Linking Leadership Development to Performance
Linking Leadership Development to Performance | Human Resource Executive Online
With increased scrutiny over senior-leadership decisions, human resource executives must ensure the processes used to evaluate and develop leadership performance provide clear feedback and guidance on the skills that matter for the future of the organization. A recent study concludes that two distinct sets of leadership skills were most strongly associated with profitability and revenue growth -- inspirational leadership and responsible leadership.
By James Emery, Sim Sitkin and Sanyin Siang
The challenges confronting human resource professionals have never been greater than those they face today. In the wake of taxpayer financed bailouts, scrutiny is escalating over senior leadership decisions in corporate America.
Questions are also being raised about some of the traditional training approaches used to prepare employees to lead in an increasingly global economy. In this environment, human resource executives must ensure that the processes used to evaluate performance and the activities designed to develop leadership talent provide clear feedback and appropriate guidance on the skills that matter for the future of the organization.
Recently, the Fuqua School of Business/Coach K Center on Leadership & Ethics (COLE) at Duke University conducted its Duke Executive Leadership Survey. The survey found that two distinct sets of leadership skills were most strongly associated with organizational performance in terms of profitability and revenue growth.
The first skill set, associated with inspiring others, is consistent with what has been seen in popular literature and media. When "inspirational leadership" is discussed it is usually in terms of a charismatic leader getting followers excited, but it is not usually linked to exactly what that leader needs to do, especially in the absence of charisma. We found specific inspirational leadership skills that had positive effects, including:
* Demonstrating optimism and enthusiasm for organizational objectives,
* Engaging other employees in the company's vision, and
* Inspiring other employees to raise their goals.
While these findings are consistent with commonly-held beliefs, they also provide some additional actionable insight into how inspirational leaders contribute to improved organization performance. Specifically, these skills suggest that inspirational leaders have this effect by encouraging followers to pursue more challenging goals, which leads to greater individual and, ultimately, organizational performance.
Less intuitively, a second skill set, associated with inculcating a sense of responsibility and stewardship, was also found to be strongly associated with organizational profitability and growth. These responsible leadership skills included:
* Promoting an ethical environment,
* Promoting a sense of responsibility for the whole organization, and
* Helping other employees balance their personal interests and responsibilities with their professional interests and responsibilities.
As economic shocks encourage many analysts to ask, "What has gone wrong in how we have been producing ethical business leaders?" these findings point us to some interesting issues for human resource professionals.
The findings do not identify a focus on regulation and control, or individual rewards and punishments, nor do they highlight problem analysis or even execution. Instead, they stress the role of the leader in promoting a commitment among followers to broader organizational missions and responsibilities.
The Importance of Performance Evaluation
While conventional wisdom views performance evaluation as being driven by managers and using mostly quantitative measures, the survey found that one-third (34 percent) of organizations are using 360 feedback, while another one-quarter (27 percent) are using manager-employee joint feedback as their performance evaluation and goal-setting processes.
Because the survey also found that the use of a purely quantitative reward system was negatively related to organizational performance, the prevalence of more comprehensive evaluation processes appears to be a step in the right direction.
Designing an effective performance-evaluation process is a critical, but challenging activity for leadership development in organizations for a number of reasons.
First, based on the survey results, performance-evaluation discussions were the most commonly identified training-and-development activity used with senior managers. Given the prevalent use of these discussions, it is essential for organizations to get the performance evaluation process right.
Second, the survey showed that responsibility for leadership development was widely distributed within organizations.
Specifically, while local department managers were most frequently identified as having primary responsibility for leadership development, executives from larger employers -- identified in this survey as firms having 1,000 or more employees -- almost as frequently indicated that corporate training and development departments also played a major role.
Larger employers were also more likely to report a major role in leadership development for the corporate human resource function. While it is encouraging that executives recognize the crucial role of human resources and training and development, there is a danger that general managers have come to view leader development as a "specialized" function rather than a pervasive management responsibility that needs to be strategically supported by human resource professionals.
Third, existing and emerging research, such as "The White Standard: Racial Bias in Leader Categorization," which was published in the Journal of Applied Psychology in 2008, shows that evaluations are subject to biases arising from factors, including how well the individual being evaluated fits with evaluators' leader stereotypes regarding the role for which the person is being evaluated.
Historically, these biases have been shown to disadvantage women and members of minority groups.
Other research, Agentic Women and Communal Leadership: How Role Prescriptions Confer Advantage to Top Women Leaders, by Ashleigh Rosette, a COLE-affiliated Duke professor, that was presented at the Organizational Behavior Conference in 2008 suggests that, for top leaders, a different stereotypes may emerge based on the belief that if an individual has been able to overcome these disadvantages, they must have especially high levels of leadership skills.
Collectively, this research shows that particular attention must be paid when interpreting evaluation data as biases are likely to vary based on demographic factors, as well as the level and position for which the person is being evaluated.
