EFFECTIVE LEADERSHIP AND ORGANIZATIONAL COMMITMENT OF EMPLOYEES IN THE INSURANCE COMPANIES IN LAGOS STATE

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CHAPTER ONE

INTRODUCTION

1.1   Background to the Study

Leadership has drawn great attention from scholars in various fields in the recent years. Leadership, or more specifically effective leadership, is every bit as crucial (if not more so) in Nigerian organizations as it is throughout the world. Nigerian organizations are no different from others worldwide in terms of striving for employees’ performance in order to be globally competitive (Adeyemi, 2001).

 Organizational commitment can be contrasted with other work-related attitudes, such asjob satisfaction, defined as an employee’s feelings about their job, and organizational identification, defined as the degree to which an employee experiences a ˜sense of oneness’ with their organization.

Organizational scientists have also developed many nuanced definitions of organizational commitment, and numerous scales to measure them. Exemplary of this work is Meyer and Allen’s model of commitment, which was developed to integrate numerous definitions of commitment that had been proliferated in the literature. Meyer and Allen’s model has also been critiqued because the model is not consistent with empirical findings. There has also been debate surrounding what Meyers and Allen’s model was trying to achieve.

Leadership can be define as a social influence process. It involves determining the group or organization’s objectives, encouraging behavior in pursuit of these objectives, and influencing group maintenance and culture (Yukl, 1994). Leaders are perceived as persons who can single handedly create order out of chaos, navigate organizations through unthinkable environmental turbulence, bring mightiness out of mediocrity, and thrive where lesser mortals will quickly fade away.  Leaders have been found to influence followers in many ways, including coordinating, communicating, training, motivating, and rewarding (Yukl, 1989).

Although multiple definitions of organizational commitment have been proposed, they each share the view that commitment is a psychological state that characterizes an employee’s relationship with his or her organization and has implications for that employee continuing membership in the organization (Meyer & Allen, 1997). What has traditionally differed among these definitions of organizational commitment is the nature of the psychological state being described (e.g., Becker,1960; Mowday, Steers, & Porter, 1979; Wiener, 1982). In order to acknowledge these differences, Meyer and Allen (1991) developed a three-component model of organizational commitment. The first component is affective commitment, which refers to an employee’s ˜˜emotional attachment to, identification with, and involvement in an organization’’ (Meyer & Allen, 1991).The next component is continuance commitment, which refers to an employee’s perceptions of the costs associated with leaving an organization.

Leadership is one factor which is considered as influencing organizational commitment. Barling (1996) found that employee’s commitment to organization is directly depended on behaviors of their leaders. According to Massy there is a positive relationship between transformational leadership and employee’s motivation. Transformational leadership would affect employee’s commitment of followers through encouraging them to think about critical issues, to apply innovative procedures, to participate in decision-making process, to create loyalty, and to fulfill their different needs.

Those employees who have strong affective commitment will remain in organization because they desire their conditions. Employees with strong continuance commitment will remain in organization because they need organization; and those who have strong normative commitment will remain in organization because they feel ethical responsibility for doing works.

1.2    Statement of the Problem

A key challenge for leaders is the barriers that exist between employees because of organizational structures, physical separation, and cultural differences. Organizations perform better when they simultaneously manage multiple flows of performance among many people. The management of people at work is an integral part of the management process. To understand the critical importance of people in the organization is to recognize that the human element and the organization are synonymous.  Some of the setbacks in leadership influence on employee performance are stated below:

1. Poor Motivation: Some leaders do not appreciate the fact that employees have to be motivated to ensure they do what they have to do so that the goals and objectives of the organization are achieved. Because of the prevailing situation in Nigeria where supply of labour is greater than its demand, some employers do not believe much in effective motivation of workers to produce high performance. They uphold the view that even if workers are not properly motivated they cannot leave the job since there is no job in the labour market.
2. Insensitivity to employees’ plight: Most employers are not effective in their leadership behaviour. They treat workers as machines believing that workers could be treated anyhow.
3. Problem of time management: Some leaders do not also manage their time effectively with their workers to enhance effective job performance from the workers. In response to this, workers do not handle their work properly e.g there is high labour turn over absenteeism, lackluster attitude, low performance etc. There is no proper planning and they would not prioritize their task accordingly. They perform their task in a lackadaisical way, the effect of which is ineffectiveness, which if left unchecked can damage socio economic life of the nation.

Hence, leadership must address the relationship among the various constituencies and the way information flows among them. This is an important distinction because it changes leadership from something only top management does for the organization to something that management facilitates and enables but does not necessarily control.

1.3    Aim and Objectives of the Study

This major purpose of this study is to show how leadership is being framed to place the utmost focus on enhancing the lives of people with respect to employees.

