiently.

4) Creating confidence- confidence is the important factor which can be achieved through
expressing the work effect to the subordinates explaining them clearly the role and giving the
guidelines to achieve the goals effectively.

5) Building morale- moral denotes willing cooperation of the employee towards their work and
getting them in to confidence and winning their trust.
6) Leaders can be a morale booster by achieving full cooperation, so that perform with best of
their abilities as they work to achieve goals.

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7) Builds good work environment: helps in sound and stable growth therefore, human relation
should kept in to mind by a leader he should have personal contracts with employees and
should listen to their problem and solve them. He should treat employees on humanitarian
terms.

8) Co-ordination can be achieved through re-concealing personal interest with organizational

goals, that synchronization can be achieved through proper and effective coordination which
should be primary motivate of a leaders. (Rukl, 2006).

2.6. Ways of leaders motivate employees

Most successful leaders will tell you that the primary motivation is to “Change the World” and to
build something lasting, not to make a lot of money. The following is the way of motivate
employee.

1. Energize your team: - instead of being the types of leaders who sucks the energy away from
threes; resolves to be the kind of leaders who strive to bring passion positive energy to the
work place very day.

2. There is more to life than work-great leader have deep reserves of the physical spiritual and
emotional energy and that energy is usually fuelled by a strong and supportive relationship
with the people they love, regulate exercise and a healthy life style and setting aside time for
reflection.

3. Put your people first- no organization is better than the people who run it. The fact that you
are in the people business. The business of herring. Training and managing people to deliver
the product or service you provide. If the leader you need to attend to you people with a
laser-life focus.

4. Act with integrity- in a time when news reports are filled with the stories of private and
public leaders who have acted in appropriately and have gone against the best interest of their
employee or constituents, showing you or employee that you value integrity can help
motivate them and create a sense of pride for you organization.

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5. Be a great communicator- leadership is influencing other and this cannot be achieved without
effective communication.

6. Be a great listener- the most effective leaders are the one who take the time to listen not just
to their team members. Words but to the priceless hidden meaning beneath then, remember
that during that times and band, sometimes your employees just need someone to take to
communicate to them that you are always weighting with open ear.

7. Be problem solver: - post a sign above your office door that reads “Do not bring me the
problem. Bring me solution”. Then set above the task of guiding each person on your team
toward the goal of becoming a top notch problem solver during this crucial period.

8. Lead through experience and competence, not through title or position. Monitor your
employees, incur rage team, make partners out them and your organization is sure to benefit.
If you want to service the tough economy. That is exactly the kind of leadership you need for
your organization.

2.7. Types of decision making for the leader

Leader gives direction to people to follow. He is responsible for ensuring that his decision
provides the right direction to the organization. Be it in a business or in other organization
decision making is an important component of eldership skills. The different type of decision
making that a leader typically encounters are:

1. Authoritative: - in authoritative type of decision making the leader is the sole decision maker
which subordinates follow. The leader has all the information and expertise required to make
a quick decision. If it is important that the leader is a good decision maker as it is he was has
to own up to the consequence of this decision. Though effective, in case the leader is an
experienced individual, it can harm the organization if the leader insists on an authority’s
decision making even when there is expertise available within the team.

2. Facilitative:- in facilitate type of decision making, both the leader and his subordinates work
together to arrive at a decision. The subordinates should have the expertise as well as access
to the information required to make decision.

19
3. Consultation: as the name suggests, consultative decisions are made in consolation with the
subordinates. However, the fact remains that unlike in the facilitative decision making style,
in consultative decision making it is the leader who hold the decision making power. A wise
leader tends to consult his subordinates when he thinks that they have valuable expertise on
the situation at hand.

4. Declarative:- as per the trait that characterize effective leadership. Determined leaders are
aviary focused and attentive to task. They know where there are going and how they intend
to get there.

2.8. Trait of effective leadership

A. Intelligence

Intelligence is an important trait of related to effective leadership. Intelligence includes having

good language skill perceptual skills and reasoning ability. This coronation of assets makes
people good thinkers and makes them better leaders.

