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Assessing Leadership and Measuring Its Effects 4 Chapter Assessing Leadership and Measuring Its Effects “Only 8% of Fortune 1000 executive directors rate their leadership capacity as excellent, while 47% rated their leadership capacity as fair to poor.” ~The Conference Board

Leadership Literature Academic tradition Consists of articles that use data and statistical techniques to make inferences about effective leadership. Troubadour tradition Books and articles usually consisting of opinions. 4-3 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Leadership Research Many times research findings seem contrary to conventional wisdom about leadership. It is difficult to provide practitioners with timely, easily digestible, research-grounded advice on how to effectively lead others. High quality leadership research is difficult, expensive, and time consuming to conduct. 4-4 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Leadership Research (continued) Practice-research gap – the tension between discovering the “truth” about a leadership question and being able to apply what is learned. “Real” leaders rarely study findings of leadership research, turning instead to popular books and articles. This information: Appears to provide timely answers to their practical concerns, however this information is rarely based on sound research. Oversimplifies the complexities of the leadership process. Many times offers bad advice. 4-5 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Assessing Leadership Personal opinions about leadership effectiveness can vary substantially across individuals. Putting the wrong people into key leadership positions can literally cost stock holders billions of dollars and lead to organizational ruin. Many of the most commonly used leadership hiring techniques (application blanks, reference checks, and unstructured interviews) are also the least valid. 4-6 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Best Practices in Assessing Leadership Potential Determine the leadership level of the position. Build a competency model. Use a multiple hurdles approach. “The best predictor of future leadership behavior is past leadership behavior in similar circumstances.” Personnel Decisions International 4-7 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Multiple Hurdles Approach Figure 4-2 4-8 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Multiple Hurdles Approach (continued) Use most inexpensive assessment techniques first. Use Internet or paper-and-pencil measures of leadership effectiveness. Interview the remaining talent pool. Structural interviews Unstructured interviews Put the top three candidates through an assessment center. 4-9 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Assessment Center Simulations In-Basket exercise Work simulation that requires candidate to do actual “paperwork.” Role-Play simulations Actors are trained assessors who observe and rate the performance of each candidate. 4-10 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Making Sense of the Process Many times having a clearly defined competency model, a biographical form, and structural interview questions linked to the model will do a fairly good job of improving the odds of hiring good leaders. Research is the only way to determine which assessment techniques are the most valid for which leadership positions. Organizations will continue to experience shortfall in leadership talent as long as they continue to use assessment techniques that essentially result in little more than random selection. 4-11 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Measuring the Effects of Leadership Just as various techniques are used to assess leaders, there are also various ways to measure their effects on subordinates and organizations. When making judgment about the relative success of a leader we are examining the consequences or impact of these behaviors and not the behaviors per se. 4-12 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Common Measures of Successful and Unsuccessful Leadership Superiors’ effectiveness and performance ratings. Subordinates’ ratings of satisfaction, organizational climate, morale, motivation, and leadership effectiveness. Unit performance indices. 4-13 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Best Practices in Measuring Leadership Success Ratings by superiors and subordinates generally yield useful information about a leader’s effectiveness. Multiple measures often yield the best information about leadership success. Practitioners need to think critically about how their behavior affects the measures used to judge leadership success. Practitioners need to be aware of leadership success measures being biased. 4-14 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Methodologies Used to Study Leadership The Qualitative Approach The most common qualitative approach is the case study. Quantitative Approaches Correlational studies Experiments 4-15 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Some Common and Uncommon Variations of Leadership Studies Table 4-5 4-16 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Maxims and Theories of Leadership Maxims are personal opinions that can give leaders valuable advice about leadership. A leadership theory is a framework for conceptualizing relationships between variables and guiding research toward a fuller understanding of phenomena. 4-17 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Maxims and Theories of Leadership (continued) Theories are central to scientific research due to: Public predictions of how leadership variables are interrelated. The systematic gathering and analysis of data. Peer review of results. Although both leadership maxims and theories are useful for understanding leadership situations, in general only leadership theories add to the body of knowledge concerning the science of leadership and help the development of universal laws of leadership. 4-18 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Summary Organizations can and do use a number of techniques to assess the values, personality, intelligence, and behaviors for any applicant pool. Superiors’ ratings, subordinates’ ratings, and unit performance measures can many times paint different pictures about the relative success of a leader. Case studies have the advantage of helping practitioners better understand the context in which a leader acts. 4-19 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Summary (continued) Correlational studies have the advantage of using larger sample sizes and describe the statistical relationships between the results of different assessment techniques and success measures. Leadership experiments do yield valuable information about the cause and effect relationships between independent and dependent variables. Maxims may represent valid advice, but they are ultimately no more than personal opinion. Theories are a collection of testable predictions about the relationships between certain variables. 4-20 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.