| Abstract: | This study aims to investigate the effect of leadership styles on employee performance within the
Addisitua Ethiopia Saving and Credit Co-operative Society with Liability. An explanatory research
design was employed to determine the effects of the independent variables on the dependent variable.
The study utilized a quantitative research approach to test the effects using hypotheses and research
questions. Both primary and secondary data sources were utilized, with primary data collected from
employees in the financial sector through self-administered close-ended questionnaires. The sampling
technique involved a census survey with a total population size of 114 respondents, including managers
and employees of the institution. Descriptive and inferential data analysis methods were applied, with
descriptive analysis involving calculations of frequency, percentage, mean, and standard deviations,
while inferential statistics, specifically correlation and multiple linear regression analysis, was used
to evaluate relationships between variables. The regression model result shows that leadership
explains a substantial portion of the variance in employee performance, with an R2 value of 0.703,
indicating that about 70.3% of the variability in employee performance can be attributed to the
leadership styles in the model. The ANOVA results confirm the overall significance of the regression
model, with an F-statistic of 86.926 and a p-value below 0.05. Regarding the Effect of leadership styles
on employee performance, Autocratic leadership has a negative coefficient of -0.364, suggesting a
36.4% decrease in employee performance with increased Autocratic leadership. This coefficient is
statistically significant (p < 0.001), indicating a detrimental effect on employee performance. In
contrast, Democratic leadership and Laissez-faire leadership have positive coefficients. Democratic
leadership has a coefficient of 0.276, implying a 27.6% increase in employee performance, while
Laissez-faire leadership has a coefficient of 0.316, signifying a 31.6% boost in employee performance.
Both coefficients are statistically significant (p < 0.001), highlighting the positive impacts of
Democratic and Laissez-faire leadership styles on employee performance. |
