How Leadership Affects Employee Performance?

By  //  September 12, 2023

No matter what style a leader adopts, trust is the main or we can say a critical factor that plays a part in employee performance.

Studies have shown that there is a strong relationship between trust and employee behavior. When a leader trusts his employees, then automatically, the employee is going to perform well and tend to stay with the organization long-term. So yes, we can say there is a very strong relationship between leadership and employee performance. 

As we all know there are many leadership approaches that suit different situations. So it is very important that managers have a good understanding of these styles or approaches.

As it is said by John Quincy Adams:

“If your actions inspire others to dream more, learn more, do more, and become more, you are a leader”.

Now it is your job to evaluate whether or not you are an effective leader. 

Did you know?

According to a survey it was found out that;

There are 79% of the employees who quit after not getting sufficient appreciation from their managers.

69% of the millennials have this concern that their workplace is not helping them develop leadership skills.

Only 15% of the boards of directors are women.

83% of the companies claimed that it is very difficult to develop leaders.

Currently, leadership qualities are viewed by 48% of leaders in the current organizations, and this percentage rose from 34%.

Moreover, a recent survey claimed that 55% of the CEOs have faced difficulties or challenges in developing the next generation of leaders.

63% of millennials believe they are not given proper guidance or training to become good leaders. Effective leadership training can really boost performance of entire organization. 

60% of leaders feel worn out after the end of the day which can be a sign of burnout.

How can Leaders Affect Employee Performance?

The following ways can enable a leader to put good influence on an employee and thus increase employee performance:

Never tell a lie or give false statements.

Listening to what employees have to say.

Promoting an environment that is not only productive but positive as well.

Following through on commitments.

Ways for Leaders to Affect Employee Performance:

Below are some ways to help a leader put a good influence on employee performance:

Providing proper training:

One way to improve employee performance is to take out the time and provide employees with proper job skills training whenever required. This will result in more educated and productive staff. So if a leader tries to continue education among employees, whether through adequate training or inviting cultural intelligence speakers, then it will show that this leader is willing to rule out the best performance in the employees. 

Increasing productivity:

If a leader has poor planning skills then it can become very hard for the employees to perform well or deliver something on time. And this will ultimately decrease productivity as the employees are less motivated and their morale is down. But if a leader is sensible enough to delegate tasks to his team and motivate them enough to perform well then this will increase their productivity. 

Getting feedback from employees:

Feedback according to us is a very convenient way for any leader to understand what the team thinks of him or wants from him. And effective leaders know to structure feedback in such a way that only focuses on how to improve performance and not dwell on weaknesses. 

Ways to Evaluate the Impact on Employee Performance:

Below are some of the very efficient ways to evaluate the impact on employee performance:

Execution level

Quality of whatever the work done

Creativity level

Extent of consistent improvement

Feedback from peers and customers

Number of sales revenue generated

Responsiveness to feedback


Impact of Different Leadership Styles on Employee Performance:

Studies have shown that each of these leadership styles has a unique impact on employee performance. So below are the different leadership styles and how they are useful in employee performance.

The Autocratic Approach:

This approach is quite useful for driving short-term performance. Researchers have claimed that in all such situations where the team consists of new employees, this type of leadership style can be of great help in finding solutions to different business challenges. 

The Democratic Approach:

This is another approach that is quite effective not only for the short but long term as well. With this approach where feedback is taken from employees, higher productivity along with higher morale can be achieved.

The Participative Approach:

This approach is less effective in the short term and is more suitable in the long term and puts a positive impact on employee performance. This style has led to a positive work environment where only creativity is encouraged and no negative comments or thoughts are promoted. Everybody gets to participate and share their ideas and this puts a good effect on employee performance.

Concluding Remarks:

In the end, we would say that leaders are regarded as an agent of change as they are responsible for directing subordinates in making different decisions. With that, they also have to pay attention to what their employees are up to and create a comfortable working environment for them.

If a leader manages to create a confident and motivated team then this is the biggest achievement of that leader. And to be able to increase employee performance, there must be a stable level of trust between leaders and subordinates. Therefore, a leader considers his employees a valuable asset of the organization. As soon as the employee starts to feel he is appreciated, his morale will increase and this will eventually improve employee performance.