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THE IMPACT OF LEADERSHIP SKILLS ON EMPLOYEE PERFORMANCE IN STERLING BANK, LAGOS STATE, NIGERIA

CHAPTER ONE

INTRODUCTION

1.1. Background to the Study

Across the world, the success and effectiveness of any organization can be traced to the performance of its employees. This is because employees are an organization's most valuable asset and also they are the most difficult resource for any organization to manage. Therefore, the ability to attract, retain and develop talented employees is a key feature of a successful business and effective leadership. Hence, the performance of employee is defined as the ability of an employee to accomplish a given task at the appropriate time, while leadership skills refers to the skill adopted by a leader to effectively run and manage a group of employees in an organization towards accomplishing organizational goals.

In Europe, the effectiveness and success of an organization relies on the mangers ability to provide a motivating and enabling environment for its employees (Armstrong, 2015). The challenge for leaders today is to keep the staff motivated, which will enhance their commitment and overall performance in the workplace. A leader has to know the habits of each employee and thus apply the suitable leadership skill that will motivate each different employee (Dale, 2018). By understanding the employees' needs, a leader will be in the right position to understand what pattern of leadership skill to use to keep them motivated and stay satisfied in their job.

In the United State of America, a lot of organizations leaders have complained that employees are displaying poor work attitudes at an alarming rate and are not committed to helping organizations achieve their set goals and objectives (Burton, 2015). Leading and managing an organization is a complex task that requires a unique mix of skill leaders who have to utilize their natural strengths, they also have to search relentlessly for ways to close their own performance gaps and improve their behavior. Without continuous improvement, an organization’s capabilities will be severely limited. In short, if leaders do not constantly raise their game, they will suck all the energy and employ engagement out of an organization, (Bunderson & Sutcliffe, 2016).

In China, with the level of competition in the business environment around the world, it is important that organizations ensure that their employees are able to give their best performances to help the organization gain an edge over their competitors (Chen, 2014). In the manufacturing industry, employees’ performance is considered very germane in sense that it is an industry that cut across the world. As such the level of employee performance is critical to organizational sustainability in Chain.

In Asia, a lot of organizations are faced with lack of poor communication and feedback. There seem to be two extremes in this area: either people do everything in their power to avoid confronting others and holding them accountable or they relish any opportunity to chew people out, belittle them, and crush their spirits (Blake & McCanse, 2012). A lot of organizations have countless leadership teams which the number-one problem was a lack of honest, constructive, and open dialogue about team members’ practices, styles, skills, or behaviors (Akram, Alam, Ali, & Mughal, 2012).

In Africa, for instance in Zambia, Shafighi (2013) noted that the performance of employees had become a huge challenge due to the presence and representation of many cultures in the modern working environment in Zambia. According to Kuvaas and Dysvik (2017), most working environments in Zambia are diverse and multicultural as a result many employees have a variety of personalities which make them unique. However, this as well implies that, they have differing needs that propels them to give their best performance at work each day. In Ghana, as technologies change practically at the speed of light, it’s vital for banks and other organizations to innovate or be left behind (Skouzes, & Posner, 2015). However, a lot of organizations such as banks started their careers and businesses prior to many of these technologies such as internet banking, mobile app, etc., even existed (Galbraith, 2016). Organizations can be vital for integrating new technologies, in particular mobile app development, and cloud computing. Lack of direction is one of the most common organizational issues encountered in many organizations in Ghana.

In Nigeria, developing a solid organization in Nigeria takes hard work and a keen awareness of the environment that exists in a business (Oyewobi, Windapo, & Rotimi, 2013). Leaders are accountable for the performance of their organization which is dependent on employees’ performance. Leadership is an indispensable requisite for the success of any organization (Malik, 2014). A leader with the right set of skills is expected to direct workers behaviours toward achieving organizational predetermined goals. The performance of an employee is an important determinant of the organizational success or failure. According to Nwachukwu (2015), the active role they play towards a company’s success cannot be underestimated. Employee performance can be manifested in improvement in production, creativity, productivity, work quality and so on. The performance of employee is vital for the success of every organization and profitability in this dynamic environment (Chen, 2014). Nowadays, organizations require such type of employees who contribute more than their job scope and far from goals expectations. Most of the organizations copping with contemporary challenges put more emphasis on employee performance (Gruman & Saks, 2017). Employee performance is a key factor that contributes directly to the performance of the company. Organizations today, with increased competition in the business arena, are keen to boost employee performance in order to enhance their profitability, market reach and brand recognition.

