Management Development ForumVol. 1 - No. 2 (98)
Leadership Competency
Ken Parry
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Ken Parry

This article acknowledges that the changing nature of management strategy in recent years has posed challenges for the management of organizations to maintain the motivation and commitment of the workforce, which can be framed as leadership challenges. Consequently, a secondary challenge of management is to generate leadership competency throughout organizations, which in turn poses a challenge for the human resource management role within organizations. Some suggestions are posited as to how these human resource management challenges can be overcome.


The changing nature of organizational management strategy has posed many challenges for the management of the employment relationship (human resource management). Indeed, the employer-employee relationship itself has changed dramatically in recent years, and will continue to change greatly in the near future. The impact of these changes has been seen partly in the lowered levels of motivation and commitment of many members of the workforce. These outcomes have posed challenges for the leadership of the workforce, whether that workforce mirrors the traditional employment relationship or not. Such challenges include the maintenance of motivation and commitment within the workforce, and the generation of leadership competency within organizations.

The resolution of these motivational and commitment challenges requires an appreciation of the conceptual underpinnings of leadership and its manifestation in the workplace. Further, it requires a greater degree of translation of these concepts into practical human resource management (HRM) competencies and criteria. Finally, it requires an operationalization of these leadership criteria within HRM functions such as job analysis, recruitment, selection, training, development, career management, performance appraisal, and succession planning. This article will examine these issues, and draw conclusions accordingly. In particular, it will be argued here that the HRM functions in organizations have an important role to play in helping all managers and employees learn to become better leaders.

Contemporary Challenges

The contemporary nature of work and employment poses many challenges for the human resource manager. The objective of this article is to discuss the challenges for the motivation, commitment, and leadership of employees. Within these parameters, there are two motivational challenges presented by the environment of work in contemporary society.

Maintaining Motivation

The first challenge is to maintain employee motivation and commitment in the face of rising job insecurity and worker alienation. Rising job insecurity and worker alienation are two identifiable outcomes of management trends that have been well documented in the literature. These management trends include the flattening of organizational hierarchies via the removal of layers of middle management, and the downsizing of the total number of employees. In turn, these trends have created a number of responses from within organizations as they manage the downsizing and delayering strategies. These responses are both intentional and unintentional, and include the outsourcing of certain functions, altered career paths for employees, reduced career duration within organizations, self-responsibility for careers, increased rates of employee turnover, and greater use of employment contracts. The work of scholars such as Cascio (1995), Arthur (1994), Littler et al. (1994) and others has provided these assertions.

These trends, and their responses, have generated a number of outcomes in the perceptions, attitude, motivation, commitment, and behavior of workers. When assessed collectively, these outcomes amount to an increased sense of job insecurity and worker alienation from within large sections of the workforce. In particular, there is considerable organizational dysfunction caused by downsizing. For example, some characterize downsizing as a violation of an implicit psychological contract between employer and employee.

In addition, former U.S. Secretary of Labor Robert Reich has described the higher incomes of top executives, coupled with the un- and underemployment of American employees, as a violation of another implicit contract—that when companies do better, the employees do better. The situation as it now stands is that as companies do better, employees are fired and consequently are worse off. Indeed, this outcome clashes with the old utilitarian philosophy that when all the individual citizens do better, the country does better. American society is the worse for these trends. All of this has led to studies of a growing underclass in society, along with the increasing division between the haves and the have nots. Such outcomes are not unique to the U.S. These scenarios are being mapped out in most developed countries.

Clearly, such outcomes will provide a management challenge to maintain employee motivation and commitment. Moreover, increases in the motivation and commitment of followers are essential outcomes of effective leadership. Therefore, inherent within this article is the contention that overcoming this challenge is a leadership implication for management as much as it has implications for the other human resource management functions of organizations. It has been proposed by some authors that the modern strategic fad of “downsizing” is characteristically inconsistent with the notion of leadership. First, a strategy of workforce reduction destroys the notion of the exchange relationship between employer and employee that forms the basis of a leader-follower relationship. Second, such a strategy deindividualizes the leader-follower relationship. People perceive that they are just “numbers,” not individuals. Third, downsizing is perceived by employees as leaders modeling the “easy way out” to achieve quick returns. They tend to follow that lead. Fourth, to employees, downsizing represents a lack of vision by the people they look to for leadership.

