How do we assess and reward leaders? By Clive Wright, Director, Hyperion HR

I have been doing some work with the new Centre for Leadership Innovation (CLI) that is linked to the University of Bedfordshire.  We have been looking at the organizational issues of leadership, how companies assess whether individuals are effective leaders and how they should be rewarded.

Organizations spend significant amounts on courses and programmes to develop leadership skills, but there seems to be little evidence that they have an objective measure of the success of individual leadership performance as a result of the programmes.  Many ask for self assessment on whether the course or programme worked, some ask the direct reports to the leader to assess his or her capabilities and others use general employee surveys as a yardstick of success. 

All of these are useful indicators but they are not effective, objective measures of leadership capabilities.  

 It is now recognised quite widely that leadership is important at all levels in the organization – distributed leadership, not just at the executive level.  Which makes a clear understanding of what is expected from leaders and what they need to deliver to be classed as successful even more important.

There is evidence that many organizations are “over layered”, that is that they have too many levels of management which can lead to conflict, politics, poor decision making and unfulfilling jobs; to say nothing of the waste of money on unnecessary jobs.  This leads to organizations that are over-managed but under-led with too many layers of “management”.   In these cases no amount of training or development will result in effective leaders.  Research suggests that seven or, at the most, eight levels of accountability are appropriate in an organization. 

From the research that I have carried out there seems to be little effort in identifying objective measures to assess the success of leaders.  Subjective, sure, 360 assessment, feedback from followers, employee surveys, etc. but no identified measures of what the outcomes of successful leadership need to be in organizations.  Yet they are spending significant amounts developing leaders based on a crude assessment of what is needed.

Fortunately there is some evidence that examples of leadership measures are being developed in industry.  Barclays UK Retail Bank found that their managers were performing well in a technical capacity but that they needed to demonstrate increased leadership capability.  They developed a series of modular experiential learning events to address this issue.  They found that the events ‘drastically improved’ the participants’ day-to-day leadership performance and cited an increase in team productivity and an improvement in team engagement as the measures. 

So with a lack of any other measures linked to leadership performance management generally still focuses on the business results aspects of management rather than on leadership skills; and then we pay accordingly.  Will this help develop the new leaders that are needed as the Baby Boomers retire?  Is this how it should be?  Answers on a postcard (or by commenting below) please.

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