However, the following are the aims and objectives of the study:

1. To find out the effects of leadership in the overall organization commitment.
2. To evaluate the transparent processes that exists between the leaders and their subordinates.

iii. To measure the performance assessment process.

1. To ascertain the extent to which employees can learn to trust the leaders of an organization that performs to expectations.
2. To show the impact of leadership in an organization.

1.4    Relevant Research Questions       

In assessing the purpose of the study, this research project attempts to answer the following questions:

1. Is there a relationship between leadership and organization commitment?
2. What are the transparent processes that exist between leaders and their subordinates?

• How can the performance assessment process be measured in an organization?

1. To what extent will employees learn to trust the leaders?
2. What are the impacts of leadership in an organization?

 1.5    Relevant Research Hypotheses

In carrying out this research work these theoretical statements are made to serve as a direction on which the work will be premised.

1. H_o: Leadership has no significant impact on organization commitment of employees.

H₁: Leadership has significant impact on organization commitment in an organization

1. H_o: Leadership has no significant relationship with organizational growth and survival.

H₁:          Leadership has significant relationship with organizational growth and survival.

1.6    Significance of the Study

The outcome of the study will aid leadership in formulating feasible policies that would be in the best interest of the organization.

At the corporate level, it is expected that the study would become an eye-opener and immensely add to the knowledge of leaders in assessment of employees’ performance. Performance does not only enhance the methodology or efficiency of the organization, but also project the organization in a good shape before the masses.

The result finding of this study will also help to identify the problems within the staff training policy of the state and help to curb such phobia that lighten tension for an effective performance between Leadership and employees.

1.7    Scope and Limitation of The Study

This research work aimed to examine effective leadership and organizational commitment of employees in the insurance companies in Lagos State with a view to explore Niger Insurance Plc, Lagos-Island, Lagos.

The study as perceived might face some logistic challenges in term of the time and the costs involved in carrying out the research, but nevertheless, it would endeavor to accomplish its aims and objectives.

• Definition of Terms

Organization: An organization is a social group which distributes    tasks for a collective goal.

Environment: Environment (systems), the surroundings of a physical system that may interact with the system by exchanging mass, energy, or other properties.

Employee: An employee contributes labor and expertise to an endeavor of an employer and is usually hired to perform specific duties which are packaged into a job. In most modern economies, the term employee refers to a specific defined relationship between an individual and a corporation, which differs from those of customer or client.

Employment: it is a contract between two parties, one being the employer and the other being the employee.

Leadership: It’s the process of social influence in which one person can enlist the aid and support of others in the accomplishment of a common task.

Influence: Influence is the action or process of producing effects on the actions, behavior, opinions, etc., of another or others.

Management: This is defined as the rational process if combining and utilizing the physical material and financial resource in an efficient and effective manner in order to achieve set objectives of the organization.

 Performance: A performance, in performing arts, generally comprises an event in which a performer or group of performers behave in a particular way for another group of people, the audience. Choral music and ballet are examples.

Productivity: Productivity is a measure of the efficiency of production. Productivity is a ratio of production output to what is required to produce it (inputs). The measure of productivity is defined as a total output per one unit of a total input.

Organizational Commitment (OC):  This is the individual’s psychological attachment to theorganization.

Resources: These are things that a country or an organization or individual uses especially to raised the level of output or wealth.

Workforce: This has to do with the sum-total of individuals that works in a particular organization.

References

  Avey, J., and Luthans K. W. (2008). Using positivity, transformational leadership and empowerment to combat employee negativity. Leadership and Organization Development Journal, pp. 110-126.

Baffour, G. G. (1999). The effects of employee participation and work design on firm performance: A managerial perspective. Management Research News, p. 6.

Bartram, T. and G. Casimir (2007). The relationship between leadership and follower in-role performance and satisfaction with the leader: The mediating effects of empowerment and trust in the leader. Leadership and Organization Development Journal, pp. 4-19.

Champathes, M. R. (2006). Coaching for performance improvement: The coach model.Development and Learning in Organizations, Volume 20, No. 2, pp.17 18.

Chen, F. and D. Tjosvold (2006). Participative leadership by American and Chinese managers in China: The role of leadership. Journal ofManagement Studies, Volume 43, Issue 8, pp. 1725-1752.

Duvall, C. K. (1999). Developing individual freedom to act empowerment in the knowledge organization. Participation and Empowerment (An International Journal), pp. 204-212.

Edgeman, R. L. (1998). Training and development principle centered leadership and core value deployment. The TQM Magazine, pp. 190-193.

Ellingeic, A. and S. B. Keller (2003). Supervisory Coaching Behaviour, Employee Satisfaction, and Warehouse Employee Performance: A Dyadic Perspective in the Distribution Industry. Human Resource Development Quarterly, Volume 14, Issue 4, pp. 435-458.

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