Generating Leadership Competency

The generation of leadership competency throughout organizations is a second challenge posed by the contemporary nature of organizations. Traditionally, leadership has been investigated at the upper regions of organizational hierarchies. It has been investigated as a competency of management or senior management. “Leader” status has traditionally been determined by an individual’s status as manager, CEO, or some other organizational rank. The folly of using this limited categorization of leadership has also been identified within the leadership literature. Instead, it has been concluded persuasively by Hunt (1991), among others, that leadership is a process that occurs within organizations, and is not the characteristic of a certain rank. Therefore, leadership is something that can be exhibited by anyone in an organization, irrespective of their rank or level.

Consequently, the second human resource management challenge is to generate leadership competency throughout the depth and breadth of organizational structures, not just at the top of the organizational hierarchy. This second challenge is related to the first in that downsized and delayered organizations have reduced depth and breadth through which leadership competency has to be generated. That is, there are fewer levels of management and fewer employees to provide leadership. While this may indicate that the challenge is reduced in the smaller organizations, in reality this is not the case. The remaining employees in downsized organizations have more ambiguous job descriptions and heightened uncertainty about the future. These characteristics increase the leadership challenge.

The necessity of generating leadership competency throughout organizations has been identified by Avolio (1996). The competitive advantage to be gained through organizational leadership has been proposed by leadership researchers. Consequently, it can be proposed that a source of sustained competitive advantage for organizations is to have leadership competence throughout the depth and breadth of organizations. The generation of such competence is a challenge for the management of the employment relationship.

Impact on HRM Functions

A Primary Impact

If the content of HRM texts and HRM degree majors are yardsticks by which to determine the range of HRM functions, then motivation and leadership seem to be included under the umbrella heading of “human resource management.” The challenge of maintaining employee motivation and commitment in the face of rising job insecurity and worker alienation can be viewed as a leadership challenge. Therefore, the leadership challenge of maintaining employee motivation and commitment is very much a challenge for the HRM role in organizations.

In a major review of the leadership literature, Bass (1990a) concluded that effective leadership results in improved motivation and commitment from followers, and also results in beneficial changes in the behavior of followers. Therefore, there is a case to be made that the maintenance of employee commitment and motivation is a leadership challenge. Because this challenge needs to be addressed throughout organizations, the secondary impact of these challenges on human resource management results in changes in the performance of a number of the traditional “personnel” management functions.

A Secondary Impact

The challenge of generating leadership competency throughout organizations has ramifications for a number of the personnel management functions within organizations. Job analysis, selection, recruitment, training, appraisal, and succession planning are all affected by the need to overcome such a challenge.

A key role of people in leadership positions is to develop the range of competencies possessed by followers. This developmental role is axiomatic of leadership. There is considerable evidence to suggest that people of all ages and levels of experience can learn, develop, and train to be better leaders (for example, see Avolio, 1996). More particularly, empirical research has shown that transformational leadership can be taught and learned. Leadership that is able to transform the motivations, attitudes, and behaviors of followers to higher, less self-serving levels can be called transformational leadership. This is in contrast to transactional leadership which emphasizes the transactional relationship between manager and subordinate, and which results in less satisfaction and leader effectiveness than does transformational leadership.

The HRM literature has been careful to distinguish between skill training and developmental learning as two outcomes of human resource management. The fact that “training” and “development” are usually cited together highlights this dual outcome. In particular, the leadership literature has been careful to distinguish between leadership skills which can be trained for, on the one hand, and leadership developmental experiences which can be acquired over time, on the other hand.

HRM Implications of Leadership Skill Training

Yukl (1994) justified a taxonomy of 14 managerial practices that are partly characteristic of effective leaders. Those practices are represented in Table 1.

Table 1
Yukl’s taxonomy of managerial practices
planning and organizing
clarifying roles and objectives
motivating and inspiring
developing and mentoring
managing conflict and team-building
Source: Yukl (1994).

