INFLUENCE OF TRANSFORMATIONAL LEADERSHIP ON PERFORMANCE: DOES EMPLOYEE COMMITMENT MATTER? EVIDENCE FROM DEPOSIT TAKING SACCOS IN KENYA

Objective: The general objective of this study is to establish the influence of Transformational Leadership on Performance of Deposit Taking SACCOs in Nairobi city County, Kenya and more specifically establish the role of Employee Commitment in the relationship between transformational leadership and performance of the SACCOs. Theoretical Framework: The main concepts and theories that underpin the research and chosen to anchor the variables of the study include: Transformational leadership theory, Self-determination theory and Contingency theory. Method: The research philosophy embraced by this study was positivism. The research design used was descriptive research design and Census Survey was conducted on the forty (40) deposit taking Savings and Credit Cooperative Societies (SACCOs) in Nairobi City County, Kenya (SASRA, 2016). The study relied on primary data which was collected using structured questionnaires with close-ended questions. Results and Discussion: The results obtained from this study reveal that transformational leadership has a significant influence on performance of DTSACCOs which is in line with transformational leadrship theory that transformational leaders are able to articulate organizational goals and objectives in a bid to achieve the set objectives in organzations. At the same note, employee commitment was found to have a significant mediationg influence in the relationship between transformational leadrship and organzational performance. The limitations of this study is that data was collected from at a snap short (one point in time) and hence lmiting comparison. Research Implications: These results further reveal that organizations ought to provide a challenge to the goals, the feedback mechanism provided by management, and the opportunity to participate in decision-making by eemployees as it will raise their levels of commitment. The SACCOs’ management need to embrace strategies that enhance the employees’ level of commitment by making them achieve their needs since this contributes to employees feeling competent and confidence, which results in increased employee commitment and greater performance. In addition SASRA needs to come up with policies and programs that enhance employee commitment and encourage leaders to embrace the commitments of employees towards achieving the organizations performance. Originality/Value: The study contributes to literature by contributing to operationalization and conceptualization of the variables whch a long way to providing insight for scholars and researchers. These research also provide input regarding leadership practices and Employee engagement in the said SACCOs to improve Performance. The study also enriches the body of knowledge in relation to leadership, employee commitment and performance. Finally, the study shall contribute into policy by guiding SASRA in coming up with regulations that promote employee engagement and raise their commitment.