The Impact of Leadership Style on Employee's Motivation

Abstract

This mixed methods study aimed to examine the relationship between the adopted leadership style and employees motivation in a private petrochemical company that is located in the eastern province of Saudi Arabia. A survey was developed and distributed to 30 employees in two departments. Furthermore, interviews were conducted with a focus group of 10 employees to validate the results of the survey. The study found that there is a strong relationship between leadership style and employee motivation where the correlation was positive with transformational style and negative with transactional style.

Full text

International Journal of Economics and Business Administration
Vol. 2, No. 5, 2016, pp. 37-44
http://www.aiscience.org/journal/ijeba
ISSN: 2381-7356 (Print); ISSN: 2381-7364 (Online)
* Corresponding author
E-mail address: dr.alialghazo@gmail.com (A. M. Alghazo), 201302527@pmu.edu.sa (M. Al-Anazi)
The Impact of Leadership Style on Employee’s
Motivation
Ali M. Alghazo
*
, Meshal Al-Anazi
College of Sciences and Human Studies, Masters of Education and Human Development Program, Prince Mohammad Bin Fahd University, Al
Khobar, Kingdom of Saudi Arabia
Abstract
This mixed methods study aimed to examine the relationship between the adopted leadership style and employees motivation
in a private petrochemical company that is located in the eastern province of Saudi Arabia. A survey was developed and
distributed to 30 employees in two departments. Furthermore, interviews were conducted with a focus group of 10 employees
to validate the results of the survey. The study found that there is a strong relationship between leadership style and employee
motivation where the correlation was positive with transformational style and negative with transactional style.
Keywords
Employee Motivation, Leadership Styles, Performance Improvement
Received: June 16, 2016 / Accepted: June 28, 2016 / Published online: July 27, 2016
@ 2016 The Authors. Published by American Institute of Science. This Open Access article is under the CC BY license.
http://creativecommons.org/licenses/by/4.0/
1. Introduction
Attracting and retaining employees in this age has become
increasingly challenging [1]. Globalization and multinational
factors have contributed to make human resources more and
more demanding. At the same time, motivating employees
have been found to be a catalyst for employees performance
and therefore for organization success.
The challenges that are faced by companies in this age are
not comparable with the challenges of the past. “No matter
the size or the type of the organization, it must behave in
innovative ways, seeking opportunity, solving problems, and
embracing new directions”, all types of organizations (profit
or non-profit) are in need for such inovation and creativity.
“there is emerging now a general set of requirements for
organizations, their managers, and their employees that
includes attributes like initiative, flexibility, and creative
problem-solving” [2].
Another challenge that faces the organizations of today is
how to retain its human capital in a competitive market.
Many companies struggle to offer attractive benefits, salaries
and incentives [1] (Davis, 2004). Small business can still stay
competitive by adopting effective methods of motivating
employees [3].
Leaders and managers play an important role in creating an
atmosphere and culture of enthusiasm and productivity
among the employees that help them do what they need to
do. “Most large organizations… continue to spend millions
each year on motivation courses, training in motivation,
meetings to boost motivation, incentives to strengthen
motivation, meetings to analyze problems in the workforce
motivation, tools to measure motivation, mission statement
and so on…” [4] with no real outcomes.
It seems that the reason for that is the lack of understanding
to what motivation means. As [5], “Although motivation is
widely recognized its essence is elusive… it is a complex
multifaceted construct, which researchers have approached
from many perspectives”.
This study examines the motivational factors for the