There is a wealth of literature on how these practices can be taught and learned (Wright, 1996). For example, some textbooks emphasize the development of management skills consistent with Yukl’s taxonomy. A more specifically skill-based approach to leadership is provided from England by Wright and Taylor (1994). They identified a range of leadership skills that can be practiced and acquired, in other words, trained for. Wright and Taylor’s leadership skills include observational skills, diagnostic skills, perceptual skills, verbal skills, nonverbal skills, and interactive skills, all of which can and have been taught and trained successfully. Included within Wright and Taylor’s leadership skills training program are the necessary stages of exposition, preparation, observation, activity, debriefing, reflection, and interpretation. A minimum two-day program is provided for each skill set.

Bass and Avolio (1994) have a two-stage Full Range Leadership Development course to generate transformational leadership competencies. This program involves:
1. pre-testing of leadership competence,
2. a three-day activity-based intervention,
3. a three-month implementation of a self-developmental program,
4. a post-test of change in leadership competence, and
5. another activity-based three-day intervention.
The success of this program has been verified empirically by Avolio and Bass.

Consequently, it can be seen that the generation of leadership competency can be translated into a range of skills that can be acquired. More particularly, what is needed now is some interpretation of how these skills can be translated into the traditional personnel management functions of HRM. Parry (1996a, b) has posited some suggestions as to how job analysis, description, specification, and enrichment can incorporate the competencies of effective leadership.

These personnel functions offer the chance to breed a transformational leadership culture throughout the organization. Recruits are likely to be attracted to an organization whose senior management is transformational and enjoys a public image of confident, successful, optimistic, dynamic leadership. In addition, Bass (1990) has found that prospects are likely to be attracted by interview experiences with other members of management who exhibit the transformational leadership characteristic of individualized consideration.


Internal candidates can be assessed via a questionnaire administered to the candidates’ peers or subordinates. Examples of such questionnaires are Bass and Avolio’s Multifactor Leadership Questionnaire (MLQ), Posner and Kouzes’ Leader Practices Inventory (LPI), and Yukl’s Influence Behavior Questionnaire (IBQ). Selection interviews and other qualitative assessments could concentrate on aspects of leadership skill. For example, Sashkin (1988) found that visionary and inspirational leaders are characterized by energy, self-confidence, determination, enthusiasm, and verbal skills. Individually considerate leaders are characterized by coaching skills, a preference for personal face-to-face communication, and a willingness to delegate (Bass and Avolio, 1994). Identification of these competencies can assist with selection decision making. Organizations should identify the sort of intellectual stimulation required in their potential leaders. Categories are innovation (for example, in marketing consultancies), creativity (for example, in research and development organizations), and mathematical (for example, in engineering firms). Identification of these intellectual stimulation skills can assist with selection decision making.

Training, Development, Counseling

Feedback from questionnaires and interviews could be used to identify areas of needed training, developmental, and counseling effort. An organizational skill is to have adequate and appropriate training for its members. Training should be developmental in its style. Trainers can be individually considerate by helping trainees to develop their own leadership goals, including strategies by which they will achieve those goals. Progress toward achievement of those goals should be monitored, as per conventional goal-setting theory.

Job Design

It is true that people need to conform to jobs in the organization. It is also increasingly true that jobs can be changed to accommodate people. Job redesign is an effective way to alter people’s motivation and commitment. In an effort to generate leadership competence throughout an organization, Parry (1996b) has suggested that jobs could be designed in the following ways:

Job Description

* build incrementally greater challenges into the job tasks.
* delegate increasing responsibility and accountability into duties.
* give the opportunity to diagnose organizational problems, and propose solutions to them.
* incorporate responsibility for the induction, development, and mentoring of junior colleagues.
* have a job title which reflects the responsibility and challenge that the person has been given.
* list a large number of people who report to the position and with whom the position interacts.
* list problem-solving responsibilities that may be unique as well as routine, and which are non-specific about the degree of supervisory guidance or assistance that is required, and about which there are few set procedures.
* incorporate the decisions that the person can make themselves, without reference to a superior.
* specify a career path for the incumbent.

