The Impact of Leadership Styles on Employee Performance and Job Satisfaction in Private Banks: A Study on Transformational and Transactional Leadership

Abstract

Abstract The research delved into the impact of leadership styles on employee performance and job satisfaction within Private Banks, focusing on the examination of transformational and transactional leadership. Noteworthy findings emerged, revealing that transformational leadership, characterized by inspiration, motivation, and support, significantly correlated with heightened employee performance and increased job satisfaction among Private Banks employees. Conversely, transactional leadership, emphasizing clear job expectations and compliance, displayed more selective influence on specific performance aspects but exhibited limited impact on intrinsic job satisfaction. These findings bear significant implications for Private Banks operational strategies, suggesting that a combination of transformational leadership practices alongside selective integration of transactional elements could optimize employee performance and job satisfaction. The study contributes empirically sound evidence to leadership studies, enriching the discourse on leadership behaviors' influence on organizational dynamics. Practical recommendations derived from these findings could guide Private Banks in fostering a conducive work environment, aligning with organizational goals and enhancing employee well-being. Further research opportunities lie in longitudinal or comparative studies across Islamic banking institutions to deepen the understanding of leadership impacts on employee dynamics. Ultimately, this research underscores the pivotal role of leadership styles in shaping employee performance and job satisfaction at Private Banks, offering actionable insights for organizational enhancement.