The Effect of Leadership Styles on Employee’s Loyalty and Engagement: The Moderating Effect of Leadership Powers in Banks Operating in Palestine رسالة ماجستير

Abstract

This study aimed to investigate the impact of selected leadership styles on employee loyalty and engagement, with a focus on the moderating effects of leadership powers in banks operating in Palestine. The research employed a quantitative approach, targeting a population of 3,514 employees across six banks in Ramallah - West Bank. A total of (366) employees were surveyed using a structured questionnaire, and the data was analyzed using advanced statistical techniques through Smart PLS4. The findings revealed that leadership styles, specifically transformational, transactional, and authoritarian, positively influence both employee loyalty and engagement. However, these leadership styles have a more pronounced effect on loyalty than on engagement. Additionally, the study found that soft power capabilities—such as effective communication, cultural understanding, and relationship-building—significantly enhance the impact of leadership styles on engagement. In contrast, hard power capabilities, including authority, control over resources, and rule enforcement, have a more substantial impact on employee loyalty. As a results, the study recommend bank leaders to focus on transformational leadership, balance various leadership styles, and develop both soft and hard power capabilities to optimize employee loyalty and engagement, thereby fostering a more balanced and motivated workforce