The relationship between the leadership style and productivity has gained increased attention. This topic fits into the field of psychology because, in the pursuit of increasing profit, organizations are pushing employees to exert greater efforts to increase productivity.
Research has shown that employees who try to perform without great leadership, direction, and support end with psychological issues such as stress, burnout, and depression.
Organizations need leaders who inspire subordinates’ potential to enhance efficiency while meeting the organization’s goals. If leaders cannot provide direction, implement plans and motivate employees to produce not they will continue to experience high absenteeism and high turnover rate.
There is truly a difference between a leader and an effective leader. Organizations desire to increase profit and productivity. In order to achieve this goal efficiently, there has to be effective leadership. Any managers or employees in a leadership position can say they are leaders but are they effective? The lack of effective leadership is causing confusion, conflicts, and dissatisfaction among staff members. This could even result in the employees not performing well at work anymore, further decreasing production.
Consider this example; Company X has two departments but each department head has a different leadership style. The company’s chief financial officer (CFO), leadership style is transformational. He seeks the voluntary participation of subordinates in an effort to reach organization goals. He takes pride in his staff, values and encourages their feedback. Employees are satisfied, motivated, and go beyond their duties. On the other hand, the vice president of Company X runs his department with an iron fist. He is effective at organizing, budgeting, and controlling the organization’s resources. However, this type of leadership does not motivate and inspire employees to produce. He is more of a manager who follows policies and procedures, and when they do not follow rules, he will punish his employees. He focuses on how his employees perform and promote through both rewards and punishments. In this department, absenteeism is high, and productivity is low.
Organizations benefit more when leadership is able to get employees to align their personal values and goals with that of the organization. When employees feel like they are a part of the organization’s mission, they are more positive and will willingly support and get other to support the company’s strategies, policies and procedures. Therefore, some leaders might be successful at communicating the appropriate employee behavior by reinforcing rewards and sanctions. Effective leaders unlock potential in others, motivating them to perform beyond their own interest. They have a direct influence on employee morale. They seek input from employees; they are involved and encourage employee’s involvement, which allows employees to feel a part of the company’s mission.