Leadership

Topic 9: Measuring
Leadership
Performance
*Defining Leadership Success

*Performance Measurement

*Performance Appraisals

*Performance–related Issues
*At its most basic level, success can be defined in terms of
the achievement and accomplishment of predetermined
goals and objectives.

*If a distinction between managers and leaders exists, then

a leader's success should be measured by those skills that
differentiate a leader from a manager, namely his or her
ability to:
*innovate and initiate
*drive change in pursuit of a vision
*challenge the status quo
 *inspire and motivate
*align staff to the organisation's goals and objectives.

*In addition, we should consider a leader's success in terms

of the roles we have assigned to them:
*Strategists
*Motivators
*Communicators
*decision makers
*ethical agents
*change drivers
Success Criteria
*Success criteria should reflect the knowledge, skills and
abilities of the individual.
*In other words, developing success criteria for leaders is
contingent upon identifying the appropriate
competencies.
*According to Weiler and Schoonover (2001),
competencies can be classed into three categories:
*Technical
*Core Non-Technical ("People skills")
*Leadership
Success Criteria
*The challenge is to make success criteria realistic,
observable, measurable and attainable.
* They should reflect the leader's level of knowledge,
skills and abilities.
*Success criteria need to be designed to facilitate success,
not disable it.
The Role of Competencies
*Success criteria should reflect the knowledge, skills and
abilities of the individual.
*In other words, developing success criteria for leaders is
contingent upon identifying the appropriate
competencies.
*According to Weiler and Schoonover (2001),
competencies can be classed into three categories:
1. Technical
2. Core Non-Technical ("People skills")
3. Leadership
 12 Core
Competencies
for Leaders
(Nicholas
Weiler)
*Typically, a performance management process or system is
designed to monitor, manage and improve an employee's
performance or level of effectiveness within the
organisation.
*It will entail creating a series of processes that aim to
assess and evaluate issues relating to the organisation's
human resources such as:
*new employee selection criteria
*job design
*how people get their work done
*reward and other incentive structures
*whether work practices are effective.
Financial Performance Measures
*Financial measures of performance are often
preferred by boards of directors because they are
perceived as being unambiguous, tangible and based
on tried and tested accounting and finance
principles.
*For the purposes here, 'financial performance
measures' refer to those objective measures that
appear in the organisation's monthly, quarterly or
end-of-year financial reports.
*In other words, they are accounting-based. In
contrast, the term 'non-financial performance
measures' is used to encompass both quantitative
and qualitative performance measures that move
beyond dollars and cents.
Non - Financial Performance Measures
*Non-financial measures are vital for the evaluation of a
leader's performance because they attempt to capture
more than just the dollar value.
*These measures recognise the impact on performance of
quality initiatives, customer expectations, flexibility,
relations with staff etc.
*The issue with non-financial measures of performance is
that many view these indices as being:
*difficult to measure accurately
*susceptible to potential evaluation biases
*time-consuming to measure.
Broad versus Narrow Performance Measures
*In leadership, due to the nature of senior positions it
is common to measure performance using broad
measures.
*Performance measures such as organisational
profitability and share price can lead to problems
associated with 'controllability'.
*Whilst narrow measures of performance mitigate
the problem of 'uncontrollability' by targeting
individual performance, they can also activate the
'interdependency' and 'alignment'
problems.
Selecting Performance Measures
*Select a combination of financial, non-financial,
broad and narrow measures on a job-by-job basis.
*Irrespective of which measures are adopted, a sound
performance measurement system should possess
three qualities:
* It must be technically valid.
* It must be functional.
* It must be legitimate (i.e. accepted by those
affected within the organisation).
Gathering the data
*Gathering both objective and subjective non-financial
data on leaders can sometimes be problematic.
*One reason for this is that established performance
management systems tend to be based on the superior-
subordinate relationship.
*We have emphasised the relationship that exists
between the leader and his or her followers. Therefore,
the way to judge a leader's success is through the
followers' ratings of effectiveness.
*Followers are asked to rate their level of effectiveness of
the leader in terms of their own feelings or levels of
satisfaction, motivation, and commitment towards the
organisation and the leader.
Conducting a performance appraisal
*Typically, performance appraisals serve two purposes:
developmental and evaluative.
*The evaluative purposes of performance appraisal will
generally encompass decisions associated with pay,
promotion (or demotion), retrenchment and/or
termination.
*From a developmental perspective, the results of a well-
designed performance appraisal can provide organisations
with insights into where to and how to:
*improve performance
*identify and develop potential
*provide feedback
*Communicate
*identify management and leader development
opportunities.
*For high-level leaders, the challenge of the performance
management system is to ensure that:
*Key leadership skills are included in the appraisal process.
*Opportunities to practice leadership skills are presented.
*Leadership development opportunities are identified and
actioned.
*The correct motivational goals and rewards are noted for
the individual.
360- Degree Feedback
Performance – related issues
Remuneration
Kramar et al. (1997: 431) suggest that organisations
generally seek four outcomes from performance-based
reward structures:
*A clear focus and direction for employees.
*A mechanism to provide high performing employees
with recognition for their contributions.
*Processes to enable employees to identify with, and
share in, the success of the organisation.
*An ability to control fixed remuneration costs by linking
variable payments with performance.
Succession planning & leadership development
*It is about grooming the next generation of leaders
within an organisation.
* It is inextricably linked with leadership development
because it prompts current leaders to provide learning
and development opportunities for themselves and for
their successors.
*This means that succession planning is now a desired
skill for a leader to have, and a success criteria or
competency that they are measured against.
* A leader's ability to delegate leadership tasks, provide
opportunities to practice leadership skills, and coach and
mentor inexperienced but talented potential leaders,
contributes to his or her personal success as a leader.