In today’s competitive banking environment, effective leadership is essential for improving employee performance and sustaining organizational success. This study investigates the impact of leadership styles on employee performance, with employee commitment as a mediating factor, focusing on Commercial Bank of Ethiopia branches in Dessie City. Explanatory research designs were employed, using a quantitative approach. Stratified and simple random sampling ensured broad representation across branches. The data used in the study were primary data collected using a self-administered questionnaire. Data were analyzed using Smart PLS 4 for Structural Equation Modeling. It was revealed that autocratic, democratic, laissez-faire, and TrcL had significant positive effects on employee commitment. All except TL also directly influenced employee performance. This shows that the model explains 64.4% of the variance in employee commitment while 69.5% of employee performance was explained by the combined effect of leadership styles and commitment, with the remaining variance attributable to other factors not included in the study. Additionally, employee commitment positively affected performance and significantly mediated the relationship between all five leadership styles and performance. These findings emphasize the critical role of commitment in translating leadership practices into improved employee performance. Based on the findings, organizations should promote leadership styles (LS) that enhance employee commitment, especially TrcL, DLS, and TL. Training programs, consistent application of effective leadership, open communication, and motivation strategies are essential.
Abate et al. (Mon,) studied this question.