38 Ali M. Alghazo and Meshal Al-Anazi: Impact of Leadership on Employees Motivation
employees of a department in an oil and gas private company
that is based in the eastern province of Saudi Arabia. Using a
self-made questioner as an instrument to measure the factors
of motivation.
1.1. Research Aim/Purpose
This study attempts to analyze the perception of department
employees in a private company about the motivation factors
and how it relates to leadership styles. For this purpose, a
questioner which is adapted from a similar study [1] was
developed.
Further, the purpose the study was to find an answer for the
following main questions:
How do employees perceive the relationship between
motivation and leadership?
Are employees intrinsically or extrinsically motivated?
What motivates employees working in the oil and gas
industry?
What do the leaders currently do to motivate their employees
and what they need to do in the future?
1.2. Significance of the Study
There is a strong tie between motivation and achievement
[6]. He maintained that motivated employees are almost
always high achievers. Many leaders think that materialistic
rewards are enough to motivate their employees but it is not
and money alone will not do the impact in motivating your
employees while the leader is ignoring individual’s needs to
contribute to the organizations and make meaning out of
what they do [7].
The literature is almost saturated with research on
motivation. However, this study is specific to the context of a
small department in a private company. The value of this
study can be explained in two goals, which are to:
 Identify useful strategies that can help the leaders in an oil
and gas company develop an atmosphere of motivation.
 Add to our understanding about the impact of leadership
on employees’ motivation.
This study was conducted on the employees of oil and gas
company, which is located at the eastern province of Saudi
Arabia.
2. Literature Review
2.1. Theories of Motivation
In order to understand motivation we need to historicize its
theories. Theorists of motivation such as Maslow, Mayo,
Hertzberg, McGregor and Vroom have contributed to human
understanding of this topic [1]. Although These theories are
not new but they still are relevant today [8], [3], [9].
According to [10], probably one of the most famous
theories of motivation is Maslow’s Hierarchy of Human
Needs Theory. This theory suggests that people have five
levels of human needs and they are in order physiological,
safety, belonging, self-esteem and self-actualization.
According to [3] first level has to be satisfied before
moving to the next level and so on. While physiological
needs were enough to motivate people in the past, [11]
claims that today’s employees are looking for higher needs
to be satisfied.
Another theory of motivation is the theory of X and Y for
McGregor. In this theory, McGregor placed people in two
groups; X group who are the people interested in rewards and
compensation, and Y group who are the self-directed people
and who are looking for challenges [3]. Herzberg is another
theorist who studied employees motivation and developed a
thesis which categorizes motivation in two groups;
motivators and hygiene [12]. Hygiene factors are the
extrinsic motivators such as benefits, salary while the
motivators are intrinsically oriented such as challenging work
and greater responsibilities [13].
Expectancy theory for Vroom was specifically developed for
work context. This theory suggests that employees
voluntarily choose one behavior over another if they believe
that this behavior will result in a desired outcome, application
for example [14].
These theories are still relevant today and they have actually
influenced the way current theories explain motivation [1].
Many theories today still believe in the validity of these
theories and more importantly emphasis the intrinsic factors
of motivation [15], [16] and [17].
2.2. Leadership and Motivation
Developing an understanding of the impact leadership can
make on employees motivation is important [18]. In the past,
the mission of leader in relation to employees motivation has
not been clear [1] and leaders frequently undermined the
importance of developing effective relationship with
stakeholders including the employees [19].
Leaders also must recognize that what motivates “X” is
different than what motivates “Y”. Broder maintains that
leaders should implement different strategies that are
customized to individuals. For example, some employees
simply motivated by the job security, others by clear company
policies, power, recognition, compensation, on the other side,
there is a category of employees who are intrinsically
motivated who are just enjoying what they do [20].

