Executive Summary

The Path-goal theory was originally developed by Evans (1970) and later modified by House (1971). The theory was designed to identify a leader’s most practiced leadership style as motivation to get subordinates to accomplish goals. The path-goal theory reinforces the idea that motivation plays an important part in how a supervisor and a subordinate interact and, based on that interaction, the overall success of the subordinate (House, 1971). To test whether employee productivity and motivation is linked to clearly defined, specific and challenging goals we distributed surveys to both the employees and managers of two Scotia Bank branches in the British Virgin Islands and Dominica. The surveys were both tailored to glean the leadership styles of the managers and provide a clear insight into how employees perceived their jobs. Upon analysis of the data we can see that the directive and achievement oriented leadership styles, with a lack of focus on supportive or participative leadership employed by the managers at the branch in Dominica led to dissatisfaction amongst their employees. In contrast the employees of the Scotia Bank branch from the British Virgin Islands had a far more favorable outlook when it came to job satisfaction as a result of the employment of participative and supportive leadership styles in conjunction with the manager’s achievement oriented and directive styles. We can see from the results of the survey and the supporting analysis that, while achievement oriented and directive styles are required to clearly set out job tasks and improve performance levels, these leadership styles have to be fused with more supportive and participative leadership to ensure that employees have a clear idea of their role in the organization, the importance of their contribution and a well defined set of objectives that will lead to personal and organizational growth (Aris and Kamarudin, 2009).

Introduction

According to Budhwar (2003), due to globalization, management practices should be studied in a diverse social and cultural perspective. While, affecting the socio-cultural environment, such changes also significantly influence managerial philosophies (Chauhan et al., 2005). Since organizations are social systems and human resources are the most important factors of the organizational efficiency and effectiveness, these changes and developments have implications both for the organization and their leaders. Tordera et al., (2008) consider leadership as an important construct for positive work outcomes, which ensures a satisfied and motivated workforce. While, Vecchio et al., (2008) believe that path-goal theory implies that employees are provided goals to encourage productivity, leadership leads to outcomes such as subordinates’ job satisfaction, commitment to their supervisors and the organization, and higher performance levels.

Literature Review

The Origin
The Path-goal theory was originally developed by Evans (1970) and later modified by House (1971). The theory was designed to identify a leader’s most practiced leadership style as motivation to get subordinates to accomplish goals. The path-goal theory reinforces the idea that motivation plays an important part in how a supervisor and a subordinate interact and, based on that interaction, the overall success of the subordinate (House, 1971).

Assumptions
The path-goal theory, according to House (1971), presents two basic assumptions. Firstly, “One of the strategic functions of the leader is to enhance the psychological states of subordinates that result in motivation to perform or in satisfaction with the job" (House, 1971, p. 3). In other words, leaders need to be aware of the necessary steps to clarify goals, paths, and enhance satisfaction through extrinsic rewards, which will in turn increase subordinates’ intrinsic motivation. Secondly, House (1971) asserted that particular situational leader behavior would accomplish the