Does leadership style matter in constrained public organizations? Recently a number of studies have demonstrated that employee perceptions of leadership are related to a number of sought-after organizational outcomes (Moynihan, Pandey, & Wright, 2012; Oberfield, 2012; Trottier, Van Wart, & Wang, 2008; Wright, Moynihan, & Pandey, 2009). But does the leaders’ own perception matter? And what if the leader has an entirely different view on the leadership styles than their employees do? This paper sets out to study the relationship between leader and employee perceptions of leadership styles and their combined impact on organizational performance.

The leadership literature is vast and diverse, but a key distinction is between transformational and transactional leadership. Transformational leaders stimulate their employees and change their beliefs, assumptions, and behaviors by appealing to the importance of collective or organizational outcomes, whereas transactional leaders direct their attention at the employees’ self-interest by offering rewards or threatening with sanctions (Moynihan et al., 2012). Especially transformational leaders are expected to enhance their employees’ levels of motivation and thereby organizational performance. Ultimately, leadership style must be perceived by employees to have an impact, and the strong tradition for measuring leadership style among employees is therefore very reasonable. Nonetheless, leaders will also have their perceptions of their own leadership style, and we know almost nothing about how this corresponds to the employees’ perceptions. One study from the private sector suggests significant discrepancies, and that it hurts organizational outcomes, when leaders and employees are not on the same page (Tekleab, Sims, Yun, Tesluk, & Cox, 2008). There are not, to our knowledge, any public sector studies, which use a similar approach. Furthermore, we need studies, which study the relationship between leadership styles and objective measures of performance. We will do both. Our research question is: How are leaders’ and employees’ perceptions of leadership style related, and how do these perceptions affect organizational performance?

We will investigate these questions empirically in the area of upper secondary education in Denmark. This is a well-suited area, because the employees refer to one leader in well-defined organizations, and there is substantial variation in leadership style and school performance. We have extremely reliable performance data in the form of register data on student grades. Furthermore, we have already gathered survey data from around 100 school leaders and 4,000 teachers. This allows us to perform a multi-level analysis of 1) the relationship between the leaders’ and teachers’ perceptions of leadership styles, and 2) study the relationship between these perceptions and organizational performance controlled for a number of variables, which could potentially influence the grade levels. The study can therefore offer a unique contribution to our knowledge about what leadership is, and what its effects are on organizational performance.