International Journal of Economics and Business Administration Vol. 2, No. 5, 2016, pp. 37-44 39
2.3. Leadership Styles
There are many leadership styles such as authoritarian,
paternalistic, democratic, laissez-faire, transactional and
transformational [21]. In order to narrow down the research I
will discuss only transactional and transformational styles.
According to [22], transactional leader doesn’t involve
regularly with the workers unless a mistake or deviation
occurs. He maintained that transactional leaders want the
same procedures in the company to be followed flawlessly
every time the job is done. Additionally, transactional leaders
don’t motivate their employees or help them in a career
growth.
On the other hand, transformational leadership is
inspirational, challenging, charismatic, stimulating and
always developing the capability of the employees. As a
result, employees are willingly work towards their full
potential inspired by transformational leader [22].
2.4. Leadership and Decision Making Styles
According [23] discussed variety of ways through which
leaders can make decision. He maintained that leader can
expand or limit the participation of employees in the decision
making process. These procedures as follows:
 Autocratic Decision: in this case, employees have no say
at all and the leader or manager is having full influence
over the decision.
 Consultation: leader makes the decision but after taking
other employees opinion.
 Joint Decision: leader has equal influence over decision
just same other employees.
 Delegation: the authority of decision-making is given to
other employee by the leader.
When leaders engage their employees in making the decision
it is more likely that the decision will enhance the quality of
the decision, make it easily accepted, enhance employee’s
satisfaction and foster development of employee’s skills [23].
2.5. Power of Motivation
The power of motivation can’t be overemphasized [24].
Motivation has the power to energize people not only by
pushing them towards the right direction but by meeting their
basic human needs of self-esteem, belonging, recognition,
feeling of self-directedness and the ability to live one’s ideals
[15].
Motivation has been found to be correlated with employees
productivity [25].
In his article, [26] explains the different styles of leadership
and how they effect employee’s motivation. According to
Root, managers who follow Autocratic leadership styles
(make decisions by themselves without consulting
employees) can be beneficial decision speed matters and
when managers are knowledgeable and this by turn makes
employees more comfortable and motivated with this type of
leadership. The other style discussed by Root is the
Democratic style of leadership and its influence on
employee’s motivation. In this approach, employees are part
of decision-making process and by that they feel included
and their opinions are valued [26]. The third style is the Quit
leadership when the manager almost delegates most if not all
of his/her duties to the staff who are highly qualified and by
that, they are empowered to make their own success. The last
style discussed by Root is the Transformational style where a
leader or a manager brings a vision of the future and set clear
plan of achieving this vision.
2.6. Other Relevant Studies
[27] surveyed 50 employees in a petrochemical company in
India to find out the relation between leadership style and
motivation. They found that employees tend to be more
motivated with transformational style of leadership than
transactional or laissez-faire styles. [28] investigated the
impact of leadership style on employees on a Croatian
company and they found that employees are motivated with
participative leadership style than with authoritarian one. In
a recent study conducted by [29] who surveyed 378 people
to find out the impact of transformational leadership style
on employees morale and motivation, he found that the
there is a significant relationship between these variables.
Another recent study by [21] who investigated the
relationship between intrinsic and extrinsic motivation with
the types of leadership styles that are transactional and
transformational. He found that a close positive relationship
between transformational and intrinsic motivation, while
there is a relationship between transactional and extrinsic
motivation. This study, according to the research, had
implication on recruiting and selection, leadership
development.
Although motivation has been widely an interesting topic of
research in the field of industry, there are still little studies
aimed to understand the perception of employees about
motivation in the field for oil and gas companies in the
eastern province of Saudi Arabia.
3. Methods of Data Collection
Research is all about collecting information [30]. Collecting
information can be either informally or through a rigorous
procedure [1]. The method used in any research should be
appropriate in order to address the research question/s [21].

40 Ali M. Alghazo and Meshal Al-Anazi: Impact of Leadership on Employees Motivation
For the purpose of this research, mixed methods approach
of quantitative and qualitative methods was used to collect
data. Quantitative approach is used to test a hypothesis,
measure the size of phenomenon of interest and then
generalize the results [31]. Qualitative approach is used
when you want to understand the phenomenon and take into
consideration personal opinions [32]. Such qualitative
analysis will assist in acquiring a better understanding of
the specific context of an oil and gas industry setting.
Choosing mixed methods approach will help ensure the
reliability of the results, make it easily accepted by readers
and most importantly, overcome limitation of single
methodology [33] Using multiple methods in the same
research gives more credibility to the study and strengthens
its results.
In order to study the perception of employees on the impact
of leadership, a questionnaire was developed to measure
employees responses. A five point Likert Scale with strongly
agree; agree; neutral; disagree; and strongly disagree, was
used from main items. To collect data, an email with the link
to the questionnaire was sent to the employees of the
company. Once responses were received, they were
consolidated in a sheet and analyzed using descriptive and
inferential statistics.
Participants of this survey were randomly selected. Random
sample technique ensures equal opportunity to all target
population to participate in the study, hence, more reliable
results.
3.1. Data Analysis
Survey results were compiled and entered in SPSS and
results were analyzed accordingly. Applicable descriptive and
inferential statistics has been extracted. For the results
collected from the interviews (qualitative data), it was
analyzed using thematic and coding.
Part I: Descriptive analysis
i. Participants age
Table 1. Participant’s age.
N Minimum Maximum Mean Std. Deviation
Age 30 20 50 29.07 6.389
Valid N 30
 The average age of participants is 29, and the range of age
among participants is 30.
ii. Participants positions (managerial or non-managerial)
Figure 1. Participants Position Type.
 Of total number of participants, 22 are in non-managerial
position, while eight are in managerial position.
iii. Departments
Figure 2. Participants Departments.
 Of total number of participants, 22 are in shared services
department, while eight are in operation.
iv. Education level
Figure 3. Participants Educational Level.
 Two third of participants are having master degree while
one-third is having bachelor degree.
v. Years of experience of participants

International Journal of Economics and Business Administration Vol. 2, No. 5, 2016, pp. 37-44 41
Figure 4. Participants Years of Experience.
 The average years of experience are 5 years.
vi. Below graph shows the percentage distribution on what motivates the employees in the workplace, according to the
participants.
Figure 5. Participants Motivation Triggers.
 The highest motivator is trustworthy leadership, and the lowest is clear job description.
vii. Which style of leadership is more likely to motivate the participants of the study?

