How to fit the leadership dimension in individual performance management?  

Leadership Overview

Leadership is defined more by practice than by a set explanation. Leadership capabilities are difficult to measure, but easy to observe. Organizations can enhance their individual performance management processes, by including leadership dimension.

How to fit the leadership dimension in individual performance management?

Organizations can include the leadership dimensions in individual performance management processes, by defining leadership competencies and do a separate performance appraisal around leadership capabilities.

Few questions, which an organization has to face, are-

  • How to measure the Leadership, because of its soft nature?
  • Is it possible to quantify the level of leadership capability of an individual?
  • How does one have a performance feedback session on leadership?

It is generally easy to rate an individual on the level of goals achieved as most of it is measurable. However, when it comes to demonstrating leadership competencies, it becomes a soft-ground. I can have convincing basis to rate my employee on the goals, but how do I measure and discuss his level of team-work? as there is not mathematical basis for that. Most of the inputs on the leadership competencies are based upon day-to-day observations and feedback from people.

Here is what many organizations do to include leadership competencies as part of their performance management process-

Define the leadership competencies

An organization should clearly define for each role on the kind and level of leadership competencies required. This includes-

  • Kind- What is the competency and what does it mean.
  • Level- What is the level of intensity of that competency for that role. For example, the leadership competency of 'thinking strategically' will have different connotations for the head of business vs. sales manager.

More descriptive you can be on the competencies, better it is. You can provide examples and FAQs along with the competency list.

Communicate the competency and its relevance to the goals of the individual

The leadership competencies should be now communicated by the manager to the employee. This should include-

  • Why this competency is needed for the role?
  • How different goals in the goal-sheet will need to exhibit the leadership competencies. For example, if your goal is to complete a big program, you will need to demonstrate competencies like leading diverse teams, driving results etc...
  • What will define the competencies being demonstrated more than expected or less than expected? The manager needs to explain to the employee with examples.

Give ongoing feedback

Once the ground is set on defining expectations around leadership, one needs to ensure that an employee gets regular feedback on how he is working. The reason is that unlike goals, where it’s easy to synch-up with the employee on his performance, it’s difficult for leadership. For example, in your periodic performance appraisal feedback session (say six-months or a year), you may state that your employee needs to improve upon team-work, and employee might be carrying a self-perception that he is one of the best team-players around. Therefore, one needs to make sure that an employee does not need to wait for the feedback session to understand his performance on leadership areas.

Secondly, feedback given closer to the observation holds much better retention and understanding. For example, let’s say that you observe that your employee has chaired a meeting, in which he has not been listening well. The good online feedback will be that you share this observation with him immediately after the meeting. This will help because, you can point to the exact observation, with all specific details, and it will be within recall of your employee as well.

The same applies on positive feedback (feedback does not mean constructive feedback only). If you see a good demonstration of leadership behavior, give it close to the incident.

Focus on key areas of improvement and strength

There is a long list of competencies, and one should focus the feedback and improvement in top 5 competencies which are most crucial for the employee and his role, and where the employee is either weak or strong.

Do a separate rating for the leadership

Every organization has a different way to appraise their people on leadership. Our recommendation will be to have a separate rating for leadership and separate for the goals. This gives a much clearer picture to an employee and it’s easier to manage.

Link bonuses to goals and growth to leadership performance is of a strong belief that while one can get the performance bonuses for the goals achieved for a given period of time, the growth part (salary raises and promotions) should be linked to the leadership. This is because as one rises in an organization, the leadership capability becomes more critical. Therefore the leadership filter needs to be applied. This point may not be as controversial as it sounds. I have generally seen high goal achievers to be good leaders as well, especially as we move up the ladder.