The relationship between leadership styles and employee performance

The main purpose of this paper is of twofold: to investigate the relationship among effective leadership and employees’ job performance at TVS Pvt., Ltd., and Solamalai Automobiles Pvt,. Ltd., from Madurai and to assess the employees’ preference over leadership behaviours out of transformational, transactional and laissez faire leaders. A quantitative research design had been employed for the present study. The research instrument consisted of 40 questions covering transformational, transactional and laissez faire leadership and the various performance variables. A total of 200 questionnaires were issued and received 158 valid replies. Descriptive statistics and the regression analysis were used to find out the most relevant leadership styles in the selected enterprise and the relationship of these leadership styles with the selected outcomes such as extra effort, effectiveness and satisfaction. From the study, it was concluded that the transformational leadership was able to predict extra-effort, effectiveness and satisfaction of the employees in the case of both full-scale and sub-scale models. In the case of Passive Leadership, it was observed a negative significance on extra-effort and effectiveness, but, not on satisfaction. This implies that the avoidant behaviour was not at all satisfying the employees in any sense. The Transactional Leadership did not have any significant predictability in the level of Extra Effort, Effectiveness, or Satisfaction. However, when one of the sub-scale of Transactional Leadership (i.e. Management by Exception (Active) was reversed, it significantly predicted Effectiveness and Satisfaction but not Extra Effort.