Job Specification

* incorporate skills such as public speaking (avoid generalizations such as “communication skills”), risk taking, management skills, team building skills.
* incorporate abilities such as delegation and ability to explain concepts.
* incorporate knowledge requirements including technical knowledge, motivational knowledge.
* identify personal qualities including enthusiasm for work, abstract thinking, empathy with people’s concerns, an ethical approach to work, sincerity.
* nominate special requirements such as availability to subordinates, professional networking ability, continual ongoing training and re-skilling, conformity between behavior and espoused values.
* specify the training requirements for the job. They must reflect the description and specification for the job in question.

Performance Criteria

* measure performance in terms of managerial criteria such as money value, numbers produced, quantity processed, and also
* measure performance in terms of impact upon the followers in the organization, for example improved motivation, commitment, perceptions. These can all be objectively and quantitatively measured.

Job Enrichment

Job enrichment is a concept in which jobs are redesigned to make them more motivating to people. Motivation is a key element of effective leadership, and there are some important parallels between job enrichment principles and leadership principles. The five core job characteristics of job enrichment are skill variety, task identity, task significance, autonomy, and feedback. Implicit within job enrichment is a visionary characteristic and a developmental characteristic. Visionary behavior and a developmental emphasis are characteristic of effective leadership.

Within the above job design strategy, the word “leadership” is not mentioned. It is too general and widely-interpreted a term to use in job descriptions and specifications. Instead, “leadership” can be broken down into more identifiable and specific components. Moreover, these leadership criteria can be used for other personnel management functions such as performance appraisal, performance management, and succession planning.

As a result of the above job redesign, leadership skills and the predisposition to adopt leadership skills can be reflected in job descriptions and specifications. Human resource managers can build leadership into the specification of the expectations of people in the organization. In this way, leadership is no longer just some abstract concept for the human resource people or the trainer, but an essential component of the management of the employment relationship.

HRM Implications of Leadership Developmental Experiences

There are a number of HRM implications associated with the creation of leadership developmental experiences within organizations. Avolio and Gibbons (1988) identified seven developmental factors which, when present, appear to result in transformational leadership. Moreover, transformational leadership has been shown to be a particularly persuasive explanation of organizational leadership. Three of the factors relate to the leader’s family situation, upbringing, and personality. Consequently, they are beyond the scope of the HRM function in organizations to manage.

However, the fourth factor concerns previous leadership opportunities which transformational leaders have had. The HRM function in organizations can build opportunities for leadership experiences into the career paths of individuals. Such experiences include membership in committees and decision-making groups, chairing committees, active membership in professional bodies, and participation at conferences. Factors five and six concern a determination to engage in developmental work later in life. These factors contribute to the technical skill and expertise which transformational leaders must have.

Moreover, Avolio and Gibbons’ (1988) seventh factor is that the leader will view all experiences as learning experiences. It has been shown that effective leaders are those who are learning continuously. Therefore, there is an onus on the HRM function in organizations to provide learning opportunities for potential leaders. Learning can be obtained sequentially in clearly-defined parcels via courses and university degrees. It can also come from a learning culture at work that values and encourages learning from experience. Such a culture is one where differences are valued, diversity is optimized, assumptions are challenged and changed when necessary, and the future is considered and debated (Avolio, 1996).

Avolio (1996) has asserted also that leadership development must be directed at existing managers as well as the managers of the future. In other words, leadership development experiences can be enjoyed by the managers who represent the tried-and-true status quo of an organization, as well as the people who are at the earlier stages of their careers. This is a refreshing notion in that it runs counter to the prevailing contemporary logic that shorter careers and “younger” people are better acquisitions and offer better potential for development.

The human resource management function has an obligation to build into the job description of leaders an expectation that they develop the leadership potential of their subordinates. Put another way, leaders should develop other leaders. This can be achieved partly through mentoring and role modeling. Indeed, Avolio has suggested that each manager’s performance review could address how well he or she has developed the potential of employees, and that a portion of the manager’s variable remuneration is tied to his or her success in developing followers.