B. Confidence

Bienne confidence is another important trait of an effective leader confident people feel self-
assured and believe they can accomplish their goals Ruther than feeling uncertain they feel
strong and secure about their position. They do not second guess themselves, but rather move
forward on project with a clear vision (Conger and Riggio 2007).

C. Charisma

Of all the trait related to effective leadership, charisma gets the most attention charisma reapers
to a leader special manage tic charm and appeal and can have a huge effect on the leadership
process charisma is a special personality characteristic that gives a leader the capacity to do
extraordinary thing (conger and riggio 2007)

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D. Determination

Determination is another trait that characterizes effective leadership. Determined leaders are
aviary focused and attentive to task. They know where there are going and how they intend to get
there. Determination is the decision to get the job done it includes characteristics such as
imitative persistence and drive people with determination re willing to assert themselves, they
are practice and they have the capacity to persevere in the face of obstacles. Beine determined
includes showing dominance at times especially in situation where other need direction.

E. Sociability

Another important that for leaders is sociability it refers to a leaders capacity to establish
pleasant social relationship people want to sociable leaders with whom they can get along leaders
who sociability are friendly, outgoing courteous, fitful and diplomatic.

F. Integrity

Another most important, effective leaders have integrity characterizes leaders who possess. The
qualities of honesty and trust worthiness. People who adhere to a strong set of principle and take
responsibility for their action are exhibiting integrity leader with integrity inspire confidence in
other because they can be trusted to do what they say they are going to do. They are going to do.
They are Loral dependable and transparent (peter G. Northouse. 2009)

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 CHAPTER THREE

RESEARCH METHODOLOGY

3.1. Research design

The main objective of this study was assessing the role of effective leadership on employee
performance and describe the characteristics of population and describes the problem by using
the descriptive method.

3.2. Source of data

The researcher used qualitative and quantitative data which obtained from both primary and
secondary source of data. The primary source of data would be in the form of questionnaires
interview, observation and group discussion employees and manager of the organization. The
secondary source of data would be books, relevant documents and websites.

3.3. Target population

The study would conduct collected 25 employees at Dashen Bank in Injibara branch to assess the
role of effective leadership in employee performance. And the source of data would all
employees of the organization and used censes method because they are few in number.

3.4. Method of data collection

The researcher would use both primary and secondary method of data collection. The researcher
would use this techniques because by using questionnaire method, large amount information can
be collected a short of time and relatively cost effective way.as an additional source of Primary
data collection unstructured interview would have held with the manager of dashen bank. And
the secondary method of data would be collected through review books, relevant documents and
websites.

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3.5. Method of data analysis
After data collected ,data was processed on the activity, which involve editing ,coding and
classifying data to make it suitable to further analysis .Descriptive analysis was employed to
examine the finding of the study ,Since it refers to procedures for organizing ,summarizing and
describing quantitative data about descriptive study methods, by using par graphs, tables, pie
chart, and percentage.

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 CHAPTER FOUR

4.1 DATA PRESENATATION, ANALIZATION AND INTERPRETATION

This chapter focused on the presentation, analaztion, and interpretation of data collected through
questionnaires. As it is identified in the first chapter the major objectives of the study was the
tittle of effective leadership on employees performance to achieve these objective information
has been collected from the employees of the primary the researcher 25 questionnaire distributed
to the employees to dashen bank injibara branch .among this questionaries’ 3 questionnaires not
returned and 2 did not provide consistent information and other riming 20 and were used for
analysis and interpretation of the data here after.

4.2, personal information of the respondent

The personal information includes data about sex, age, educational level, and working
experience of the respondent that was used to appropriately know the respondent characteristic
and background information before going to the basic parts of the study.

Demographics characteristics of the respondent

Demographic is a dominate factors to effective leadership in the organization it includes age

education and work experience.

