Investigation on how leadership styles impacts on staff turnover

At NDB bank Sri Lanka

Kuruparan Thenukanan

Assignment
The Real World Management
Executive Summary

This assignment critically evaluates and analyses the leadership of a 21st century business
organisation and leader. The organisation chosen for this assignment is National development
Bank PLC. I will be using management tools and further research to analyse both the positives
and negatives of the leadership styles of the chosen organisation and leader. Further, I will be
discussing about the overview of the leadership and leadership traits in this assignment. I will
describe the business and the leader on which the assignment is based on. I will provide
background on both the leader and the business. I will also be stating what I would do differently
if I was in the position of the leader. I will also be writing a conclusion of the research. Tables
have been placed in the appendix to add further support to my findings.
1.0 Introduction

The prime objective of this assignment to present a clear understanding to the leader regarding
leadership, and briefly analyse its impact on organisational business. The concept of leadership
is vital for a country or an organisation in today’s world. It can be known as the activity of
leading a group of people or an organisation or the ability to do this (Brene and Brown, 2015,
p26). Accordingly, Smith (2015) suggests that leadership is the ability to adapt to the setting, so
everyone feels empowered to contribute creatively to solving the problems. It contains
establishing a clear view, sharing that vision with others so that they will follow cheerfully,
providing required information to realise that particular vision and coordinating the conflicting
interests of all members and stakeholders.

The banking industry is one of the valued industry which created more job opportunities in Sri
Lanka. Leadership is a main thing that gives direction to hold the particular behavior; this
research will refer to impact of leadership in NDB bank plc. This research will add to the body of
literature relating leadership factors and impact of leadership in NDB bank. The theoretical
frame work will describe the leadership indicators or attributes for measurement in the
organisation . Firstly, this report will add brief definitions of leadership following up with the
importance of it then we will be discussing the leadership traits with explanations. Also, this
section also analyses the leadership styles in detail then its advantages and disadvantages will be
deliberated. Finally, the author’s views and analysis on the topic as well as any significant points
discovered will be highlighted thus concluding the assignment.
2.0 Introduction to literature review

Dawidowicz (2010) explains that, academic literature review incorporates a right suitable peer
evaluation on professional work done by others in similar articles. Further, davidowicz (2010)
says that literature review as a well-organized examination or study of knowledge on some a
selected topic. In addition, boote (2005) explains that, literature review should include a
theoretical support for the study which helps to understand and evaluate the nature of the
research by the researcher. The literature review is the explanation of the idea and knowledge of
the created topic to the reader boote (2005), which would give the reader a clear picture and
understanding about the topic’s weaknesses and strengths.. The term is also used to define the
written component of a research plan or report that discusses the reviewed documents (gay and
mills, 2006) Taylor (2007) investigates that literature review as a categorization and ranking of
renowned intellectuals on knowledgeable individuals regarding the topic discussed and main
purpose of writing a review of the literature is to show a specific reader that the researcher have
read, and understood the topic with a great handle on, the main published work concerning a
specific subject or question in particular field.

2.1 Overview of Leadership

Researches usually define leadership according to their context and the aspects of the
phenomenon of most interest to them. After a far-reaching review of the leadership literature,
Cogdill (1974) concluded that there are almost as many definitions of leadership as there are
persons who have attempted to define the concept. Hemphill & coons (1957) suggest that
Leadership is “the behaviour of an individual directing the activities of a group toward a shared
goal.” Katz & Khan (1978) defines that leadership is “the influence increment over and above
mechanical compliance with the routine directives of the organisation.” Further “Leadership is
about articulating visions, embodying values, and creating the environment within which things
can be accomplished (Richards & Engle, 1986, p156).”
In the other hand, Drath & Palus (1994) defines that Leadership is “the process of making sense
of what people are doing together so that people will understand and be committed.” Burns
(1978) depicts that Leadership is “exercised when persons mobilise, institutional, political,
psychological, and other resources to arouse, engage, and satisfy the motives of followers.”
Smircich & Morgan (1982) state that “the leadership is the process whereby one or more
individuals succeed in attempting to frame and define the reality of others.” The various
definitions of leadership give the same meaning in common. They differ many respects,
including who exerts influence, the intended purpose of that, how it applies, and the outcome of
the significance attempt.

2.2 Discussion of leadership Traits

In the 1990s, researches began to investigate the leadership traits associated with social
intelligence, characterised as those abilities to understand one’s own and others’ feelings,
behaviours, and thoughts and to act appropriately (Marlowe, 1986, p32). Zaccaro (2002) defined
social brilliance as having such capacities as social awareness. Social acumen, self-monitoring,
and the capability to select and enact the best feedback given the contingencies of the situation
and social environment. Some empirical studies showed their capacities to be a key trait for
effective leaders. Table 1 provides a summary of the characteristics that were identified by
researchers from the trait approach. It illustrates clearly the breadth of features related to
leadership.

