THE INFLUENCE OF LEADERSHIP STYLE ON EMPLOYEES PERCEIVED PERFORMANCE AT TECHNOLOGY BASED SME IN BANDUNG

• Main Author: Purnomo, Adi
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/78684
• Institution: Institut Teknologi Bandung

Technology and information sector is happening in Indonesia. This sector is growing rapidly. However, it is not matched with the ability to survive. A study found out that the technology-based companies are failed within 3 years old. One of the major factors is the leader-follower relationship. This study aims to investigate the relationship between leadership style and employee’s perceived performance. There is leadership style as the independent variable and employee’s perceived performance as the dependent variable in this study. According to IOWA University, there is three type of leadership styles which are democratic, authoritarian, and laissez faire. To measure the leadership style variable, this study is used several indicators such as leader behavior, leader orientation, and decision-making process. The definition of employee’s perceived performance is employee’s perception about their performance in the organization. To measure the employee’s perceived performance there are 5 indicators such as quantity, quality, punctuality, effectiveness, and independence. This study found that there is a positive and significant relationship between leadership style and employee’s perceived performance. It is proved by the result of the SPSS test by simple linear regression analysis that the value of coefficient correlation is 0,652 it means there is a strong correlation. And the value of the coefficient of determination is 0,425 it means that employee’s perceived performance is influenced by 42,5% by the leadership style. While the rest (100-42,5=57,5) is influenced by other factors. From the 4 companies, all the leaders have tendency applying democratic style rather than the others. By applying a democratic style, it increases the perception of the employee about their performance. The behavior, expectation, and the way leaders communicate with the employees create the Pygmalion effect on the employee. This study proves the existence of Pygmalion effect in the technology-based companies in Bandung. This study also proved that democratic style makes the employee perceives their performance positively. It turns out that the behavior shown by a democratic leader is able to motivate employees to work better. In this study, the researcher found a leader that involves subordinates in the decision-making process, open to criticism, receive input from employees and help subordinates to grow, give a positive impact on employee’s performance. Not only that, since leaders often encourage them to convey ideas and opinions, it also has an impact on their initiatives ness in work.