IMPACT OF LEADERSHIP STYLES ON EMPLOYEE’S JOB SATISFACTION IN FINANCIAL INSTITUTIONS OF NEPAL

Abstract

The study attempts to analyze the relationship between transformational leadership and transactional leadership styles variables and employee’s job satisfaction in financial institutions of Nepal. Transformational leadership is based on three components: Idealized influence, Intellectual stimulation and Individual consideration and Transactional leadership based on two components: Contingent Reward and Management by Exception. For the study, 200 questionnaires delivered to the respondents, but only 102 respondents successfully completed the questionnaire. The questionnaire distributed by online to the respondents in five financial institutions in Kathmandu valley. Descriptive and quantitative research design and non-probability sampling method has been used for the study. Questionnaires distributed randomly to ensure fair representation of the population. Specifically, convenience sampling has been used. The data has been analyzed by the SPSS. To fulfill objective of the study, the research has been developed hypotheses testing by multiple regression analysis, and correlation for data analysis. Findings indicate that both leadership styles are adopted and there positive relationship between both leadership styles and job satisfaction. Both leadership styles also have significant impact on the employee’s job satisfaction in financial institution of Nepal. But the impact of transformational leadership style was more significant than transactional leadership style. This study concludes that transformational and transaction leadership enhanced employee’s job satisfaction and organizations should focus on these leadership behaviors to improve overall employee satisfaction and performance. Implication is that investigate other factors influence job satisfaction and the long-term impact of different leadership styles and conduct comparative research between financial institution and other institution with larger sample from more institutions across Nepal. This also help to improve employee’s morale, reduce turnover, and increase performance in financial institution.