The Digital Leadership Advantage: Leadership Styles and Employee Performance in the Nigerian Banking Sector

This study examines the influence of leadership styles on employee performance within the Nigerian banking sector, with evidence from Wema Bank Plc. Grounded in Transformational Leadership Theory, Path–Goal Theory, Leader–Member Exchange (LMX), and Situational Leadership Theory, the study investigates the predominant leadership styles adopted by line managers and their performance implications. A cross-sectional survey design was employed, with data collected from 379 employees using a structured questionnaire. The sample size was determined using the Taro Yamane formula, while a multi-stage sampling technique ensured representativeness. Data were analysed using descriptive statistics, Pearson correlation, multiple regression, ANOVA, and independent sample t-tests.

Findings reveal that transformational leadership is the dominant style (mean = 3.53) and has a strong positive relationship with employee performance (r = 0.77, p < 0.01). Transactional leadership plays a supportive role, while autocratic and laissez-faire styles negatively affect performance. The model explains 66% of the variance in employee performance (R² = 0.66). The study concludes that a hybrid leadership approach enhances performance in banking institutions. It contributes to leadership theory by providing empirical evidence from an emerging economy and offers practical implications for leadership development.