Table1: Explanation of leadership traits

Leadership Traits Explanation

Intelligence Having strong verbal ability, perceptual ability, and reasoning develops
to make one a better leader.

Self-confidence Self-confidence is another trait that helps one to be a leader.

Self-confidence is the capacity to be positive about one’s
proficiency and skills.
Determination The Determination is the desire to get the job done and includes
characteristics such as initiative, persistence, dominance, and drive.
Integrity Integrity is the character of honesty and trustworthiness.
 Leaders with integrity motivate confidence in others because
they can be trusted to do what they say they are going to do.
Sociability Sociability is a leader’s inclination to seek a pleasant social
relationship.
(Source: Author developed, 2019 based on French and Raven, 1962)

2.3 An overview of Leadership styles

According to research by Asaecenter (2005), leadership style is the way a person handles power
to lead other people. Research has named a variety of leadership styles based on the number of
followers. The most applicable leadership style gamble on the function of the leader, the
followers and the situation. Leadership styles classified into three segments.

2.3.1 Democratic Leadership

In this leadership style, subordinates are tangled in making decisions. The democratic leader
holds final responsibility, but he or she is known to delegate authority to other people. Who
determine work projects. The unique feature of this leadership is that communication is active
upward and downward. Concerning statistics, democratic leadership is one of the most preferred
one in an organisation, and it entails the following: fairness, competence, creativity, courage,
intelligence and honesty[ CITATION lea15 \l 1033 ]. Also, it helps to develop people’s skills. Team
members feel in control of their destiny, so they’re motivated to work hard by more than just a
financial benefit. Because participation takes time, this approach can take longer, but often the
result is better. The access can be most suitable when working as a team is essential, and when
quality is more important than speed to market, or productivity (Hero, 2019). For an example of
democratic leadership is George Washington. At the time of the American Revolution,
Washington used a democratic leadership style when guiding the US government. He showed
early signs of his democratic leadership style by appointing strong leaders to his organisation
(Career 2 next orbit, 2017).
2.3.2 Autocratic Leadership

Autocratic leaders typically make choices based on their ideas and judgments and rarely accept
advice from followers (Harris, 1998). It is an ultimate form of transactional leadership, where a
leader exerts high levels of power over his or her employees or team members. People within the
team have few opportunities for making suggestions, even if these would be in the groups or
organisation interest. Because of this, autocratic leadership usually leads to high levels of
absenteeism and staff turnover (Robbins, 1994). Example of this leadership style is Howell
Raines. Raines served as an executive editor “New York Times”, at that time he was famous as a
“hard-charging” leader. Raines was the best example of how to make this style of leadership in a
successful way (Joseph Chris, 2015).

2.3.3 Free-rein Leadership

The free-rein leadership style is also known as the “hands-off” style. It is one in which the
manager provides little or no direction and gives employees as much freedom as possible (Gray,
1996). All authority or power is with employees, and they must determine goals, make
decisions, and resolve problems on their own. It can be useful if the leader monitors and
communicates accurately with his or her team regularly. Most often, free-rein leadership works
for groups in which the individuals are very experienced and skilled self-starters. Unfortunately,
it can also refer to situations where managers are not exerting sufficient control (Luthans, 2002).
Example for the Free-rein leadership is Warren Buffet. He allowed making mistakes to happen
for his people to learn from them. As a result, He is a well-known example of the Free-rein
leadership style (Future of work, 2015).
Table:2 Evaluation of leadership styles

Leadership styles Advantages Disadvantages

Democratic Leadership The Democratic There is not enough time in
leader develops plans democratic leadership to get
to help employees everyone’s input which leads
evaluate their to demotivation among
performance. employees.
In democratic The manager feels afraid by
leadership leader this type of leadership
allows employees to because of the less control
establish their goals. among employees.
The Leader Employee safety is a critical
encourages employees concern here because of the
to grow on the job. less interest of the manager.
Leader commonly Lots of discussions for
recognises and decision making will result in
encourages the boring among employees.
achievement of the
employees.