24
Source questionnaire 2015

In the above pie chart to analyzed the total respondents 21(84 %) of respondents were males and
4(16 %) of respondents were females this indicates that mules employees were dominated in the
organization.

25
Source questionnaire 2015

Based on the above graph 5 (17 %) of respondents are were between 40-50 and 6 (21 %) of
respondent Ares were between18-25 ace and 8 (27 %) of respondent ace were between 25-30
aces 10 (35 %)of respondent ace were between 30-40 but there is no employees employees
above the are of 50 general most employees are between 4

Source questionnaire 2014

Based on the above Graphs the total respondents 15 (52 %) of respondent work etprionce is
above 4 hearses 9 (31 %)of respondent work etprionce is 2-4 rerun etprionce 5(17 %) of
respondents of work etprionce is 0-2 years genracur most of employees were above 4 rears.

Table 4.1 education

No Item Respondents

No Percentage

1 Diploma 0 O

2 Degree 21 84%

3 above degree 4 16%

Total 25 100%

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Based on table 4.1 21 (84 %) of respondents were degree and 4 (16 %) of respondents were
above degree. generally in the organization is no diploma (certificates and most employees were
first degree and dominated in the organization

Table 4.2 marital status

No Item Respondent

Required parentage

1 Married 15 60 %

2 Un married 10 40 %

3 Divorced 0 0

4 Widowed 0 0

5 Total 25 100%

According to table 4.2 15 (60 %) of respondent was married and 10(40 %) of respondent were
single but their no Divorced and windowed respondents.

4.3, questions related with employee performance

Table 4.3

No Item Respondent

& require Percentage

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1 Do you group member follows standards, rules and
regulations

1 Yes 25 100 %

2 No 0 0%

total 25 100 %

According to table 4-3 25 (100 %) of respondents were say that my group members follow
standards, rules and regulation of the organization.

Table 4.4

No Respondents & respondent percentage

In the organization participate equality in

decision moving process?

Yes 17 68 %

No 8 32 %

Total 25 100 %

Based on the above table 17 (68%) of respondents were say that employees participated equally
decision making, while but 8(32 %) of respondents were say that all employees not equally in
participation decision making process. The reason of identify problem and opportunity more
effectively to improve decision equality and acceptance and encourage participation.

Table 4.5

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No Item Respondents

What it the importance of leadership in the Frequency Parentage

organization?

A. motivating 15 60 %

B. creating confidence 5 20 %

C. creating guidance 3 12%

D. to manage the employee 2 8%

Total 25 100 %

Based on table 4.5 15 (60 %) of respondents were said that the importance of leadership in the
organization was motivating and 5 (20 %) of respondents were for creating confidence and 3
(12%) of respondents said that for providing guidance and 2(8%) to manage the employee
generally majority employees say that leadership was to motivating employees in the
organization.

Table 4.6

No Item Respondents

What types of leadership style Frequency Parentage

follow the organization?

A. autocratic leadership style 0 0%

B. Laissez fare leadership 3 12 %

style
C. Bureaucratic leadership 7 28%
style
D. democratic leadership style 15 60 %

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 Total 25 100 %

Based on table 4.6 from the total respondents 15(60%) of respondents said that organization
follow participative leadership style and 3(12%) of respondents said that organization follow
laissez faire leadership style, 7 (28%) of respondents said that organization follow Bureaucratic
leadership style and no autocratic leadership style generally organization follow we conclude
that the leadership style of the organization is democratic of leadership .this style assume that
the employees are intelligent and educated adult capable of managing their on affairs in
responsible manner and they react positively to opportunity for expiring their natural human
attribute and negatively to deprivation of such opportunity .in this leadership style ,subordinate
are involved in decision making un like autocratic this leadership is centered on the subordinate
contribution . Table 4.7

No Item Respondents

Do you have effective leader in your Frequency Parentage

organization?

Yes 19 76 %

No 6 24 %

Total 25 100 %

Based on table 4.7 from the total respondents 19(76%) of respondents were said that there is
effective leader in our organization and 6 (24%) of respondents were said that there is no
effective leader in your organization. To sum up we can concluded have effective leader in the
organization.

