Leadership Styles have an Impact on Performance!?

 

Today, let's talk Leadership and Leadership Styles.

Why leadership Styles?  

Because it is important for us to understand the impact each style has on organizational climate and team performance. When we understand our own leadership styles, we can have a better idea of our strengths and weaknesses, which can help us with our careers and increase the success of those we are leading.

Leadership is a social influence process in which the leader seeks voluntary participation of subordinates in an effort to reach organizational goals. A leader can be defined as a person who delegates or influences others to act, so as to carry out specified objectives (Nanjundeswaraswamy and Swamy, 2014). 

 

According to Daniel Goleman (2004), in his research at nearly 200 large global companies, he found that while the qualities traditionally associated with leadership, such as intelligence, toughness, determination and vision, are required for success, they are insufficient. Truly effective leaders are also distinguished by a high degree of emotional intelligence, which includes self-awareness, self-regulation, motivation, empathy and social skills. 

Goleman (2004) argues that for star performers, nearly 90% of the difference in their profiles was attributable to emotional intelligence rather than cognitive abilities. The underlying premise of research on emotional intelligence is that people who are sensitive to their own emotions and the impact their emotions have on others will be more effective leaders (Northouse, 2018). 

Emotional Intelligence is concerned with a person’s ability to understand his or her own and other’s emotions, and then to apply this understanding to life’s tasks (Northouse, 2018). According to Maamari and Majdalani (2017), when emotional intelligence is high, it improves the physical and psychological health of people, leading to better performance. Moreover, emotional intelligence correlates negatively with work and organizational stress, hence, many scholars argue that emotional intelligence is a key component of effective leadership as it represents a critically important competency for effective leadership and team performance in organizations today.

Today’s corporate world is full of challenges and competition, and most organizations are facing a lot of hurdles and threats. These organizations are finding it difficult to maintain their competitive edge and sustain their well-being (Maamari and Majdalani, 2017). Maamari and Majdalani (2017) argue that companies are striving to recruit and retain good quality leaders capable of creating a positive organizational climate. 

Organizational Climate  refers to six key factors that influence an organization’s working environment--its flexibility, employees sense of responsibility to the organization, the level of standards that people set, aptness of rewards, the clarity that people have about missions and values, and finally, the level of commitment to a common purpose (Goleman, 2000). These leaders are expected to have emotional intelligence traits that allow them to better handle themselves and their team members. 

A research by a consulting firm Hay/McBer, which draws on a random sample of 3871 executives, found SIX distinct leadership styles, each springing from different components of emotional intelligence which have a direct and unique impact on the working atmosphere of a company or team, and in turn, on its financial performance (Goleman, 2000). Most importantly, the research indicated that leaders with the best results do not rely only on one leadership style, but they use most of them, in different measure, depending on the situation. Goleman (2000) identifies the six distinct leadership styles as Coercive, Authoritative, Affiliative, Democratic, Pacesetting and Coaching style.

First, the Coercive Style, or the “Do as I say” approach can be effective in a turnaround situation or when working with problematic employees. However, the coercive style is one of the least effective in most situations. The leaders’ top-down decision-making kills new ideas and flexibility is the hardest hit. The style also has a damaging effect on the rewards system and dampens employees’ motivation. 

    Second, the Authoritative Style or the “come with me” approach is one of the most effective style, driving up every aspect of climate. The authoritative leader is a visionary; the leader motivates people by making clear to them how their work fits into the larger vision for the organization, which improves clarity. Authoritative leadership also maximizes commitment to the organization’s goals and missions. The leader also allows for greater flexibility, giving people the freedom to innovate, experiment and take calculated risks. However, the approach fails when a leader is working with a team of experts or people who are more experienced, and they might see the leader as arrogant or pompous. Another limitation is if a leader, who is trying to be authoritative becomes overbearing, it can undermine the egalitarian spirit of an effective team. 

    Third, the Affiliative Style or the “people come first” approach is particularly useful for building trust and harmony among employees and to boost morale. The style drives up flexibility and the affiliative leader offers ample positive feedback which gives employees a sense of recognition and reward. However, the style should not be used alone, as it can allow poor performance to go uncorrected and employees may perceive that mediocrity is tolerated. 

    Fourth, the Democratic Style or the “what do you think?” approach drives up flexibility and responsibility, by letting workers have a say in decisions that affect their goals and how they do their work. This approach is ideal when a leader is uncertain about the best direction to take and needs ideas and guidance from able employees. However, the style’s impact on organizational climate is not as high as one might imagine. One of its most tedious consequences can be endless meetings where ideas are mulled over, consensus remains elusive and the only visible result is scheduling more meetings. 

    Fifth, the Pacesetting Style or the “do as I do, now” approach is beneficial to get quick results from a highly motivated and competent team. The leader sets very high-performance standards and exemplifies them himself and expects employees to do the same. However, the pacesetting style destroys climate. Many employees feel overwhelmed by the pacesetter’s demands for excellence and morale decreases. Flexibility and responsibility evaporate, and commitment diminishes because people have no sense of how their personal efforts fit into the big picture. 

    Finally, the Coaching Style or the “try this” approach focuses more on personal development than on immediate work-related tasks. These leaders are willing to put up with short-term failure if it furthers long-term learning and it works well when employees are already aware of their weaknesses and want to improve. Flexibility and commitment are enhanced with this style. However, the style has little impact when employees are resistant to learning or changing their ways, and it fails when leaders lack the expertise to help the employees along.

In conclusion, an emotionally intelligent leader can control better through self-management, understand their employees more due to empathy and improve other people’s moods by using their social skills, which creates a good organizational climate, which in turn improves the organization’s performance, decreases problems with staff and lowers the cost of turnovers.