Effects of Leadership Style on Employee Performance Through Employee Retention

Muhamad Riza (), Dita Ainina () and Anisa Yuniba ()
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Muhamad Riza: University of Brawijaya, Faculty of Administrative Sciences
Dita Ainina: University of Brawijaya, Faculty of Administrative Sciences
Anisa Yuniba: University of Brawijaya, Faculty of Administrative Sciences

A chapter in Proceedings of the 2023 Brawijaya International Conference (BIC 2023), 2024, pp 583-590 from Springer

Abstract: Abstract This study aims to analyze the effect of leadership style on employee retention and employee performance in an organizational context. The independent variable in this study is leadership style consisting of Democratic Leadership (X1), Autocratic Leadership (X2), Laissez-faire Leadership (X3), and Transformational Leadership (X4). The dependent variables include Employee Resistance (Y1) and Employee Performance (Y2). Quantitative methods were used in this study, using the Partial Least Squares Structural Equation Modeling (PLS-SEM) version 4 analysis tool. Data were collected through a survey of employees from various levels in the organization. Seven hypotheses were proposed and tested through data analysis using the PLS-SEM technique. Experiments were carried out twice to ensure the reliability and validity of the results. The results of this study reveal the significant impact of leadership style on employee resistance and employee performance. More specifically, the transformational leadership style has a strong positive effect on employee performance, while the democratic leadership style is associated with lower levels of employee resistance. On the other hand, autocratic and laissez-faire leadership styles tend to be associated with higher employee resistance. These findings provide important implications for management practice in understanding how leadership style influences employee retention and performance. By recognizing the positive impact of the transformational leadership style, organizations can focus more on developing leaders who are able to motivate and inspire employees. Besides that, This research underscores the importance of a democratic approach to leadership to reduce employee resistance. The overall results of this study provide valuable guidance for human resource management in improving leadership effectiveness and organizational performance.

Keywords: Leadership Style; Employee Performance; Employee Retention; HR Management (search for similar items in EconPapers)
Date: 2024
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DOI: 10.2991/978-94-6463-525-6_65

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