The Moderating Effect of Leadership Styles in the Relationship between Employee Commitment and Performance of Commercial Banks in Kenya

Abstract

The Moderating Effect of Leadership Styles in the Relationshipbetween Employee Commitment and Performance of Commercial Banks in Kenya 1. Background of the Study Performance of commercial banks in Kenya banks has come under increasing pressure mainly due to an increasing level of competition arising from deregulation of the industry (Kungu, Desta & Ngui, 2014). Industry competition is indeed a major challenge that has been argued to lead to glitches in many banking sectors across the global landscape (Boudriga & Ghardallou, 2012). Top level management of banks in Kenya have therefore been seen to continually come up with ingenious ways of addressing challenges emanating from such a growing competitive environment (Ongeri, Nyaoga, Bosire & Nyambega, 2014).Amidst other challenges, the banking sector is also grappling with the challenge of low employee commitment (Nyambura, 2015). This is of concern to the banks as there is evidence in the literature that employee commitment has numerous benefits to organisations including, but not limited to, increased shareholder returns (Walker Information Inc., 2000), increased sales (Barber et al., 1999) and decreased employee turnover (Tett & Meyer, 1993) among other benefits. Some studies, nonetheless, have also established that employee commitment does not have any relationship with organisation performance (Mathieu & Zajac, 1990;Mowday et. al, 1982) a fact that may well present a quandary in many organisations. The differences in the empirical findings on the influences of employee commitment on organisational performance may perhaps be attributed to the lack of consensus in what actually constitutes employee commitment (Dixit & Bhatti, 2012).The conceptualization of employee commitment by Meyer and Allen (1990) into affective commitment, continuance commitment and normative commitment in the three components model is one of the most notable abstractions of the concept of employee commitment (Dixit & Bhatti, 2012). In this conceptualization, affective commitment relates to a personal attachment that an employee has to an organization (Meyer & Allen, 1990). This type of commitment makes an employee exert wholly in the pursuit of an organization's goals. It drives an employee to put in extra effort and Meyer and Allen (1997) argue that it is the most important type of employee commitment, and thus is the type an organization would wish to instill in its employees.Continuance commitment on the other hand is the type of commitment that makes an employee stay with the organization because they need to (Khan, Zia-ur & Akram, 2012). It essentially arises from employment terms, such as the nature of job contracts (Mullins, 2001) and is generally expressed by an employee when one feels leaving the organization is quite costly and cumbersome (Mullins, 2001). Normative commitment on the other hand is related to a general feeling of will to stay in the organization (Khan, Zia-ur & Akram, 2012) and is a feeling of obligation to the organization, and is

Corporate Social Responsibility Expenditure on Environment and Financial Performance of Tea Development Agency Managed Factories in Kenya

“…Commercial banks in Kenya that have invested in environmental protection include but not limited to Equity Bank Limited, Absa Bank, Sidian Bank among others (Marwa, 2020). Despite this being the case, CSR-financial performance nexus with regard to KTDA factories in Kenya remain scant which this study sought to provide.…”