Factors influencing leadership in the South African banking sector and the subsequent impact on employee engagement

Abstract

The business environment is continually evolving at a rapid rate, and businesses must stay abreast of these changes to stay competitive. Organisations are constantly under pressure to respond to these changes swiftly and this results in organisations having to make strategic decisions that often require a change in the organisation’s strategy. Most of these organisations have turned to restructuring as a strategic response to change, as well as the deployment of new technologies to counter the effects of these changes. These types of changes tend to have significant impact in the organisation and the impact has a detrimental effect on employee engagement. This study investigates the impact of factors that lead to strategic changes in leadership as well as the level of employee engagement resulting from these factors in the banking sector. The aim of the consulting project is to help management with identifying how their leadership style impacts the organisational change process and the importance of having a highly engaged workforce to help drive the strategic agenda for successful organisational change. The study was conducted using a qualitative design through a series of semi- structured in-depth interview questions, it was conducted with employees from different banks in South Africa, and the interview questionnaire consisted of questions that related to leadership styles, change management, employee engagement and team performance. The interviews were conducted across multiple South African banks that have undergone strategic changes. In the research it was found that the most prominent factor that brings about change in the banking sector are external to the bank’s operations and restructuring, as well as technological factors were identified as the two major factors that resulted from these changes. It was found that an authoritative leadership style is the most prominent in the banking sector and it often negatively impacts the level of employee engagement while promoting a bureaucratic culture, whereas a learning culture should be the one that leadership should strive for as it contributes to the positive level of employee engagement similar to the transformational leadership style. Based on the outcome from the research, I recommend that leadership addresses the level of employee engagement in the banks as a matter of priority rather than a peripheral area of focus only to be addressed by Human Resources. Change is constant and in a business environment that is constantly changing, the level of employee engagement determines the successful implementation of changes. Leaders in the organisation should always put their leadership skills into practice. They should understand how their leadership skills and behaviour affect team performance. They should identify when their leadership skills are not yielding positive results for their organisation.