THE IMPACT OF LEADERSHIP ON THE PERFORMANCE OF EMPLOYEE IN DASHEN

BANK

A RESEARCH PROPOSAL PAPER SUBMITTED TO MANAGEMENT DEPARTMENT IN

PARTIAL FULFILMENT OF BA DEGREE IN MANAGEMENT

PREPRED BY:SELOME AGIDEW

ADVISER:FEREW ALEMU

JIMMA UNIVERSITY COLLEGE OF BUSSINESS AND ECONOMICS.

DEPARTMENT OF MANGEMENT

May,2018

Jimma,ethiopia

Acknowledgement

First and for most I thanks to my creator for all things he did to me. Then, greatly Jimma
University, The College of business and economics and management department for their
cooperation.

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 I would like to express my deep gratitude to my advisor Mr. Ferew Alemu for his genuine
advice, critical comments and closer supervision.

Abstract

The study was conducted on the impact of leadership on the performance in Dashen bank in
main branch. In order to achieve the proposed objective the researcher was used both primary

2
and secondary data. Primary data were collected through questionnaires, unstructured interview
and observation. Whereas secondary data was obtained from the organization published and un
published manuals. The sampling technique that would beuse in is judgemental sampling. After
data gathered from prospective source then it were analysed using descriptive method.

II

Table of content

Content page

Acknowledgement ...................................................................................................................I

Abstract ...................................................................................................................................II

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Chapter one 1

1. Introduction 1

1.1 Background of the study 1

1.2 Statement of the problem 2

1.3 objective of the study 2

1.3.1 General Objective 2

1.3.2 Specific objective 3

1.4 Significance of the study 3

1.5 Scope of the study. 3

Chapter two 4

2. Literature Review 4

2.1 Definition of Leadership 4

2.1.1 Leadership style (Hedged, 1991) 6

2.2 The historical important studies on leadership 7

2.2.1 The lowa as leadership studies 7

2.2.2 The Ohio State Leadership Studies 7

2.3 Traditional theories of leadership 8

2.3.1Group and exchange theories of leadership 8

2.3.2 Contingency theory of leadership 8

2.3.3. Path Goal Leadership Theory 9

2.4 Modern theoretical process of leadership 9

2.4.1 Charismatic leadership theories 9

2.4.2 Transformational Leadership Theory. 9

2.4.3 Social cognitive approach 10

Chapter -3 11

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3. Research Methodology 11

3.1 Data Types and Sources of Data 11

3.2. Methods of data collection 11

3.3 Methods of Sampling 11

3.4 Methods of Data Analysis11

Chapter Four 12

4.0. Cost budget and time plan

Chapter one

Introduction

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1.1 Background of the study
Leadership implies the ability to influence people towards the achievement of
the organizational objective (draft, 1997:pa356). This definition gives the idea
that leaders is involved with people understand ably as leader is involved with
people, they develop act that can affect the performance of employees.

Leadership is probably the most important characteristics people need to have

to be effective on the job leader can have various styles depending upon their
behavior and situation leadership is study from different angles of perspectives
(stoner, 1997:pa231).

Organization success largely based on situation strength of the leaders to get

things do efficiently and effectively through his /her employees , the influence
that leader is able to exercise come from the various sources depending on
individual. I.e. positional, personal, both (Hodge, 1991:pa432).

People with ability to lead most exist in all form of organizations as the major
elements of organization are people that must be lead towards common
objective. (Ussher 1997: pa231).

The earliest leadership theory is the classical thought. This theory implies the
idea that leadership is a trait which enables managers to get things do through
other people. For instance ability of persuasion is regarded a good leader trace.
(Hodget,1991:324).

One ways of measuring which leadership style achieve the best result through
his/her employee, by evaluating subordinates who is under his/her supervisor
and control and under methods in by conduct instructed interview with
his/her immediate supervision .(Pessles,1999:pa722).

1.2 BACKGROUND OF THE ORGANIZATION

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Among Banks in Ethiopia, Dashen bank is the bank that has a great market share
with 66 branches.

From its establishment in 1995 up to now, Dashen bank play a great role in the
economic development and progress of a country. Currently Dashen bank has about
22200 account holders and more than 1000 employees.

