What employees think of a leader impacts the bottom line

According to a new study in the Journal of Organizational Behavior (May 2017), if a leader wants to ensure high performance, they need to put more of their effort in to developing positive relationships with ‘followers’ (employees).

Ryan Gottfredson and Herman Aguinis assessed 35 meta-analyses (amounting to 3,327 studies and nearly 1,000,000 individual behaviours). They looked at the four main leadership behaviours which are said to impact employee performance and commitment:

  • Consideration – the extent to which a leader shows respect, support and concern for others
  • Initiating structure – how a leader structures and organises roles and activities
  • Contingent rewards – how a leader uses reward based on performance, i.e. ‘give and take’
  • Transformational leadership – how leaders influence and inspire others to go above and beyond what’s expected

The research found that employee performance was less influenced directly by the four behaviours above and more influenced by the perception that employees had of the leader.

The researchers also found that a positive increase of one standard deviation in the relationship between a leader and employees amounted to, on average per sales representative, an $85 000 increase in sales volume, 5.60 percent increase in annual sales growth, 1.50 percent increase in sales volume from new accounts, 2.86 percent increase in market share, and 3.59 more new products sold, all in a given calendar year.

This finding has implications for all organisations, regardless of sector. The quality of relationships that a leader has with their employees impacts performance across a number of facets, not just financial.

Therefore, to improve performance, a leader needs to engage in those behaviours which develop positive relationships with employees and so, improves perception. The more this is done, the more likely it is that the leader is able to enhance performance.


This underlines, once again, the importance of leaders showing respect for and building trust with all employees.

So, heere are five simple ways leaders can build more positive relationships with employees:-

1. First, find out what people think of you already: Get feedback, ideally in the form of 360-degree feedback. This will give you a really good baseline to work from, in understanding your employees’ perceptions of you.

2. Be human: Don’t talk or write like a robot, which means avoid corporate speak. Smile. Say “hello” to people. Notice things about the people who work for you, their likes and dislikes. Take an interest in your people. Get to know them.

3. Praise in public, criticise in private: That means not exploding at someone in front of their colleagues (in fact, try not to explode at all). This is a biggie – don’t underestimate the impact of having negative or heated conversations in front of other members of staff Give ample praise for a job well done. Make sure the right people get the credit.

4. Put yourself in their shoes: It’s likely you weren’t always in the leadership position. Try and remember what that was like when you first started out. Remember the things that worried you, that made you happy. Ask yourself, “how would I feel if that were me?” if you’ve announced a change that impacts a particular person. Spend time on the ‘shop floor’ doing

5. Listen: This is where being mindful comes in useful. The more mindful you are, the more you’ll really listen to not only what the person is saying but also what they’re not saying (non-verbal cues). Paraphrase what you’ve heard to show whether you’ve understood or not. Management By Walking Around (MBWA) is another great way to ‘listen’ to the overall team climate.

How do you build trust and respect with your staff? What have you seen other leaders do to create positive employee relationships? Why not share your experience in the comments section so others can benefit?

Did you find this post helpful? I’d love to know, so Tweet me, or drop me a note on LinkedIn. If you have any colleagues that you feel should read this, too, please share it with them. I’d really appreciate it.

I also have a monthly newsletter which is a compilation of blog posts, helpful research, and reviews of books and podcasts – all aimed at helping managers and leaders become more confident in handling a range of workplace issues. You can subscribe here -> SUBSCRIBE

If you liked this post, you might also like these:




Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.