42 Ali M. Alghazo and Meshal Al-Anazi: Impact of Leadership on Employees Motivation
Figure 6. Participants Preferred Leadership style for Motivation.
 After describing each style of leadership, More than two-
thirds of participants selected transformational style of
leadership as a style that is more likely to motivate them.
Part II: Correlation analysis
i. Correlation between education level and the preferred
style of leadership
Table 2. Correlation analysis of Educational level and Preferred
Motivational Style.
Education
Level
Which style of
leadership is more likely
to motivate you?
Education
Level
Pearson
Correlation 1 -.167
Sig. (2-tailed) .378
N 30 30
Which style of
leadership is
more likely to
motivate you?
Pearson
Correlation -.167 1
Sig. (2-tailed) .378
N 30 30
No significant correlation is found between the two variables.
ii. Correlation between participants department and preferred
style of leadership.
Table 3. Correlation analysis of Department and Preferred Leadership Style.
Which style of
leadership is more
likely to motivate you?
Department
Which style of
leadership is
more likely to
motivate you?
Pearson
Correlation 1 .318
Sig. (2-tailed) .087
N 30 30
Department
Pearson
Correlation .318 1
Sig. (2-tailed) .087
N 30 30
No significant correlation is found between the two variables.
3.2. Findings from the Interview
The interview was conducted with 10 employees to validate
the results of the survey. The interview was semi-structure
and it was short due to time limitation. The questions were
mainly derived from the survey questions. In general, 8 out
of 10 employees agreed that transformational leadership is
more likely to lead to a better job satisfaction. The other two
employees said that it is not a big matter to work with any
type of leader. In the following part, I provide sample from
their responses:
Employee# 1: “I enjoy working with my supervisor because
he is trusting me and he also gives an opportunity to share
my opinions”
Employee# 2: “I feel happy when my manager sets
challenging goals and inspires me to achieve them”
Employee# 3: “I am new in the company but I can tell that
my manager is a transformational leader who tries to bring
the best of each employee and that is very interesting to me”
Employee# 4: “I am not happy about my manager because he
is silencing our voices and always takes a decision a lone”
Employee# 5: “My supervisor can be better if he listens more
to us”
Employee# 6: “My manager ignites my energy and I feel
motivated when he is available”
Employee# 7: “My manager only looks for mistakes and I
feel there is a distance between us”
Employee# 8: “I can’t work with someone who chase my

International Journal of Economics and Business Administration Vol. 2, No. 5, 2016, pp. 37-44 43
mistakes and enlarge them while underestimating my
achievements… my manager does that”
Employee# 9: “My manager sets clear goals for the team and
he closely monitors our progress and provide the resources
we need to accomplish our tasks, and that is a big motivator
for me”
Employee# 10: “I am delighted to work with such a leader
who is very respectful for us. I feel that he is prioritizing our
needs over his own needs and agenda”
The interview conducted with the employees has revealed the
following themes:
i. Managers who want to motivate their staff shall be
respectful, supportive and put the needs of their
subordinates first.
ii. Listening to employees voices is important to improve the
work environment and motivate employees
iii. Waiting until last minute to do intervention (transactional
leadership) could have potential negative consequences.
4. Conclusion
The purpose of this research was to examine the perception
of private petrochemical company employees about the
leadership styles and its effect on employee motivation. A
combination of qualitative and quantitative methods was
used in this study. Results from data collected indicate that
leaders who adapt participative and transformational
leadership are more likely to create an atmosphere of
motivation among their employees. In general,
transformational leadership might be of more preference for
the employees of this study than transactional. This result is
consistent with other researches such as the research
conducted by [21], [34] and [35]. The implication of this
study is that managers who want to be more effective might
need to be more inspirational, supportive, resourceful, and
work to develop their subordinate’s capabilities. Further
research is required to the study findings with the similar
firms in the region.
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