As we know Jimma is one of the well known coffee traded regions in Ethiopia, so there
are many traders and farmers who engage in the activity of coffee trade and
production of coffee for their effective activity. The people of Jimma town and its
surrounding did not take any long time to introduce to the banking services when the
Dashen bank of Jimma branch established in 1996 G.C (From the bank manual).

Dashen bank of Jimma branch was established at the construction cost of 15 million
Ethiopian birr, at the center of Jimma town.

From its establishment up to now the bank provides different services like, current
account, saving account, loners and other services to its customers. The banks also
make profits for its shareholders and distribute these profit interims of dividend (From
the bank manual).

Vision of the organization: In as much as mount Dashen excess all other mountains in
Ethiopia. Dashen bank will continue to prone unparalleled in banking service.

Mission of the organization: Provides efficient and customer focused domestic and
international banking services. The organizational structure of the bank constitutes of
the general assembly of share holders at the top followed by board of directors, the
presidents, the vice presidents and various departments division and area bank (From
the bank manual)

1.3 Statement of the problem

Employees ability and motivation to perform a task depends or the leaders

behavior. The problem with the managers leading styles in variesfrom one
manager to the other. Accordingly, employee motivation and efforts to perform

7
task vary from one another. In most recent years there are various researchers
who have fire to show significance of leadership on employee’s performance
(Lousier, 1993:pa321).

As a managerial function leadership constitutes one aspects of mangers

responsibility along with planning, organizing and controlling the major aspect
that makes leadership more important in management is because of it is the
leader of that organization that must be capable of introducing changes in the
organizations and also make sure that employees have the united vision forced
the desired level (Planket, 1997:pa134).
The main reason for conducting this study will to answer the following
questions.
• What are the existing situations of leadership in the bank?
• How is the employee’s performance through their respective leaders?
• What is the attitude of employees on leadership styles?
• If there relation between leadership style and organization success.

1.4 objective of the study

The overall objective of the study was to make decision regarding the impact of
leadership on employee’s performance. The study has both general and specific
objectives.
1.4.1 General Objective
The main objective of the study was to assess the impact of leadership on
employee’s performance in the organization.

1.4.2 Specific objectives

The specific objective would the following

• To identify the current situation of leadership.

• To assess whether the employees are achieving their objective or not.

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 • To indicate the best leadership that goes in one with the current
situation.

• To investigate the relation between the leadership and organization

success

1.5 Significance of the study

Leading as the main function of management is the most important aspects

achieving ones objectives. Leading plays an important role in success of
organization words its objective.

Leader can affect employee’s performance depending on how they lead their
subordinates.

Therefore, it would possible to undertake as study on relationship to identify

the following advantages.

• it tells the management existing problems in the system

• It would helpful for maintains good and cordial relationship among
implies and the employers.

1.6 Scope of the study.

The study was dealt with the impact of leadership on employees
performance at Dashen Bank in Jimma town which located in south west
Addis Ababa at a distance of 360km, in Oromia regional state.

The study wouldconduct to identify relatively stable and best of leadership

as being required for organization success. Therefore, it will be essential.
Because of time and cost the researcher not included banks guard and
illiterate workers.

1.7LIMITATION OF THE STUDY

While conducted this study the researcher faced different obstacles such as shortage
of reference material because some contents of the bank are strictly forbidden for
external party, shortage of time, the respondents have less interest to give information,

9
there were careless and emotional response, managers were busy to give enough
information.

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11
Chapter two

2. Literature Review
Impact of leadership on the performance of employees is the major issues in this study .2.1
Definition of Leadership
Leadership as a concept has been defined in many ways. One of the definition states that
leadership is the process of influencing people and providing an environment from them to
achieve team or organizational objective (Mecshane S.L.1994:pa321).

Organizational success largely depends on the leader ability to influence and get things done
effectively and efficiently through his /her employees. In the absence of such ability of manager,
and organization will face a problem in achieving its objective (Hodget, 1991:pa432).

Health human relation in the work place can build by integrative or problem solving approach in
which both parts employees and leaders) again satisfaction of their respective need in a
cooperative manners, and not at the expense of other one another( Agorval,1982 page188)

.Leadership is probably the most important characteristics that people need to be effective on the
job. Leaders can have different styles based on their behavior and position leaders ability is
studies from different aspects (stoner, 1997:pa234)

Leadership is to strength and direct people to the attainment of organizational goal (Daft,
1997:pa321). This definition captures the idea that leaders are involved which subordinate and
can affect the performance of the employees in organization.