Table 4.8

No Item Respondents

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 Does your manager give a chance to discuss with Frequency Parentage
him?

Yes 22 88 %

No 3 12 %

Total 25 100 %

Based on the table 4.8 from the total respondents 22(88%) of the respondents were said that
indicated that, there supervisor gives them a chance and opportunity to participant in discussion
with him .thus, we conclude that employees is participation with works in decision making
processes is one indicate of democratic leadership style in the organization.

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Table 4.9

No Item Respondents

Do you have schedule the work to be done? Frequency Parentage

Yes 25 100 %

No 0 0%

Total 100 100 %

As shown the above table 4.9 from the total respondents 25(100%) of respondents were said that
have the schedule of the work done in our organization.

Table 4.10

Item response respondent Percent

Does your yes 12

organization grant
48%
incentive for
encouraging your job
performance?

no 13 52%

Total 25 100%

from above table 4.10 the respondent 12(48%) respond that the organization grant them
incentive for encouraging their job performance and they are 13(52%) respond there is no
incentive encourage job performance .here we see that the organization grant incentive for some

32
of the employee for those who are performing the given job well depending on their job
performance.

Table 4.11

Item Respondent response Percent

What is the goal of the

organization does it focus on
employees, only works and
employers and works?

Employees 5 20%

Only works 8 32%

Employees and works 12 48%

Total 25 100%

Based on table 4.11 it can be understood that 5(20%) of the respondent that responded that goal of
organization is focused on employees, whereas 8(32%) respondent say that only works the goal of the
organization and the riming 12(48%) respondent say that responded that, the goal of the organization is
focused employees and works rather than only employees and only works.thus,the organization which
focus on employees and works in more effective than the organization which focus only on works
because of that, when the organization focus on employee , and facilitate and encourage them through
award and other prize ,the employees become motivated and their tasks in efficient.

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Item Respondent response Percent

How are the decision made in

the organization?

Top down 10 40%

Bottom up 7 28%

Vertical 5 20%

Horizontal 3 12%

Total 25 100%

Based on the above table 4.12, it can be seen that almost all of the respondents 10(40%) have
confirmed that decision are made from top down, and the other 7(28%) respondent to responded
bottom up decision making in the organization, 5 (20%) respondent to responded vertical line
decision are made in organization, and the other remaining 3(12%) respondent said that
horizontal decision made in the organization. In general the majority respondent to respond top
to down decision are the best decisions which participate the subordinate this one quality of
democratic leadership style. Table 4.12

Item Respondent response Percent

How does the leader control

performance of the employees
in the organization?

By given encouragement 15 60%

By reduce salary 4 16%

By decreased level of work 5 20%

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Discharge of the employee 1 4%

Total 25 100%

Based on the above table 4.13 all the respondent 15(60%) respondent to respond by given
encouragement ,4(16%) respondent to responded by reduce salary of the
employee ,5(20%)respondent to responded by decrease the level of work employee and the
remaining 1(4%)respondent to responded discharge of the employee in the organization. In
general majority respondent to respond by encouragement of the employee to used democratic
leadership style.

Open ended questionnaires interpretation

 The relationship of effective leadership and employees performance

 Most of respondents were said that if one organization have effective leader there have good
employee’s performance.
 According to from the total respondents above 70% of respondents were said that leader of
the organization was motivate employees by giving encouragement and by other motivating
action.
 The factors of employees of performance there are many situation affect employees
performance live self-understanding, communication, leader experience and confidence those
are the main factor of employees performance.
 Based on organization employees respond above 65% of respondents were satisfied in
current leader.

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 CHAPTER FIVE

CONCLUSION AND RECOMMENDATIONS

5.1. Conclusion
The major emphasis of this study was to investigate the role of effective leadership in
employee’s performance Dashen Bank in injibara branch. Effective leadership has great role of
employees moral and satisfaction and achieves organizational objectives.

