2025, Vol. 8, Issue 2

author(s)
Mojisola Oladunni Jacob-Udeme, Godwin Emmanuel Oyedokun and Oluwatosin Abiodun Ologbosere

abstract
Leadership styles significantly influence employee performance, which is central to organisational success in the financial sector. This systematic literature review explores how different leadership approaches affect employee outcomes, drawing on empirical studies published over the past decade. Guided by the PRISMA framework, a search of databases including Scopus, Web of Science, PsycINFO, and Google Scholar identified 750 studies, of which 12 met the inclusion criteria. The findings indicate that transformational leadership consistently enhances employee commitment, satisfaction, and productivity, positioning it as the most effective style in financial institutions. Transactional leadership, while less impactful, proved valuable in structured environments where rewards and task clarity drive performance. Participative and democratic leadership also showed positive effects, especially in contexts that encourage employee involvement and innovation. Conversely, laissez-faire leadership was generally associated with weak or negative performance outcomes. Importantly, mediators such as organisational culture, financial innovation, and employee commitment strengthened the relationship between leadership and performance. This review highlights the need for financial institutions to develop context-specific leadership strategies that integrate transformational, transactional, and supportive practices. It also identifies research gaps in methodological transparency and cross-cultural comparisons, underscoring the importance of future studies that address these limitations.