The major aspect that makes, leadership more important in management is because it is the
manager at the organization that must be capable of introducing the changes in the organization
and also make sure that employees have the unified vision towards the desired goal (Lussier,
1997:pa321)

The tradition relationship between labor and leaders in the United States has been adversarial.
Once classer examination, represents that both labor and management must co-operate to some
extent in order to remain strong labor needs Jobs, group working conditions and fair wages and
benefits, on the other hand management needs to maximize profits, supplying quality product

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and services. Labor is strong when it is cooperates with other labors in proper manner so both
labor and managers benefit from a strong cooperation and in and increase effectiveness of the
work. (Ivancivich, 1998: Pa554).

People with the ability to lead must exit in all form of organization as the major elements of the
organizations are people that must be lead towards one common objective. So many researchers
have been conducted to identify the best leadership or the best type of leader. Most approaches
in leadership tend to focus on the actions and behavior of leaders( behavioral theories) and some
describe on the characteristics of leaders( trait theories of leaders) and some describe that it
also depends on the situation( situational theories ) Hodget,1991:pa213).

Employee’s ability and motivation to perform attack depends on the manager’s behavior. The
problem with managers leading style is wrong various from one manager to other accordingly
employee’s motivation and effort to perform task vary from one another. (Lussier, 1993:pa240).

In most recent years, there are various researchers who have tried to show significance of
leadership on employee’s performance. The study conducted in American show that there is a
great correlation between employees and the way their leader act (Lussier, 1993:pa243).

Coordination by all members of the organization is highly essential for implementing the change
to the desired and satisfaction level.

Employees must be able to share and understand the ideas and vision of the organization;
therefore it is the manager’s duty to act as the give and ensure coordinated some of purpose exit.
(Hodget, 1995:pa345).

The earlier leadership theory is the classical thought, this theory put toward the idea that,
leadership is a trait which enables manager, to thing done through their people. For instance
ability of persuasion is required as goal leader trail (Hadger, 1991:pa440).

In current years study attention has shifted from personality trait to the study of leadership
behavior (page, 1997). They identified two major behaviors called work centered and employee
cantered.

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Work cantered orientation structure is the extent to which the leader is task oriented and direct
subordinates to work activities towards goal attainment. And employees cantered is the extent
to which the leader is mindful, they tend to share decision with subordinates , encourage
participation and support the teamwork needed for high level of tasks accomplishment
(Hdget,1991).

Work cantered (concerns for tasks) leaders:

• This approach is also referred to as initiating structure, job centeredness and task
orientation.

• This considers leaders who are authoritarian, autocratic production oriented and activity
focused. A leaders with such behavior mostly tends to:

• Plan and define work

• Assign task responsibility

• Set clear work standard

• Urges for task completion

• Monitor performance results it’s persistently etc...

Employee centered (people centered)

Such leaders are known as democratic, considerate consultative and participation leaders. They
tend to share decisions with subordinates, encourage participation and support team work needed
for high level of task accomplishment. A leader with such behavior tends to:

• Act worming and supportive to followers.

• Develop social respect with followers

• Respect the feeling of followers

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 • Show trust and confidence in followers.

2.1.1 Leadership style (Hedged, 1991)

An individual known as Douglas Mgrerger developed these two approaches to leadership.
Theory x and Y are set assumption that are believed to characterize most managers and hence
reflect on their leadership accordingly.

Theory X

• Average people dislike work and whenever possible ,will avoid it

• People have active ambition and prefer to be directed

• People want security

• In order to get people to attain organizational objective it is necessary to use coercion,

control and threats of punishment.

Theory Y

Employees are more optimistic, dynamic and flexible philosophy which includes:-

• Work in inactively phenomenon and under the right conditions, people not only accept
responsibility but also sick it.

• People were self directed and self control in exercising their aims.

• Commines, to organizational objective, is function of the rewards associated with goal

attained.

• Creativity is wide spread throughout the population.

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2.2 The historical important studies on leadership
Unlike many other topics in the field of the organization behavior are a number of studies and a
considerable body of knowledge at leadership. Review of the better known classical studies can
help set the stage for traditional and modern theories of leadership (Luthns, F2001:pa324).

