Understanding the Leadership Style-Employee Commitment Nexus in Banking Industry: The Mediation Role of Trust in Supervisor Using Structural Equation Modelling

Abstract

This study introduces the issue of Trust in Supervisor in the Leadership Style-Employee Commitment debate. The literature review pointed out that trust in supervisor plays a basic part in making committed workforce. The purpose of the study is to examine the effect of leadership style on employee commitment through the mediation of role of employees trust in supervisor with reference to Awash Bank. The study employed AMOS and SEM Method to test the hypothesized model. The result of the study indicated that the magnitude of all leadership styles, employees trust in supervisor and commitment was found high. In comparison, supportive leadership was the dominant type of leadership style while achievement oriented leadership style was the least practiced type. With respect to the mediation analysis, the result confirmed that employees trust mediates the relationships between leadership styles and employee commitment. Based on the result the study concluded that employees trust significantly and fully intercedes the linkage between directive, participative, achievement oriented leadership styles and commitment; whereas, employees trust partially mediates association between supportive leadership style and commitment.