THE EFFECT OF SERVANT LEADERSHIP STYLE ON BANK PERFORMANCE: EVIDENCES FROM BERHAN BANK OF ETHIOPIA

Abstract

Servant leadership plays a critical role in the banking sector, but banks continue to face leadership problems that hinder their competitiveness in terms of human resources. Issues such as job insecurity, inadequate pay, and excessive job demands can erode an employee's commitment and efficiency in achieving good bank performance. Despite this recognition, there are relatively few research studies on the variables that could affect servant leadership and its impact on bank performance. To address this gap, a study was conducted in the Hawassa City Administration of Ethiopia, taking Berhan Bank as a case study. The study aimed to analyze the effect of servant leadership practices on bank performance. A total of 120 questionnaires were distributed to employees from selected branches of Berhan Bank in Hawassa town. Quantitative approach, with descriptive and explanatory research designs was employed. The findings of the study revealed that the dimensions of servant leadership such as altruistic healing, emotional healing, wisdom, persuasive mapping, and organizational stewardship were found to have a significant impact on the organizational performance of the bank. Based on these findings, it is recommended that Berhan Bank adopt appropriate servant leadership practices which involve exhibiting servant leader behavior and creating a positive working environment. This will help satisfy employees and ultimately improve their performance.