2.2.1 The lowa as leadership studies

A series of pioneering leadership studies conducted in the late 1930’s lied by LuthansF
(2001:pa345). Lowa is recognized as the father of group dynamics and as importance cognitive
theories. There are three (3) styles of leadership: authoritarian democratic and liaises fair 29 fair.
the authoritarian leader was very directive and allowed to no participation leader tend to give
individual attention when praising and criticizing , bur tried to be friendly or impersonal rather
than open hosting . The democratic leader encourages group decision and Lasses making. This
leader to be one of the groups inspires it. The lasses fair reader gives compute freedom to the
group (Luthans, 2001:pa563).

2.2.2 The Ohio State Leadership Studies

The Ohio state studies stated with premise that no satisfactory definition of leadership
existed .The Ohio state group was determined to study leadership regardless of definitions or of
whether it was effective or infective. In simple terms, the Ohio state factors one task or goal
orientation and recognition of individuals need and relationship (Wthans, f.2001:pa280).

2.3 Traditional theories of leadership

Before analyzing the current states of leadership research,it is important to examine the
theoretical development of that has occurred through the years / LuthansF F, 2005:pa421)

.2.3.1Group and exchange theories of leadership

The group theories of leadership have their roots in social psychological classical exchange
theories, in particular serves as an important basis for this approach, this means simply that the
leaders provide more benefits rewards than reads then burdens /costs, for followers.

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There must be a positive exchange between the leader and followers in order for group goals to
be accomplished, interaction continues, because members find the social exchange mutually
rewarding (Luthans, F 2001:pa254)

2.3.2 Contingency theory of leadership

After trait approach provide an adequate over all theory of leadership attention turned to situation
aspects of leadership. (Luthans F, 2001:pa432).

Fielder’s contingency model leadership effectiveness:-contingency model of leadership

effectiveness contained the relationship between leadership and favorableness of the situation.
Situational variableness was described by fielders in terms of three empirically desired
dimensional (whans, F.2001:pa378)

• The leader member relationship, which is the most critical variable in determining the
situation favorableness.

• The degree of task structure, which is the second most important input to the
favorableness of the situation.

• The leader’s position power obtained through formal authority, which is the third most
critical dimension of the situation.

Situations are favorable to the leader if all three of these dimension one high. In other words if
the leader is generally accepted and represented by followers and the task is very structured and
everything is “spelled out” and if great deal of authority and power are formally attributed to the
leader’s position, the situation is favorable. If opposite exists, the situation will be unfavorable
for leader (fielder, EF, 1997:pa280).

2.3.3. Path goal leadership theory

The widely recognized theoretical development from the contingency approach is the path goal
theory which was devised from the expectancy frame work of motivation theory .in essence , the
path goal theory attempts to explain the impact that leader’s behavior has an on subordinated
motivation , satisfaction and performance. Those are:-

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 • Directive relationship: subordinates know exactly what is expected of them and the
leader group specific directions. There is no participation of subordinates.

• Supportive leadership:- the leader is friendly and approachable and show a genuine
concept of subordinates.

• Participative leadership: - the leader asks form and uses suggestion from subordinate
but still make the decision.

• Achievement leadership: leaders sets challenging goals for subordinates and shows
confidence that will attain these goal and perform well. (Wthos, 2001:pa230).

2.4 Modern theoretical process of leadership

Besides the estimated trait goal, contingency and path goal theories of leadership a number
of other theories have emerged in recent years.

2.4.1 Charismatic leadership theories

Charismatic leadership is the old conception of leaders as being those who “by the force of
their personal abilities are capable of having profound and extra ordinary effect followers.
The charismatic leaders are characterized by self confidence in subordinates, high
expectations for subordinates, ideological vision and the use of personal example.
Followers of the charismatic leaders identify with the leader and the mission of the leader,
exhibit extreme loyalty and confidence in the leader stimulate the leader’s valve and
behavior, and derive set esteem form their relationship with the leader with one.

