Analyzing the Impact of Transactional and Transformational Leadership Styles on Employee Performance: Empirical Evidence from MSMEs

Leaders, Leadership Style, Transactional Leadership, Transformational Leadership, Employee Performance, MSMEs, Manipur

Business leaders have crucial functions and duties for optimising the performance of employees as they integrate the practices of utilising human and other resources in the organisation. They are considered indispensable for giving employees the right guidance and emotional commitment to make the best possible contribution at the workplace. The ability to adopt leadership styles that are effective in managing changes and new developments in the business is made possible by paying attention to the scope and complexity of the problems in an appropriate manner. Despite the fact that various leadership philosophies might have varying effects on how their employees behave, the business leaders must explore appropriate leadership styles for a sustainable business. It must give special heed to the effective leadership styles that will enhance employee performance. As a result, this study investigates how leadership styles can have different effects on employee performance in a changing business environment after the economic disruptions of COVID 19. The empirical findings suggest that employee performance is positive associated with transactional and transformational leadership styles. These leadership styles have positive impacts on the performance of employees. However, transactional leadership has a stronger positive impact on employee performance of Micro, Small, and Medium Enterprises (MSMEs) in Manipur.