How to Spot A Bad Leader (Courtesy of PsychologyToday)

1. Use of Threats and Punishment
Punishment is simply a bad and generally ineffective leadership tactic. The goal of punishment is to STOP undesired behaviors. It does nothing to encourage positive, productive behaviors in employees. People who are punished, or threatened with punishment, feel resentment and want to get back at the source of the punishment.
From the leader's perspective, punishment is ineffective because it turns you into a "police officer," constantly on guard to catch any and all offenders (punishment is only effective if it occurs immediately and consistently after each violation).
Threats can only be effective if a boss is willing to follow through with the threatened punishment ("do that again and I'll fire you"). If unwilling or unable to follow through, then it will be seen as an "empty" threat, and the leader will lose control.

2. Use of Fear Tactics
Leaders sometimes use fear to try to get followers to toe the line, or as a motivational strategy ("if production doesn't pick up around here, people are going to lose their jobs"). Similar to threats, this strategy can often backfire. Fear can cause stress, and in extremes, reductions in performance and efficiency.
A common use of fear occurs when leaders create an "us versus them" mentality. We have seen this used by political leaders when they create an atmosphere of fear from threats outside of the group or nation (e.g., fear of unnamed terrorists; statements like "they are out to get us"). Fear can cause groups and organizations to "hunker down" and go into a self-protective mode that can stifle creativity and innovation.

3. Self-Serving Use of Power
How often have we heard the phrase "power corrupts"? Actually, power only corrupts when it is used for self-serving ends. Often leaders become "intoxicated" by the increased power that their position gives them. Bad leaders let that power go to their heads and do things that are in their own best interests without considering the interests of the collective.
Corporate leaders who ensure that their salaries and bonuses are secure, while freezing employees' pay or using layoffs to decrease expenses are recent examples of the self-serving use of power.

4. Creating Factions: Ingroups vs. Outgroups
Although there is nothing wrong with creating "A team" of top performers, or favoring your best employees, there is a delicate balance between creating healthy internal competition and blatantly playing favorites. Bad leaders, however, reward ingroup members not because they are top performers, but because they show loyalty or "kiss up" to the leader.
Bad leaders cultivate their ingroups with favors, and that makes it difficult for outsiders to identify bad leaders, or for followers to dislodge the leader from the position of power. The ingroup followers defend the leader and work to keep him or her in power. Bad leaders often exist because their followers allow them to remain.