2.4.2 Transformational Leadership Theory.

Transform ways of being led to meet the challenge of dramatic changes (Luthan
2001:Pa345). On the basic of his research finding bass conclude that in many instance to
transactional leadership is prescription for mediocrity and that transformational leadership
leads to superior performance in organization facing demands for renewal and change
fostering transformational leadership through policies recruitment, selection

18
 promotiontraining, and development will pay off in the health,well being and effective
performance of today’s organization (bees, HB, 1990:pa234)

2.4.3 Social cognitive approach

Asocial cognitive approach can also provide a model for continues reciprocal interaction
between the leaders, the environment and the behavior itself. This would seem to be a
compressive and viable theoretical foundation for understanding leadership (Luthen, f,
2001:pa123)

Chapter -3

3. Research Methodology and design

3.1 Data Sources

The source of data that the researcher was used both primary data and secondary source of data.
The primary data are questioner, unstructured interview while the secondary data from
organization published and unpublished manuals.

3.2. Data collection

There are two method of data collection, primary and secondary data collection. Primary data
collection are through questionnaire and unstructured interview whereas, the secondary are
collected through or by using reviewing related literature. Open and closed ended questionnaires
are distributed to sample employee and staff interview will conducted with selected bank.

3.3 Sampling technique/design

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The study use sampling techniques to carry out the research. Specifically the researcher use
judgmental sampling to get enough information and free from any bias.

The researcher use judgmental sampling technique to collect data from unstructured interview
because relevant and accurate information can be obtained from the person who is more
concentrated with the issue to be interviewed.

Therefore, out of the total population of 60 employees the specified sample size 18 was served to
represent total population.

3.4 Methods of Data Analysis and presentation

Data analysis is the transformation of process to look for pattern and relation among group which
was made after collection of data through interviews and questionnaire. The data obtained
through questionnaire and interview was analyzed by using tables, percentage and interpretation
was given based on responses obtained from respondents and data was presented in a way of
tables and percentage. Generally the researcher uses the descriptive analysis method.

3.5 Organization of the study

This section describes how the paper is organized from chapter one up to chapter five. Chapter
one tells about background of the study, chapter two tells about literature review, chapter there
about methodology, chapter four tells about data analyze and discussion, and the last chapter tells
about conclusion and recommendation.

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Chapter Four

COST BUDGET AND TIME PLANE

4.1. Time budget

In order to manage the overall research process it needs time budget. The table given bellow
shows that the time that will be taken from topic selection to final presentation.

No A c t i v i t y O c t N o v D e c J a n F e b M a r A p r May J

1 Topic selection X

2 Preparation of research proposal X

3 Recommendation of comments to 1st draft of the proposal X

4 Typing of final proposal (submission) X

5 Collection of proposal X

6 Data collection X

7 D a t a a n a l y s i s X

8 Submission of first draft research report comment X

9 Typing of final report X

1 0 Submission of final research X

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 11 P r e s e n t a t i o n X

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4.2. Cost budget

In order to undertake the research process effectively and efficient, it is necessary to prepare cost
budget. The table given below shows the cost that is expected will be incurred in the research
process.

I t e m Quantity Duration in day Unit cost Total cost

P e r s o n a l c o s t

Researcher consumption 4 10 40 Br

T r a n s p o r t a t i o n 2 2 2 0 440 Br

T y p i s t 1 5 0 1 5 0

Equipment printing and duplicating 3 x 5 0 0 . 5 0 7 5 B r

P a p e r 2 9 0 180 Br

P e n 4 6 2 0 B r

P e n c i l 2 2 4 B r

R u l e r 1 1 0 1 0 B r

Miscellaneous expense 3 5 0

T o t a l 1269 Br

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23
Reference

 Hodgets R.M and Kurtako, K.D.( 1991) . Management 3rd edition Orland
Florida.

 Plunked W.Richard and attener, R.F (1997) management 5th edition

California wands worth publishing company.

 Me Shane S.L, Von glinow (1999) organization behavior 5th edition business
team management, effective team building.

 Lussier (1993) human relation in organization and skill building approach 2 nd

edition.

 James A.F stoner (1997) leadership and management 4th edition.

 Fielder, E...F (1997) leadership effectiveness New York McGraw hill

companies 4th edition.

 Luthan, Fred. (2001). Differences effect of incentive motivation work

performance organizational behavior 9th edition Mc. Grow Hill companies.

 Draferl (1997) management 4th edition Orland Florida ore press.

