Banks generate additional cash for the economy by turning de
Banks generate additional cash for the economy by turning deposits into loans. Our study shows that deposits have a positive association with bank liquidity. Bonner et al. (2013) also had similar findings. However, Alger and Alger (1999); Dinger (2009) and Kashyap et al. (2002) found a negative relationship between deposits and bank liquidity. It is noteworthy that these studies were not conducted in an Indian context. This finding implies that with an increase in deposits, banks should also increase their liquidity holding so that a bank run can be avoided in case of high deposit withdrawal.
Introduction Uncertainty in global market has made organizations more aware and prone to adopt change on a continuous basis. The complexity of the business operations requires that there must be an effective participation from every level of the organization. In addition to land, labor, and capital, human resource is also an important asset of organization. It plays a key role in the smooth running of the organization and achieving its goals. In this ever-changing and competitive global market, human resource can become the competitive advantage of the organization, if managed effectively. This is evident from literature that leaders have significant influence on subordinates. The significance of leadership style increases in the services sector, as it has direct impact on economic development. Therefore, the development and growth in services sector ensures the overall growth of national economy, especially in a developing country. The banking sector of Pakistan is growing gradually that has given rise to intense more bonuses among banks. Therefore, in order to stay ahead of competitors, banks can manage their human resources effectively by employing different leadership styles in this regard. According to Saari and Judge (2004), use of transformational leadership can boost up employees’ morale and result in job satisfaction. As the banking sector of Pakistan is facing different problems like high turnover, lack of commitment and job stress among employees (Asrar-ul-Haq, 2015), the importance of effective leadership has increased. Therefore, the purpose of this study is to examine the impact of managers’ leadership styles on employee performance.
Problem statement Asian countries for its performance (Rehman & Raoof, 2010). The competition in the banking sector is increasing day by day. Today, the high pressure on the economy of Pakistan and changing monetary policies has increased the importance and challenges of this sector. In addition, the long work hours, stress, employees’ lack of commitment, job dissatisfaction and high turnover in banks have intensified the need for effective leadership. In order to maintain the growth and achieve higher objectives, the top management in the banks needs to understand the problems and make strategies to satisfy, retain, and motivate employees to exert extra efforts. In other words, it needs such leadership in its branches that can achieve organizational goals efficiently and effectively. Leaders should have the ability to motivate its employees to exert extra efforts to achieve higher goals. Moreover, the existing leadership (managers) should adopt such leadership styles that help to augment subordinates’ satisfaction, their efforts and performance. According to the Full Range of Leadership (FRL) model by Bass and Avolio (1994), the most effective leadership styles are transformational and transactional leadership styles, if adopted collectively, to motivate subordinates, influence their behaviors and attitudes and improve their performance. Although FRL model has been validated in numerous settings to measure the impact of both transformational and transactional leadership styles, yet the researchers are unable to reach some final conclusion that what types of leadership styles should be used in which settings. It might be due to the difference of culture (organizational as well as national). Leadership is not the same thing across cultures (Bhagat & Steers, 2009) and leadership styles may be perceived differently in different settings. Therefore, there is an acute need to study this concept in Pakistani context to examine the universality of Full Range Leadership model. Further, it will help the banking leadership to know that how their subordinate perceive their leadership styles and how it impacts their performance. It can help them change their leadership styles according to achieve higher goals (Fig. 1).