 Majority of respondent were within age group was 30-40 years and educational level was BA
degree and males employees were dominated in the organization.
 Majority of respondents were work experience was fond above 4 years and from the to talk
respondents majority of respondents were married.
 In leader control employees performance by giving encouragement.
 In the decision making process aspects all employees of the organization were not equally
participation.
 The study indicates that effective leadership has importance for employees and
organizational objectives.
 From the study concluded that cannot say have full effective leadership in the organization
because many good leader quality has difficult for proactive in the organization.
 The study indicatives that effective leadership and employees’ performance were have
positive relation in many different aspects.
 Generally leader of the organization was motivating employees other than punishment.
 To conduced the study that affect other different factors like self – understanding,
communication, leader experience and confidence those are the main factor of employees
performance.

5.2. Recommendation
The following recommendations were giving based on the problems of the bank finding and
beloved to solve the problems of the bank.

36
 Employees of the bank should be participating in decision making process because any
employee’s idea is essential for organization growth.
 Leader of the bank is should be follow participative leadership styles.
 Leader of tough bank should be control performance of employees by motivation, not by
punishment some respondents were said that leader control employee’s performance by
reducing salary and decrease learning opportunity. But this kinds of employees performance
method is not good was.
 Finally leader should be encourage research and development program because of minimize
organization problems research must be necessary. But most of employees of organization
not voluntary to fill the questionnaires

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 Appendix
Injibara university
COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT

Questionnaires for analyzing the role of leadership on employee’s performance in the case of
Dashen bank Injibara branch. In partial fulfillment of BA degree in Management. So the prime
objective of this questionnaires is to gather information that can assist our to accomplish our
research project.

The study is entirely for academic purpose and all response you provide these study will remain
confidential we are grate full for your kind cooperation in advance!

General direction

Put in circle inbox in front of your response choice.

Please give short justification when it is needed.

Personal detail

1. Sex a. Male b, Female

2. Age a, 18-25 b, 26-35 c, 45-65 d, ,above 65

3. Educational back ground a, below grade 12 b, grade 12 complete

C, Diploma d, first degree and above

4, marital status of the workers?

a, marriage b, single c, divorce

5. Do you know the strategies that the dashen bank follows? A,Yes b no

38
6, what is the importance of leadership in the organization?

a, motivating

b, creating confidence

C, creating guidance

7. Are you satisfied by dashen bank customer service delivery.

a, Yes b, no

8 How do you evaluate your satisfied reason?

a, High b, medium c, low

9, Do you have effective leader in your organization?

a, Yes b, no

10, Do you belief if have effective leader and positive relationship with employees performance

a, yes . b, no

11.if there any customer complaint mechanism to ward customer service handling strategies ?

a, Yes b, no

12, Leander motivate employees in your organization?

a, yes b, no

13. Do you express your compliant freely? a, Yes b, no

14. Are you employee of willing to help their customer? a, Yes b, no

15.if yes the question number 14 how do you rate their willingness?

a, Very high b, medium c, high d, low

16 Do you have enough awareness toward customer service delivery of your corporation?

a, Yes b, no

17, what kind of leadership style does your organization follows?

a, autocratic b, democratic c, bureaucratic

39
18, how work is done in the organization?

a, by giving encouragement

b, by punishment

c. others specify

19 what is the goals of the organization does it focus on employees and workers or works?

a, employees and works

b, works

20 , in the organization are all people participate equal in the organization ?

a, yes

b, no

21, how are the decision made in the organization?

a, top down

b, bottom up

22, are you satisfied with your manager leading style?

a, yes b, no

23 , does your organization grant incentive for encouraging your job performance ?

a, yes

b, no

24, is there sufficient time for the workers?

a, yes

b, no

25,is there any employee turnover with related to inappropriate leadership in your organization?

a, yes

b, no

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Interview related interview for dashen bank manager

1 What type of service handling do you proved?

2 Do you think that designed strategy appropriate for handling customer objective?

3 Is your current strategy is necessary in the future?

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