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Interview question for manager

This is the questionnaires to study the impact of inappropriate leadership on the

performance of employees in Dashen bank main branch .Here the response the
manager give for the question play a great role for successfulness of this study.
The response will be taking confidential and has no impact on manager.

General direction: put (x) mark on the given box in front of each question.

Personal data

1. Sex: male Female

2. Age: 18-30 31-45 above 45

3. Education status: 12 complete Certificate Diploma

Degree Master

4. Serving year: Below 1 1-5 year Above 5

5. Do you order group members to follow standards,2 rules 2and

regulations?

Yes No

6. If the answer for question number 5 is yes do they perform the

assigned work as you order?

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Yes No

7. If the answer for question number 6 is no why?

__________________________________________________________
__________________________________________________________
_______________

8. Do you schedule the work to be done? Yes No

9. Has the leadership brought impact on the profitability of the

organization? Yes No

10.If your answer for question number 9 is yes what its impact?
__________________________________________________________
__________________________________________________________
______________

11.Do you believe that your leadership style how impact on employees
performance? Yes No

12.If the answer for question number 11 is no, has do you know?
__________________________________________________________
__________________________________________________________
__________________

13.If your answer for question number 11 is yes, how do you know?
Specify
it________________________________________________________
__________________________________________________________
_______________________

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Is there employee turnover in your organization with related to management?
Yes no

Appendix

Jimma University

College Of Business and Economics

Department Of Management

Questionnaires for the Employees

These questionnaires will study the impact of leadership on the performance of

employees in Dashen Bank .Here the response you give for the question play
great role the successfulness of their study. The response will be taken
confidential and has no negative impact of you.

General direction: put (x) on the given box in front of each question. Note that the
information you provide should be kept confidentiality.

1. Sex: male female

27
 2. Age:12-30 31-45 as and above

3. Education status

12 complete certificate diploma degree master

4. Serving years : below 1 years 1-5 years 5-10 years

5. Does your manager force you to accept his there idea?

Yes No

6. Does your manager give you a chance to discuss with his\her?

Yes No

7. Is there any employee’s turnover with related to in appropriate leadership

in your organization?

Yes No

8. If your answer for question No 7 is No why?

___________________________________________

_____________________________________________

9. Does your organization grant incentives for encouraging your Job

performance?

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 Yes No

10.Is there enough break time for workers Yes No

11. Has the relationship between employees and managers brought any
negative impact on the profitability of the organization? Yes
No

12. If your answer for question No 11 yes how?

_________________________________________________________

________________________________________________________________

13.Has leadership style created negative impact on your job performance?

Yes NO

14. What do you suggest as a solution to solve the problem of in appropriate

leadership on your job performance?

_____________________________________________________________

__________________________________________________________________

15. What kind of leadership style does your organization follows?

Autocratic b) democratic c) Bureaucratic

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16. How work is done in the organization?

By giving encouragement b) by punishment c) other specify

17. Based on question no 16 if you answer is B what is the reason?

___________________________________________________________________
__

___________________________________________________________________

18. Based on question on no 16 no if your answer is A what is the effect on

employees?

___________________________________________________________________
__

___________________________________________________________________
________

19. What is the good of the organization does it focus on employees and work or
works?

A) Employee and work B) works

_________________________________________________________

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_____________________________________________________________

20. If you answer is A what the reason is?

___________________________________________________________________
_

21. If your answer is B in question number 19 what is the reason?

22. In the organization are all people participating equally in decision making?

A. yes B. No

23. Based on question number 22, if your answer is NO what is the reason?

______________________________________________________

___________________________________________________

24. Based on the question No22 if your answer no what is the reason?

___________________________________________________________________

___________________________________________________________________

25. How are the decision made in the organization?

a) Top –down

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 b) Bottom-up

If your answer is “A” what is the effect?

_______________________________________________________________

____________________________________________________________

If your answer is “b” what is the reason?

___________________________________________________________________
_______

___________________________________________________________________
______

Declaration

I under signed declare that this research paper were my original work and not
been presented for a degree in any university, and all the material used for this
study have been duly acknowledged

Student name...............

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Signature...................

Date...............................

This research paper has been submitted for examination with my approval as a
university advisor.

Name of advisor......................

Signature....................................

Date.............................................

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