To address these kinds of challenges, performance-evaluation processes need to be designed to reduce stereotypical thinking, as well as other kinds of perceptual biases, at each stage of the evaluation process.
A fourth challenge is the survey finding that most senior executives are believed to spend less than 25 percent of their time on leadership-development activities, even for positions typically associated with leadership development.
While it is clear that the quality of the time spent on leader development is far more important than the quantity of time, we found that the quantity of time does matter and that many organizational leaders are reporting that senior executives are simply not putting in the necessary time.
Specifically, about two-thirds (65 percent) of executives whose firms have a head of human resources, half (50 percent) of executives whose firms have a chief learning officer, and four in 10 (40 percent) of executives whose firms have a head of leader development, indicated that no more than 25 percent of those individuals' time was spent on leadership development.
This may be seen as a clear signal that leadership development is not a high priority, despite rhetoric to the contrary.
In this environment of complex evaluation biases, diversified responsibilities, in which many senior executives are perceived to be spending only a limited amount of time on leadership development, the challenge for human resource professionals is to ensure that leadership-development activities and performance-evaluation discussions, in particular, provide consistent and coherent guidance to employees.
Program Design
The big picture from this research is clear, human resource leaders need to take stock of their organizations' leadership-development activities to ensure that the design and delivery of these activities actively address all of the skills that matter for organizational success.
The results also point to a potential challenge for human resource professionals in getting senior executives more involved in leadership development so as to signal the seriousness of the organization's commitment to such development.
In order to effectively develop leadership skills, an organization needs to incorporate the following critical success factors in its design. First, the approach should focus on actionable behaviors and an understanding of the specific effects those behaviors have on others.
Second, input about an employee's leadership behaviors and the effect of those behaviors on others should be gathered from across the range of individuals that interact with that employee.
Analyses of 360 surveys show substantial differences in the way managers are viewed by supervisors, peers and direct reports. Further, research in the Journal of Applied Psychology in 2003, "Effects of Multisource Feedback and a Feedback Facilitator on the Influence Behavior of Managers Toward Subordinates," shows that developmental feedback is conceived as more useful and less likely to be ignored if it comes from multiple sources.
Thus, leader-development approaches that only rely on one or even two sources of input regarding leadership performance are likely to be suboptimal. While the Duke survey found that approximately one-third of organizations are already using 360 feedback, this still means that two-thirds have not yet adopted these processes.
Third, leadership-development approaches need to be structured to provide performance-improving feedback in a non-threatening manner that allows time for personal reflection.
While research has shown that facilitated developmental feedback can be beneficial to improving skills, a key issue is the relationship between the employee receiving the feedback and the individual providing the "coaching."
Acceptance of coaching requires that the source information and the coach be seen as competent, trustworthy and able to assist the person receiving the feedback in translating the information into concrete goals.
Some common mistakes that organizations make in developmental coaching include:
* Providing only written feedback with no process for creating coherence and focusing employee attention on specific developmental steps,
* Assuming that the managers providing the feedback have the necessary leadership skills themselves to provide effective coaching,
* Coupling developmental conversations with incentive and promotion decisions, thus limiting the individual's attention and receptivity to the developmental feedback being provided, and
* Failure to provide consistent, on-going evaluation and feedback processes that enable employees to see the results of changes in their leadership behaviors.
A final challenge suggested by the Duke survey is the need to increase senior executive time spent on leadership development.
The good news from the survey is that senior executives do see leader development as being among the top five leadership challenges confronting their organizations with only the issues of leading innovation and internal growth being seen as bigger challenges.
However, the survey findings also suggest that many executives see the primary responsibility for leader development as a specialized function rather than as a pervasive responsibility for all. Taken together, this may suggest that many senior executives believe their current involvement in leadership development is adequate given competing organizational priorities and the range of individuals in the organization tasked with addressing this challenge.
Further research is required to test this explanation and to explore middle-manager perceptions regarding the adequacy of senior management efforts in developing organizational leaders.
However, human resource leaders might assume that, in the current economic environment, many senior executives will focus on the fundamental operational and financial challenges confronting their organizations and defer leadership-development issues for less pressured times.
Thus, human resource executives will need to rise to the simultaneous challenges of: making the case for greater executive involvement in leadership development by framing these activities within the organization's strategic mission and vision, and ensuring that leadership-development programs are adequately designed and personnel are effectively trained to deliver the coordinated approach required to meet both current pressing needs and also to develop the next generation of leaders for their organizations.
Full results from the Duke Executive Leadership Survey can be found on the
Fuqua/Coach K Center on Leadership & Ethics
Web site.
James Emery, Ph.D. is research director, Sim Sitkin, Ph.D. is faculty director, and Sanyin Siang is managing director of Duke University's Fuqua School of Business/Coach K Center on Leadership Ethics.
June 2, 2009 Copyright 2009© LRP Publications
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