Autocratic Leadership The Leader has good control No fresh ideas for the
and overview of his organisation since the
employees in autocratic decision-making power
leadership. restricted only for the leader.
The Leader is the crucial The independence of the
decision maker here in this group is very low by the
leadership style which leads authority of the leader.
more time saving for the Employees’ turn over is high
management. in this leadership style
Due to more rules and because of the high authority
regulations of the leader of the leader.
employees have more
security.
In this leadership style,
discipline among branch
staffs is pretty good because
of the more control of the
leader.
2. Employees are highly skilled, The employees attempt to
 experienced and educated in
exceed the limit because of
this leadership style. the less control of the leader.
Employees have pride in their
Numbers of weak staffs are
work and the drive to do it
high because of the less
successfully on their own.control and less training.
Tolerance between the group
members is high.
(Source: Author developed, 2019 based on Phrenimos India, 2018)

2.4 Leadership Theories

2.4.1 Great man Theories

Great man theories assume that the capacity for leadership is inherent – that great leaders are
born not made. These theories often portray great leaders as heroic, mythic and destined to rise to
leadership when needed. The term "Great Man" was used because, at the time, leadership was
thought of primarily as a male quality, especially in terms of military leadership.

2.4.2 Trait Theories

Trait theories assume that people inherit certain qualities and traits that make them better suited
to leadership. Trait theories often identify particular personality or behavioral characteristics
shared by leaders. If leaders had particular traits of characteristic, such as intelligence or energy,
that distinguished them from non-leaders and contributed to success.

2.4.3 Situational Theories

Situational theories propose that leaders choose the best course of action based upon situational
variables. Different styles of leadership may be more appropriate for certain types of decision
making.

2.4.4 Participative Theories

Participative leadership theories suggest that the ideal leadership style is one that takes the input
of others into account. These leaders encourage participation and contributions from group
members and help group members feel more relevant and committed to the decision-making
process. In participative theories, however, the leader retains the right to allow the input of
others.

3.0 Introduction to methodology

Research is a cautious and logical investigation into each subject, subject matter of area, which is
an undertaking to find important data which would be valuable for further application. This
research is conducted to identify how leadership styles impacts on staff turn over at NDB Bank
Plc. Research is well-defined as the act of gathering data and information and gaining knowledge
comprise through tradition, authority, coherent thinking, involvement, perception, borrowing and
exploring, consider of materials and sources in order to set up facts and reach new conclusion
(Naidoo, 2011). Research methodology refers to the different sequential steps taken by a
researcher in studying the main problem with certain purpose. It is an explanation of the method
of systematic and more significant investigation taken into an identified subject of study with an
explanation of the elements in the concept of Research Onion (Saunders, Lewis, & Thomhil,
2007). The researcher will illustrate the steps adopted to do this research. A research
methodology is the description, explanation and justification of various methods of conducting
research (Sharavanavel, 2006).

3.1 Research method

Quantitative research includes a number of statistical standards for the validity of the approach,
and such as the number of respondents that are required to establish a statistically significant
result (Goddard & Melville, 2004). Quantitative methods mainly focus on the numbers and its
frequencies. It does not highlight on the experience and meanings but quantify the data collected.
As well as quantitative approach the data will be subject to precise and strict analysis (Kothari,
2008). While qualitative method is used to investigate issues related to the research through
interviewees by obtaining their views, attitudes and perceptions (Creswell, 2003). Bryman and
Bell (2011) stated qualitative method centers on inductive style with a significance on creation of
theories. The author adopts the quantitative research method since the data collected can be
measured accurately with less variation
3.2 Data Collection Method
There are two types of data as primary and secondary. Primary data is internally collected data
while secondary data are study from previous researches and journals. Bryman and Bell (2011)
highlights that questionnaires is to be easily conducted and cost efficient and also since this
methodology will be highly effective and all required information will be gathered in this way
including those hidden opinions and requests. Secondary Data is gathered from available
data/researches already conducted by other institutions on similar issues. All primary data is
collected from existing employees of NDB Bank by issuing close ended questionnaires to
employees.

3.3 Population and Sampling

A sample is a lesser representation of a large volume from where it is taken. It is a segment of
the population selected in such a way that they are the representative of the research Kothari,
(2008) The study was conducted in NDB bank plc- Negombo branch in north western region
Gampaha district .the population of the study comprised of respondents from branch staffs the
sample was the total population. The population of this research will be 40 employees and the
target population or the x`sample was the whole population 100%responded Convenience
sampling everyone participated because they are often readily and easily available. It is a low
costly method less time-consuming and most convenient
4.0 Finding and Analysis

4.1 Introduction

Findings and analysis is a point at which researchers convey and convince the readers
of the significance and validity of findings (Bryman and Bell, 2011).This primarily centers
by examining the response of the survey where 40 responded to the survey which has
a response rate of 100% and how it was carried out concurring to the strategies
identified. This chapter shows the analysis of primary data gathered through 20
questions included in the questionnaire and followed by literature - backed discussion of
research findings. The main goal here is to determine how leadership styles impacts at
NDB bank PLC.

RESPONDED RATE
Responded Not Responded

100%
4.2 Presentation of the analysis

This research questionnaire data were examined in detail individually by focusing on the
fundamental research question, an examination on how leadership impacts on staff turnover,
each question was analyzed individually and calculated, and the related literature provided
explanations. Pie charts and tables were used to provide a broad understanding of the results
demonstrated. The following analysis represents the answers gathered from the sample of 32
staffs working at NDB Bank.