Leadership skills are the tools, behaviors and capabilities that leaders should have in promoting well-being of the employees and leading to up-gradation of the organizations (Leadership Skills, 2010). The primary job duties of the leaders are focused towards directing and motivating employees towards the implementation of job duties and achievement of goals and objectives (Tony, 2020). The true leadership skills involve helping the individuals grow in their own abilities. The leaders gain success in the implementation of leadership skills, when they facilitate others to grow in their own abilities. The leadership skills are numerous, such as communication, motivation, creativity, problem solving, feedback, implementation, delegating, knowledge, and work ethics and so on (Tony, 2020). The leaders need to be aware that in performing well in their jobs and achieving the desired goals and objectives, they need to possess the essential skills. Furthermore, they need to understand what kinds of skills; they need to put into operation in various types of situations and settings (Souders, 2020). The implementation of skills needs to be put into operation in such a manner that they should be beneficial to the employees as well as the organization as a whole.

Therefore, this study will investigate the impact of various leadership skills (that is, problem solving skills, knowledge skills and implementation skills) on employee performance in Sterling bank, Lagos state, Nigeria.

1.2. Statement of Research Problems

In all types of organizations, a leader needs to focus upon up-gradation of leadership skills. Since, it is regarded as fundamental in leading to effective functioning of the organization and employee performance. The 21st century presents leaders with the responsibility of both leading employees and responding to the needs of customers who are more ethnically and culturally diverse from each other. Various types of leadership skills have been observed to have an effect on employees’ performance. However, despite the importance of leadership skills in enhancing employee performance and organizational efficiency, there is dearth of studies showing the extent to which leadership skills affect employee performance in the banking industry, using Sterling bank, Lagos state, Nigeria. As a result, there exists a gap in this area.

For instance, Liao and Wen (2015) revealed that achieving employee engagement in an organization is very complex, mainly because of the intrinsic differences in the degrees of job engagement among employees. These differences may be as a result of the differences in personality, a key individual difference variable. On the other hand, according to Blau and Boal (2011), leaders with low job motivational factors will likely experience low employee engagement and will result into lower employees’ productivity and higher absenteeism and turnover rates. However, not much study has been conducted on employee engagement which is why this present study will examine the impact of problem solving skill on employee engagement, as represented as objective one for the study.

Similarly, Leng (2014) did research on the impact of laissez-faire on employee creativity in Retail Industry in Malaysia. Sample size used by the researchers is 384. The researchers used questionnaires as the research instrument. SAS software version 9.3 was used to run tests of reliability, Pearson correlation and linear regression. The findings concluded that there was a significant impact of laissez-faire leadership styles towards employee creativity. Also, not must have been examined in this regard which is a gap this study will fill. In addition, this present will adopt a more comprehensive technique such as the ANOVA and regression analysis in analyzing the data collected, which will offer more robust findings for the study.

According to Shahriari, Mehdi, Pirhossein, and Jamshid (2015), many employees are found in various positions in different organizations that are not related to their discipline and this has negatively affected the performance of many organizations because the employees gives in return low job quality and low performance. In spite of the importance of employee job quality to the performance of an organization, however, little or no study has been carried out in this regard, therefore this pose as a gap which this objective will fill by examining the impact of implementation skill on work quality.

Based on the above reviewed findings, it can be observed that no study was conducted on the impact of leadership skills on employee performance in Rite Foods Plc, which is a gap identified. Thus, a research into the impact of leadership skills on employee performance may be necessary in finding the type of leadership skills that influence employees’ performance in Sterling bank, Lagos state, Nigeria.

1.3 Objectives of the Study

Fundamentally, the primary objective of the study is to investigate the impact of leadership skills on employee performance in Sterling bank, Lagos state, Nigeria. Specifically, the following objectives are to;

1.  assess the impact of problem solving skills on employee engagement in Sterling bank, Lagos state, Nigeria.

2.  investigate the impact of knowledge skills on employee creativity in Sterling bank, Lagos state, Nigeria.

3.  find out the impact of implementation skills on work quality in Sterling bank, Lagos state, Nigeria.

