The relationship between authentic leadership and employee performance

Abstract

The impact of a leader on his or her followers has been a topic of much research and therefore organizations, including the financial services sector in South Africa, are placing more and more emphasis on what this leadership construct looks like. Research suggests that Authentic Leadership might be a new kind of leadership approach that the world is looking for. This study aims to establish the possible relationship between an authentic leader and the impact the leader's behaviour has on the performance of his or her employee. The study further attempts to establish if satisfaction can play a mediating role in the relationship between authentic leadership and the performance of an employee. The research used two established research instruments, namely the Authentic Leadership Questionnaire (ALQ), as well as a section of Freese and Schalk's (2008) psychological contract questionnaire relating to satisfaction specifically. Respondents were also requested to indicate their most recent performance rating. The study was conducted within the financial sector based in the Eastern and Southern Cape with a total population of 1077 employees across all business units, job grades, race, age, education and gender. The study established a significant positive relationship between authentic leadership and employee performance. A further significant positive relationship was established between authentic leadership and satisfaction. However, no relationship could be established between satisfaction and performance, thereby indicating that satisfaction was not a mediator of the relationship between authentic leadership and employee performance. In conclusion, recommendations for management practice and for further research are made.