4.3 Analysis based on Literature review

4.3.1 Demographic
Question 1

Question Marital status

MATERIAL STATUS
Married Un Married

25%

75%
 Unmarried workforce is 75% while married population is 25% out of total respondent which
shows most of the employees are unmarried

Question 2

Question Age group

 
Less than 20 years 21-37 Years
38 - 54 Years 55-70 Years

28%

73%

According to question 2, the it indicates that the majority of the respondents hare in between age
21-37 which is 72% and the respondents between less than 20 years old is 0% so according to the
response majority are young age staffs are working at NDB bank.

Question 3

Question What is your qualification

 QUALIFICATION
A/L /Certifiacte Level Diploma Level
Digree Post Graduate

13%
18%

25%

45%

Diploma level shows 45% it indicates that majority are diploma level staffs and 25% staffs are
degree holders 17% are with the qualification of A/L and 13% of postgraduate level staffs are
working in this bank.

Question 4

Question What is your tenure at bank?

Less than 1year 1-2 Years 3-6 Years

7-10 Years More than 10Years

7%
7%
23%

10%

53%
This indicates that most of them are 1- 6 Years category 63% 1-2 Years shows 10% 3-6 Years
are majority it shows 53% There is 7% of the total who has worked for more than 10 years. This
clearly shows most of the employees are newly recruited.

Question 5

Question Previous Job Changes

JOB CHANGES
More than 5 4-5 Changes 2-3 Changes 1 Change Non

5%
8%

38%

40%

10%

There are 38%staffs who have never changed jobs while 40% with 2-3 job change, 7% for 4-5
changes and 5% has changed jobs more than 5 times. This indicates that the majority are new
employees who have started their careers.

Please refer the Annexure 2 to elaborate the questionnaires related to leadership

5.0 Conclusion and Recommendations

To conclude this study, it is clear that the primary research collected has proven the hypothesis to
be correct. The data shows employees from NDB bank agree leadership in the organization in
their line of work is important to reduce turnover But also different employees are motivated by
different factors. Some of the main leadership factors found in this research include financial
gain, promotions, receiving responsibilities and recognition for different projects. If offered to
employees will help raise their motivation level and will be seen in their work. From this
research other factors for example giving employees a helping and also giving employees
feedback on their work is found as a motivator for keeping employees morale high. It also helps
employees to stay engaged in work good leadership styles makes employees feel valued by their
organization. Additionally, questionnaire has also undertaken as a primary study to analyze the
impact of leadership style on staff turnover at NDB bank PLC. Finally, author has identified
some recommendations to improve the leadership style methods to management to increase
employee retention and Company’s Profit.

6.0 Recommendations

The question raised by this survey is retaining staff and leadership style towards staff turnover
The study should be continual by anyone who is willing to further develop may consider the
limitations of the current study and improve it. To further develop the research, both quantitative
and qualitative research methods can be used for more results and could conduct a longitudinal
study where the research can be further carried out again to test whether the problem is resolved.
Size and population can be also extended; author could have reached an enhanced result if the
sample size was increased up to at least 100 employees.
Recommendation Impact of leadership towards staff turnover

Superior should Recognize the The Bank should recognize the talent and
hard working of employees and hard work of the employees. This will make
providing them job promotions them pleased and more
without any delay productive.Armstrong (2009) concluded
that the intrinsic motivation is more
influential in the long run and deeper in
meaning as it is included in the individual
and not coming from the external, whereas
the extrinsic motivation might have powerful
and visible effects fast but these are not
long lasting.

The organization should understand

promoting employee will increase their
morale and commitment towards the work
and organizational success

Improving work-life balance
The author found out that work life balance
is very important to make satffs engaged
and feel positive proper work life balance
reduces staff turnover of employees. The
organization and leader must provide time
for the employees to spend with their
families and friends. This can be done by
implementing a roster system twice or more
in a week allocating for each employee
 where they can leave early on their roster
day so that they can spend time with their
loved ones. The focus on the field of work
and family is essential as family and work
are regarded as the most important
elements of everyone’s life, and any
challenging demands from work and family
life cause conflict and negatively affect the
wellbeing of employees (Clark, 2000).
Therefore, good work – life balance can be
achieved when there is no role conflict, and
when employees are satisfied with their
work and family roles (Clark, 2000).

Making managers and supervisors Management offering support to employees

available and supportive in work and giving them feedback on their work will
place and outside of work make employees feel valued by the
organization. Employees will feel they are
learning new skills in different areas and
can help with different project. This will
keep employees morale high and also will
keep employees engaged to provide a high
standard of work.
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