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Which leadership style is best for employee well-being?

Posted by Nikky Lee - 28 September, 2021

Managers have a profound impact on employee well-being, more so than any other factor in the workplace[1]. While C-suite leadership might set the agenda of your employee well-being programme (or any business initiative for that matter), managers are the ones who carry it out on the floor—and the way in which they go about it can affect employee and impact your workplace culture. 

“Managers set the mood and tone of work environments—wielding the power to make or break the development of a culture of well-being,” write Jade Wood and Bailey Nelson at Gallup.

In short, how a manager leads has a lot of influence on their employees’ mental wealth and well-being. Here, we break down the well-being benefits and risks of four common leadership styles.


What are the four leadership styles?

  1. Transformational leadership—work to motivate and inspire their team, aiming to help team members fulfil their potential. Great for empowering staff and creating high job satisfaction.
  2. Democratic/participative—built around participation with the manager guiding the group and making final decisions. Good at generating team engagement and contribution.
  3. Delegative/laissez-faire leadership—decision-making is largely left to individual employees within the team. Good for highly skilled/expert teams.
  4. Autocratic/authoritarian—command and follow style with a clear separation between manager and employees. Good at providing clear what, when and how for tasks.


Related content: The Manager's Guide to Workplace Well-being


Transformational leadership

Studies have found transformational leadership is the most powerful leadership style for boosting employee well-being. Leaders who use this style seek to intellectually stimulate, support and grow each member of their team on an individual basis. Their lead by example ethos and ability to clearly articulate their vision means that not only is everyone on the same page but also motivated and inspired. These leaders generate both respect and trust from their employees, who in turn feel valued.

Well-being benefits:

  • Empowers team members and builds trust and purpose.
  • Encourages personal growth, which enhances employee engagement and job satisfaction.
  • Able to inspire positive change within their teams, leading to greater motivation and performance.

Well-being risks:

  • If a leader’s vision is unreasonable or high demand, it can lead to burnout.
  • Requires constant communication—if staff don’t receive this, they’ll lose interest.
  • Because the leader focuses on growing their teams individual by individual, some team members may get more focus than others, which may appear as favouritism.



As its name suggests, democratic leaders are natural collaborators and team builders, inviting their team members to participate and engage in tasks while still having the final say. They excel in industries that require out-of-the-box problem solving, creative solutions and innovation.

Well-being benefits:

  • Great at generating employee engagement and satisfaction.
  • Highly empathetic, which makes employees feel cared for.
  • Can generate highly creative solutions.

Well-being risks:

  • Majority opinions override minority ones, which may leave some staff feeling unheard.
  • Prone to communication failures when under pressure, which can add to employees’ workloads and cause frustration and stress with staff.
  • Poor decisions may occur if the team is inexperienced or lack knowledge, leading to stress and low morale when ideas fail.


Delegative/laissez-faire leadership

Delegative/laissez-faire leaders take a hands-off approach in their leadership style. Team members are usually highly skilled at what they do and are left to make their own decisions. The most effective delegative/laissez-faire leaders are those that act as sounding boards to their team, providing feedback, consultation and support to their team to help them bring their ideas to life.

Well-being benefits:

  • Encourages personal growth and innovation.
  • The high degree of autonomy which gives employees control over their work and creates strong job satisfaction and engagement.
  • Often utilises an employees’ full skill set, enhancing their employee experience and job satisfaction.

Well-being risks:

  • Can lead to poor role clarity within the team, making it difficult for employees to define what success in their role looks like. Can lead to stress, low satisfaction and high workloads.
  • Can lead to low productivity if staff need more hands-on guidance or training. This can cause low motivation and engagement.
  • Some employees may struggle to stay motivated with this amount of autonomy and lack of deadlines.


Autocratic/authoritarian leadership

While autocratic/authoritarian leadership often gets a lot of flak, it can be a powerful style in certain circumstances. This style is particularly effective when the leader is highly experienced and the rest of their team is not. Leaders of this style are known to make fast decisions rather than waste valuable time and resources getting input from a team that may not have the knowledge or information to make effective decisions. The best autocratic/authoritarian leaders work hard to establish trust between themselves and their team and use a mix of autocratic, democratic and transformational leadership styles.

Well-being benefits:

  • Provides direction and structure, such as role clarity, clearly assigned tasks and deadlines, which provides employees with a clear understanding of what is expected from them.
  • Can reduce stress in high-pressure situations, allowing staff to focus on their individual tasks without needing to worry about the bigger picture.
  • Encourages proficiency, both in individual roles and as a team, which can enhance performance and morale.

Well-being risks:

  • Can cause a toxic workplace if this style is taken too far.
  • Limited ability to contribute, which can lead to dissatisfaction and low morale.
  • Can lead to micromanagement, which can increase employee stress levels and create low morale.


Employees are stressed, overloaded and struggling to balance work and life demands. But it doesn't have to be this way. Create a work culture where employees can thrive with our Manager's Guide to Workplace Well-being.

Download the Manager's Guide to Workplace Well-being

[1] Randall J. Beck and Jim Harter. Why Great Managers Are So Rare. Gallup, gallup.com.

Topics: Employee Experience

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