1.4 Research Questions

The questions of interest in the study are:

1.  What is the impact of problem solving skills on employee engagement in Sterling bank, Lagos state, Nigeria?

2.  What is the impact of knowledge skills on employee creativity in Sterling bank, Lagos state, Nigeria?

3.  What is the impact of implementation skills on work quality in Sterling bank, Lagos state, Nigeria?

1.5 Research Hypotheses

Based on the objectives, the following hypotheses were expressed in their null form:

Ho1: Problem Solving Skills has no significant impact on employee engagement in Sterling bank, Lagos state, Nigeria.

Ho2: Knowledge Skills has no significant impact on employee creativity in Sterling bank, Lagos state, Nigeria.

Ho3: Implementation Skills has no significant impact on work quality in Sterling bank, Lagos state, Nigeria.

1.6. Scope of the Study

The study focuses on the leadership skills on employee performance in Sterling bank, Lagos state, Nigeria. The study is streamlined to leadership skills variables namely problem solving skills, knowledge skills and implementation skills; and employee performance variables which are, employee engagement, employee creativity, and work quality. The demographic location of this study is Sterling bank, Lagos state, Nigeria. The unit of analysis of the study is the employees of Sterling bank, Lagos state, Nigeria at Junior, Middle level, and Senior Management positions.

To achieve this objective, this study adopts a primary source of data, while data is collected through the use of a self-structured questionnaire which is administered to the employees in Sterling bank, Lagos state, Nigeria. The rationale for using Sterling bank, Lagos state, Nigeria is mainly due to the fact that they have a huge workforce and it is essential to understand how various leadership skills enhanced employees’ performance in the organization.

1.7. Significance of the Study

The finding of this study is expected to contribute to the existing literature in the field of leadership skills and employee performance. In addition, this study will act as a reference point for further research to refine and extend the present study.

The finding of this study is of significance to organizations’ management in the sense that it will help them identify why employees react positively to a particular leadership skill of a leader and also help them discover what makes employees stay motivated and satisfied with their job.

Furthermore, the finding of this study is important to the employee in sense that it will educate them on their roles and obligations to the leadership in the organization and other related matters.

In addition, the finding from the study is important to policy makers since they have the capacity to formulate policy guidelines that will be relevant and sensitive to the forces that influence the banking sector in Lagos State, and Nigeria as a whole.

And finally, this study will assist other researchers to further their studies on areas of interest not exploited yet in the study.

1.8. Operationalization of the Variables

The dependent variable is employees’ performance, represented by Employee Engagement (EE), Employee Creativity (EC), and Work Quality (WQ). On the other hand, leadership skills, being the independent variable, is proxied by Problem Solving Skills (PSS), Knowledge Skills (KS), and Implementation Skills (IS)

Where Y= Dependent variable

             X= Independent variable

Y= f(X)

X= Leadership Skills

X = f(x1, x2, x3,)

x1= Problem Solving Skills (PSS)

x2= Knowledge Skills (KS)

x3= Implementation Skills (IS)

Y= Employees’ Performance

Y= f(y1,y2, y3)

y1 = Employee Engagement (EE)

y2 = Employee Creativity (EC)

y3 = Work Quality (WQ)

The three specific objectives were:

To assess the impact of problem solving skills on employee engagement inSterling bank, Lagos state, Nigeria.

Y1 = f (x1)

Y1 = b0 + b1x1 + u

To investigate the impact of knowledge skills on employee creativity in Sterling bank, Lagos state, Nigeria.

Y2 = f (x2)

Y2 = b0 + b1x2 + u

To find out the impact of implementation skills on work quality in Sterling bank, Lagos state, Nigeria.

Y3 = f (x3)

Y3 = b0 + b1x3 + u

1.9. Definition of Terms

Leader: is an appointed individual with the ability to organize other subordinates, (Bell, 2012)

Performance: The accomplishment of a given task measured against preset known standard of accuracy, completeness, cost and speed, (Terrington, 2015)

Leadership: is the act of persuading/inspiring subordinates to perform and engage in achieving a goal, (Riccomini, 2015)

Employee Performance: refers to the performance or effectiveness of an employee on a given task towards organizational performance. Employee performance is vital for the success of every organization and profitability in this dynamic environment, (Chen, 2014).

Work Quality: refers to the value of work delivered by an employee.

Problem Solving Skills: is the ability of a leader to identify the nature of a problem, deconstruct it and develop an effective set of actions to address the challenges.

Knowledge Skills: refers to the attributes required to carry out a job effectively.

Implementation Skills: refers to the process of carrying out, execution or practice of a plan in order to achieve a set goal.

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