Business Leadership Today

The Positive and Negative Effects of Leadership


Matt Tenney, Author of Inspire Greatness: How to Motivate Employees with a Simple, Repeatable, Scalable Process

Good leadership is the product of making an informed and unbiased assessment of the employees we lead, clearly identifying and communicating the goals we want them to achieve, and determining how we can help them achieve them.  

In order to achieve these goals and produce positive results, leaders have to consider the positive and negative effects leadership can have on employees and interact with them in positive ways that produce the desired results. 

The most effective leaders tend to be compassionate and possess a high level of emotional intelligence, which makes them always mindful of employees’ needs. They assess the current reality of their team, determine what team members need to perform well, and inspire them to do great work that benefits the organization’s bottom line without being detrimental to their well-being. 

This type of leader practices positive leadership and leads their team in ways that minimize negative effects. 

The positive and negative effects of leadership can be seen in all areas of a business. Leaders set the tone for the organization, and all their actions and behaviors help or harm it. Positive leaders affect teams in positive ways, creating a positive employee experience, resulting in positive business outcomes. 

This article will look at the ways leadership impacts an organization and how positive leadership can help organizations avoid the potentially negative effects of leadership. 

The Effects of Leadership

Poor leadership has been cited as one of the main drivers of the turnover we’ve seen with The Great Resignation and now quiet quitting. This is not surprising when you consider that 50-70% of an employee’s perception of their work environment is linked to the actions and behaviors of management.

Everything a leader does affects the employee experience, which shapes a worker’s perception of their job over the course of their tenure with a company. Employee experience affects both engagement and retention.

To fully understand the negative effects leadership can have on employees, we have to consider the negative effects positional authority can have on us, as leaders. 

Research has shown us that power can impair our mirror-neurological activity, which is the neurological function tied to our ability to understand and interact with others. 

This leads to a phenomenon known as hubris syndrome, which is defined as a “disorder of the possession of power, particularly power which has been associated with overwhelming success, held for a period of years.”

Greater responsibilities and the resulting pressure of taking on those responsibilities can rewire our brains and cause us to stop caring about others as much as we used to. We may find it more difficult to empathize with others when this happens. 

This creates a situation where leaders lack the ability to make informed, unbiased assessments of their employees, which can have a negative impact on employees’ motivation and performance, leading to negative business outcomes. 

To avoid these potentially negative consequences of leadership, we can look to the principles of positive leadership for guidance. 

Positive Leadership

According to Kim Cameron, author of Practicing Positive Leadership, positive leadership is “the implementation of multiple positive practices that help individuals and organizations achieve their highest potential, flourish at work, experience elevating energy, and achieve levels of effectiveness.” 

Positive leaders guide employees, model core values that reinforce more of the behaviors employers want to see in the organization, and prevent work environments from turning toxic. 

Positive leadership includes the following components:

  • Experiencing, modeling, and purposefully enhancing positive emotions
  • Developing employees while maintaining profitability
  • Demonstrating a high degree of self-awareness, optimism, and personal integrity

In this video, Jon Gordon, acclaimed author of The Power of Positive Leadership, discusses how positive thinking and practices help leaders both set the example for the behaviors they want to see from their teams and create a high-performance culture that keeps employees motivated to do their best work.

Positively Affecting Employee Experience

Gallup defines employee experience as “the journey an employee takes with your organization.” This journey includes every interaction that happens during the employee lifecycle, as well as the experiences that involve an employee’s role, work environment, supervisor, and well-being.

Employee experience plays a significant role in employee motivation, employee engagement, and employee retention, but that’s not all. 

When an organization provides a positive employee experience, they see improvements in customer satisfaction, greater innovation, and generate 25% higher profits than organizations that do not provide a positive employee experience.

Meaningful work, job clarity, opportunities for professional development, autonomy, an inclusive work environment, regular recognition of contributions, healthy feedback between leadership and employees, a good work/life balance, and trust-based working relationships make the employee experience a positive one for all team members. 

To avoid the potentially negative effects of leadership, leaders need to focus on developing two important qualities: emotional intelligence and compassion. 

Emotional Intelligence

Emotional intelligence, known as EQ, is considered to be one of the most important soft skills a leader can have, and it is one of the strongest predictors of performance, with around 90% of top performers exhibiting high levels of emotional intelligence. 

Emotional intelligence refers to a person’s ability to recognize, understand, and regulate their emotions and respond to those emotions in ways that allow them to communicate better, empathize with others, and address and overcome challenges in a more positive way.

A study by revealed that 71% of employers surveyed valued EQ over IQ because employees with high emotional EQ stay calmer under pressure, resolve conflict more effectively, and are more likely to respond to co-workers with empathy.

Self-awareness, a central feature of EQ, fosters good communication, builds trust, and increases accountability. It also helps leaders process their emotions in a more positive way that enables them to address challenges more effectively.

A leader who not only knows themselves really well but is also sensitive to the emotional needs of others and acts on the knowledge gained through self-awareness and social awareness will find themselves leading highly engaged employees who feel a sense of purpose in their work and take pride in doing it.


Compassionate people have positive intentions and genuine concern for others. In leadership, compassion creates stronger connections between leaders and their teams by facilitating collaboration, building and maintaining strong, trusting relationships, and improving employees’ loyalty. 

Compassionate leaders are perceived as stronger and more competent. It is a particularly valuable skill for leaders to have due to the potentially negative effects power can have on us. 

Developing compassion can help us avoid hubris syndrome and helps us maintain authentic relationships with our teams. In short, it helps us to be more effective, more caring leaders. It can help us to engage and retain talented employees because it creates a positive work environment where employees feel truly valued. 

Compassion takes us beyond empathy. When we empathize, we understand and share the feelings of another person. Compassion is more proactive because it helps us to actively contribute to the happiness and well-being of others, maximizing a leader’s ability to positively influence the lives of their team members and the organization’s long-term profitability.  

Matt Tenney has been working to help organizations develop leaders who improve employee engagement and performance since 2012. He is the author of three leadership books, including the groundbreaking, highly acclaimed book Inspire Greatness: How to Motivate Employees with a Simple, Repeatable, Scalable Process.

Matt’s ideas have been featured in major media outlets and his clients include numerous national associations and Fortune 500 companies.

He is often invited to deliver keynote speeches at conferences and leadership meetings, and is known for delivering valuable, actionable insights in a way that is memorable and deeply inspiring.

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