Impact of Leadership Styles on Employee Performance in the Nepalese Finance Sector

Leadership remains one of the most influential organizational factors affecting employee performance, particularly within financial institutions operating in highly competitive and rapidly changing environments. Despite extensive international research, empirical evidence regarding the influence of leadership styles on employee performance in Nepal's finance sector remains limited. This study investigates the effects of autocratic, democratic, and laissez-faire leadership styles on employee performance among employees working in Nepalese financial institutions. The study employed a descriptive and causal research design. Primary data were collected through a structured questionnaire using a five-point Likert scale from 252 employees representing various financial institutions in Nepal. Descriptive statistics, correlation analysis, and multiple regression analysis were employed using SPSS to examine the relationship between leadership styles and employee performance. The findings reveal that leadership style significantly influences employee performance. Democratic and autocratic leadership styles exhibit statistically significant negative effects on employee performance, whereas laissez-faire leadership demonstrates a statistically significant positive influence. These findings suggest that leadership effectiveness depends on organizational context and employee expectations within Nepal's financial sector. The study contributes to the growing body of leadership literature by providing empirical evidence from a developing economy and offers practical implications for managers seeking to improve employee performance through appropriate leadership practices. Keywords: Leadership Style; Employee Performance; Democratic Leadership; Autocratic Leadership; Laissez-faire Leadership; Nepal; Financial Institutions.