Transformational Leadership Style and Staff Performance of Commercial Banks in Kenya: A Survey of Commercial Banks in Nairobi City County
Keywords:
Idealized Influence, Inspirational Motivation, Intellectual Stimulation, Individualized Consideration, Staff Performance, Commercial Banks, Nairobi CountyAbstract
The staff performance of commercial banks has been deteriorating overtime as per the findings of survey done by PWC (2013) that established that 97% of Kenya business leaders agree that their firms needed to retain talent by adopting good leadership styles. Leaders influence employee's job satisfaction which eventually affects employee job performance and ultimately overall organizational performance. The study determined the influence of transformational leadership style on employee performance: A case study of commercial banks in Nairobi County. The specific objectives of the study were, to establish the effect of idealized influence, inspirational motivation, intellectual stimulation and individualized consideration on the staff performance of commercial banks in Nairobi County. The target population for this study was 5000 employees in commercial banks within Nairobi County. Random sampling was used to select 196 employees from seven commercial banks sampled purposively. Primary data were collected using a questionnaire. The study found out that idealized influence has a positive and significant effect on staff performance (B=0.125, p=0.017), inspired motivation has a positive and significant effect on staff performance (B=0.130, p=0.004), intellectual stimulation had a positive and significant effect on staff performance (B=0.201, p=0.021). Similarly, results showed that individualized consideration had a positive and significant effect on staff performance positively and significantly related (B =0.124, p=0.000). The study advocates for the recognition of individual efforts, giving personal compliments for doing outstanding work, provides rewards such as praise and acknowledgement of effort for achievement of specified goals, encourage personal attention to employees who look neglected and lonely, encourages individual risk-taking, innovation, freedom and uniqueness at work and give individualized bonuses and commissions for good performance attained. The findings from this study have implication to the theory, academia, policy formulation and industry practice. The study is significant to the banking industry sector and the service industry. The study brings out the main areas of concern in the performance of staff in service industries. It gives suggestions on how transformational leadership can be fully applied to enable the service sector to achieve its goals and objective.
Keywords: Idealized Influence, Inspirational Motivation, Intellectual Stimulation, Individualized Consideration, Staff Performance, Commercial Banks, Nairobi County
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