The Role of Effective Leadership on the Employees of Small and Medium Enterprises in Ghana

Abstract

Purpose: Leadership style is one of the most crucial human resource-related outcomes and one of the most studied topics in management. The study assessed the role of effective leadership on employee performance on the small and medium scale enterprises (SMEs) in the Cape Coast Metropolis in Ghana.

Study design/methodology/approach: A descriptive research design was adopted for the study. The population of the study constituted 480 SME’s but 205 participants responded to the questionnaire. Microsoft Excel was used to analyze and present the data in tables and chart for easy interpretation.

Findings: The findings indicated that, transformational, transactional, democratic, laissez-faire and autocratic are some of the leadership styles exhibited by the SME operators in the Metropolis. It was revealed that, the factors influencing employee performance were planning and controlling ability, role model and self-confidence, standards of performance for group members, rewarding achievement and influence by subordinates. Finally, it was disclosed that, leadership styles exhibited by the SME operators positively influences employees’ performance.

Originality/value: This study is useful to the SMEs operators and the National Board for Small Scale Industries (NBSSI) in Ghana to create policies on the leadership styles that will increase employee engagement and performance which will improve the economy growth in the country.