Another developmental implication for the HRM function is that transformational and transactional leadership characteristics should be developed in both present and potential leaders. This implication is a point which emerged clearly from a synthesis of leadership research conducted by Parry (1996a). Such development is consistent with what Bass and Avolio (1994) call the Full Range of Leadership Development.

A final developmental strategy that has HRM implications is to develop an impression management strategy for potential leaders. Evidence suggests that impression management improves attributions of leadership effectiveness from followers, subordinates, and peers. Impression management “is concerned with the behaviors people direct toward others to create and maintain desired perceptions of themselves” (Gardner and Martinko, 1988, p. 321). Effective strategies include ingratiation, in which the leader appears likable, warm, humorous and charming; self-promotion, in which the leader appears competent and effective; and exemplification, in which the leader appears moral, honest, and dedicated. Impression management can be developed and enhanced over time, with regular monitoring and testing via the use of a questionnaire.

Having examined the HRM implications associated with overcoming certain challenges of the contemporary environment of organizations, it is necessary to propose the future directions of human resource management within the context of the preceding discussion.

Future Directions

As a result of the preceding analysis of the impact of the contemporary environment upon human resource management, two future directions can be posited. The first direction of human resource management is toward increased emphasis on the self-development of the human resources of organizations. Allied with this direction for HRM is the necessity for follower self-assessment of leadership and management competency. The second direction for HRM may be toward increased use of team criteria in the performance management function of organizations.


In the new organization of the early 21st century, the responsibility for the development of individuals increasingly will become the responsibility of those individuals, rather than the responsibility of organizational management. It has already been established that the responsibility for self-development and the responsibility for one’s own career are unintended outcomes of the downsizing and delayering trends of contemporary business life (Arthur and Rousseau, 1996). Such a phenomenon leads to self-centeredness and a self-serving rationale for employees within their relationship to their employers. Employees can rightly determine that their workplace is temporary, and that they can and should use it to develop their skills as fully as possible prior to the inevitable relocation to another place of employment.

However, there is justification for saying that this process of career self-responsibility will be formalized into the functioning of the human resource management role in organizations. After all, there is already argument that all managers are HRM managers. Therefore, implicit within this argument is the belief that management trends and philosophies will have to be translated into HRM practice.

Inherent within the above argument is a paradox. On the one hand, leadership development is the responsibility of the individual. Such a self-serving rationale is not compatible with contemporary notions of effective leadership. On the other hand, there is the issue of the role that HRM should take in leadership development. An attempt to resolve this apparent paradox is to say that the HRM role in organizations should be to assist individuals to have their own developmental experiences. In other words, a strategic HRM role would provide the opportunities for these experiences to occur. By so doing, the organization will behave in a way that is consistent with the “individualized consideration” component of Bass and Avolio’s Transformational Leadership. Therefore, the organization would be providing effective leadership which would counter the self-serving nature of individual self-responsibility for career development.

In support of the contention that leadership development is the responsibility of the individual are the findings of an extensive review and integration of leadership research conducted by Parry (1996a). He found that an integrating theme of the research findings was an emphasis on leader self-development, and the implication that better leadership is achievable by most people by taking responsibility for their own developmental experiences. Moreover, he found that an overarching theme of this leadership research was that of self-assessment. Self-assessment is a theme reflecting a self-directed, developmental change rationale for improved leadership effectiveness. Within this overarching theme run the four consistent sub-themes—that leaders must be self-developmental; recognize the importance of learning; are affected by societal paradigm shifts; and must be both transformational and transactional. As the name self-assessment suggests, this concept involves leaders having the responsibility for assessing their own competencies and for undertaking the necessary developmental work to improve their levels of both transformational and transactional leadership capability. The self-developmental and self-assessment themes take the responsibility for the needs assessment, initiation, and implementation of training and developmental activities away from HRM specialists, and put those responsibilities onto the individual. The self-assessment theme is represented in Figure 1.

