EFFECT OF TRANSFORMATIONAL LEADERSHIP ON EMPLOYEE PERFORMANCE: A PERSPECTIVE OF LEADER’S INFLUENCE

Banking sector, employee performance, leader’s influence, transformational leadership

Abstract

The study examined the effect of transformational leadership on employee performance in the banking sector based on
the leader’s influence perspective. Literature review revealed that the ability of the leader to influence the followers is
centred on idealised influence (model the way) and inspirational motivation (communicating appealing vision) factors
of transformational leadership. The motivation for the study was because information on how idealised influence and
inspirational motivation affect employees performance in the banking sector in Sub-Saharan countries had been rarely
addressed. Where addressed, the findings are tokenistic, discrete and imprecise. A sample of 132 employees who were
working in the banking sector was surveyed using a self-administered structured questionnaire and a simple random
sampling technique. Multiple linear regressions were used to estimate the relationship between the predicators and an
independent variable. An in-depth interview was also employed to collect qualitative data from ten employees selected
using the purposive sampling technique from ten different banks. Thematic analysis was used to analyse qualitative data
to supplement the quantitative findings. The study revealed that idealised and inspirational motivation positively
influence the performance of employees in the banking sector. The study has got four knowledge contributions. Firstly,
contrary to other empirical studies, this study adopted mixed methods research design. Secondly, the study revealed
that employee’s performance is enhanced if supervisors become good role models and at the same time inspire
employees to commit to the bank’s vision. Thirdly, idealised influence and inspirational motivation factors are
significant to the employees performance and are the learned behaviours. Fourthly, leaders should be careful with their
decisions and actions because employees are likely to emulate the leaders' behaviours by trusting that whatever they do
is correct and acceptable