organizational performance

Leaders' style of leadership and Employee engagement on organizational performance is analyzed from two perspectives namely Human Resource Management (HRM) and Organizational Behaviour (OB). Leadership is one of the most important mechanisms of management and behavior that affects the attitudes, motivation, commitment, cooperation and performance of employees in an organization. Employee engagement, in turn, reflects the level of cognitive, emotional and behavioural contribution employees make to their organization and their work. The paper is based on a conceptual model that employee engagement is a mediating relationship between leadership style and organizational performance. The transformational leadership, transactional leadership, democratic or participative leadership and laissez-faire leadership types are explained and discussed in relation to the employee motivation, communication, psychological involvement, job satisfaction, and the discretionary effort. Transformational and participative leadership in general results in better conditions for engagement as they focus on vision, support, recognition, participation and development. While transactional leadership can help to boost performance when goals, standards, rewards are clear, too much laissez-faire leadership can diminish role clarity and accountability. The paper also reveals employee engagement as an important mechanism that ties leadership behaviour to employee outcomes like productivity, service quality, innovation, retention and organizational citizenship behaviour. The research results indicate that the leadership development and engagement programs are not separate and managers should see them as two aspects of the HR and OB role. These can increase engagement and contribute to the sustainable performance of the organisation: a people-centred leadership style; fair HR systems; meaningfulness of the work; communication; and recognition and development opportunities.