Importance of leader self-
learning --------development------T/F and T/A l'ship-----effectiveness
Figure 1
Open systems model of the proposed self-assessment function for leadership.
Adapted from Parry (1996a:166)

Figure 1 indicates that the learning that leaders undergo will also assist in developing their self-efficacy, their degree of personal adaptability, their values and ethics, their capacity for individualized consideration, and will allow them to critically evaluate their own capabilities. This leader self-development will, in turn, create the capacity for leaders to be better transformational and transactional leaders. The impact of transformational leadership on their effectiveness has been discussed earlier. The feedback loop represents the issue that people who are better transformational leaders are better at developing the capabilities of themselves and of their followers. However, as Yukl (1998, p. 489) has acknowledged, there is a paucity of research on the effectiveness of what he calls "self-help techniques" for leadership development. The model for the self-assessment theme of leader effectiveness is an open systems model. It cannot be isolated from the wider community and society in which it operates. The model is open to changes in community culture, organizational culture, and other sociological/anthropological factors.

Wright and Taylor (1994) have also investigated the notion of leadership self-development. They proposed that instead of having a trainer or some other HR professional taking employees through the process of goal-setting, goal achievement, review and de-briefing, the people being developed do it themselves.

Hence, it can be concluded that the self-developmental direction for the future of human resource management presents a less active, less hands-on role for the HRM professional. Instead, the role of the HRM professional becomes one of opportunity-creator, facilitator, and enthusiasm-generator.

Use of Team Criteria

Another proposed direction for the management of the employment relationship lies in the use of team performance criteria. The aim here is to enhance leadership competency throughout organizations. The increasing use of the term “performance management” instead of “performance appraisal” indicates a change in direction for this HRM function. This change in direction partly reflects a recognition that performance appraisal was oriented excessively toward the individual, and less than adequately toward the management of the performance of teams.

Another rationale for using team performance criteria is that there is an established link between team cohesion and leadership effectiveness. For example, research has demonstrated that cohesive teams assist in enhancing the link between leadership and improved organizational performance. This paper has already posited that effective leadership will help to overcome the debilitating psychological effects of downsizing and associated management strategies. Therefore, if team cohesion will improve leadership efficacy, there is a strong case that the HRM role can respond by using team criteria to enhance leadership competency throughout organizations.

Accordingly, Avolio (1996) has proposed that teams which share the following characteristics represent the full range of leadership capability:

- high levels of trust among members, resulting in a willingness to sacrifice short-term gain for long-term potential;
- team members have a solid belief in themselves, the team, and its collective mission;
- members readily identify with the team mission and are committed to and inspired by it;
- conflict over different perspectives is valued and encouraged, often resulting in profound knowledge development;
- individuals consider it their responsibility to develop the potential of their associates.

Work is still being done by Avolio and his colleagues on the translation of leadership competencies into the team context. Moreover, it is recognized that this is a direction which must be pursued in the near future of human resource management. Included within this imperative is the need to convert team-leadership competencies into criteria for job analysis, selection, training, appraisal, and succession planning.


Four conclusions can be drawn from the preceding discussion. First, the senior management of organizations must recognize the competitive advantage to be gained from a motivated, committed, and well-led workforce. With the increasingly strategic role of HRM in organizations, the impetus for this recognition should come mainly from the HRM functionaries in organizations.

Second, emerging concepts like team leadership and leadership self-development must be appreciated by the people in organizations who perform an HRM role. It has already been established that the range of people who perform an HRM role has expanded such that it encompasses virtually every person in a managerial position. Therefore, the concepts of team leadership and leadership self-development must be widely appreciated by all management.

Third, leadership can be taught and learned. It is currently being taught and learned. Moreover, the recipients of this training are actually becoming better leaders as a result. Fourth, while considerable progress has been made in translating a range of leadership concepts and interventions into HRM functional criteria and competencies, much more work needs to be done. In particular, further work must be done to translate team leadership concepts into competencies and criteria from which a range of personnel management functions can be performed.


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Ken Parry is an associate professor of management and director of the Centre for Leadership Studies at Victoria University of Wellington, New Zealand. The Centre conducts research and executive development on leadership.

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