The changes in the economic environment have an influential role shaping the structure of the organisation. Human capital is one of the important resources that need effective management so that they can exert their effort in the right place to bring successful results for the company. Now-a-days, most of the companies have Human Resource Management (HRM) department which is responsible for managing various aspects of Employees. HR professionals are the one who bridge the gap between employees and the organisational goals. One should not confuse the role of a HR professional with that of manager. A manager is the head of department it can be finance, accounts, etc. However, an HR professional is responsible for allocating the human resource effectively starting from hiring individuals, to making sure that individual objectives are aligned to the goals of the organisation. The compensation policies are defined by HRM department while the individual performance is looked after by the managers (W. Kahnweiler and J. Kahnweiler, 2012).
Leaders can be defined as those possess the ability to lead; it may be an individual or an organisation (Sharma and Jain, 2013). For example, Microsoft is regarded as the market leader in software industry. On the other hand, Bill Gates is known to be one of the most effective leaders in the world (Demuth, 2013). Each leader has his or her way of communicating with the employees or subordinates which defines the former’s style of leadership. Trait theory of leadership is regarded as one of the traditional theories of leadership that opines Leaders are born with certain qualities like, personality, enthusiasm, communication, extrovert behaviour, etc. All these qualities in a leader distinguish him or her from the rest. However, over the years with greater evolution in the world researchers and scholar continued their search for a more concrete theory in relation to leadership theory. The theory of leadership in the modern world sates that leaders are not born and can develop leadership qualities.
Currently most of the companies are engaged in training so that they can develop more professionally sound leaders. However, this training is expensive and puts additional pressure upon the financial resources of the company. This paper focuses on the role of effective managerial leadership development intervention so that organisations can gain responsible leaders and save unnecessary expenditure.
There are several reasons which establish the relationship between leadership and performance of a company. There are a number of challenges that are faced by a company such as the need for innovation based competition for which effective leadership is required to facilitate much needed improvement in relation to the performance of the company. For example, transactional leadership is highly effective in order to achieve the goal set for the task at hand by using rewards and recognition as the preferred way of motivating employees to improve their performance. On the other hand, they are the visionary who are responsible for setting the target for the organisation. The value of strategic vision is very important for a company because it observes the potentiality of a particular investment. It is this vision of a leader which acts as the guideline for setting up goals for the company. For example, it was the vision of Bill gates which was able to observe the great potentiality in the software market which resulted in making Microsoft what it is today (Lesinski, 2009). Researchers are of the opinion that visionary leadership is able to build greater trust among the employees who work in order to realise such visions with vigour and dedication. Working in a team is one of the most common views to be noticed in modern day business organisations. Each team is bestowed under that responsibility of team leaders who play significant role in implementing collective norms and help his or her team to get accustomed to the working environment. It is the communication between the leaders and the team members that defines their relationship stimulating the performance of the team as a whole (Jing and Avery, 2008).
Organisational performance is a dependent variable which is influenced by a number of independent variables such as, leadership, employees’ commitment, HRM practices, customers’ satisfaction, suppliers’ management, etc. (Cania, 2014) Studies reveal that among all these components influencing organisational performance HRM department serve as a connecting medium. HR professionals helps in formulating polices which are put into strengthening organisational culture. Employees are the hands that transform the input into output and HRM practices influences their behaviour and attitude thus having profound impact upon the organisational performance. A firm need to deliver according to the changing requirements of the market and its ability to deliver determines its performance. HRM practices help a company gaining competitive advantage; some are described below (Cania, 2014):
It is important that successful results are related to the performance of the employees including leaders and managers and it is important they are made aware of the changes that are implemented in an organisation which can guarantee that there is minimum resistance.