In every industry, whether it’s finance, healthcare, education, or technology, performance isn’t driven by skill alone. It’s shaped by something more subtle, yet profoundly powerful: expectation.

As leaders, the way we perceive and interact with our teams can either elevate them to new heights or quietly cap their potential. This phenomenon is captured by two psychological concepts: the Pygmalion Effect and the Golem Effect.

What Is the Pygmalion Effect?

These signals boost the employee’s confidence, motivation, and ultimately, performance.

What Is the Golem Effect?

The Golem Effect is the darker twin of the Pygmalion Effect. It occurs when low expectations are communicated, intentionally or not, leading to worse performance.

Employees who sense that their leaders doubt them often receive:
• Less attention and support
• Fewer challenges or growth opportunities
• Subtle signs of mistrust or indifference

Over time, they may begin to internalize these low expectations and perform accordingly.

How This Plays Out Across Industries

Healthcare

In a hospital, a senior nurse who believes a new resident will excel will invest time in mentoring them, increasing their confidence and skills. The opposite, skepticism, can lead to hesitation, isolation, and even clinical errors.

Corporate & Finance

A manager who believes a junior analyst has leadership potential may assign high-profile projects, offer mentoring, and advocate for promotions. Meanwhile, someone perceived as average may be overlooked, regardless of ability.

Education

Teachers who expect excellence from students tend to challenge them more and provide better feedback. Those with low expectations often unintentionally create environments of low achievement and disengagement.

Technology & Innovation

In fast-moving tech companies, belief in team innovation is key. A leader who expects ingenuity fosters experimentation. If the opposite belief takes hold, teams may avoid risk, fearing failure and judgment.

Cycle of Expectations

Pygmalion Cycle:
1. High Expectations
2. Positive Leader Behavior
3. Boosted Confidence
4. Improved Performance
5. Expectations Reinforced

Golem Cycle:
1. Low Expectations
2. Minimal Support or Doubt
3. Reduced Confidence
4. Poorer Performance
5. Negative Beliefs Reinforced

How Leaders Can Harness the Pygmalion Effect
1. Examine your biases. Ask yourself: Are there people I’ve already decided will succeed or fail?
2. Set clear, ambitious expectations. People rise to the level of belief you show in them.
3. Support consistently. High expectations without guidance can backfire, pair them with coaching.
4. Recognize effort and progress. Reinforce positive behavior as part of your expectation cycle.

Takeaways: Belief Is a Leadership Tool

Every interaction with your team carries a message, “I believe in you” or “I don’t think you can.” Which message are you sending?

The Pygmalion Effect teaches us that leaders don’t just manage performance, they shape it. Choose your expectations wisely. They might just become reality.