Purpose: The purpose of this paper is to examine dilemmas encountered by kindergarten head teachers with the further aim of developing their capability to recognise and resolve "leadership dilemmas". Design/methodology/approach: Action research was used to conduct a three-phase study involving 16 kindergarten head teachers and six system managers (within the Auckland region). A reconnaissance phase investigated the nature of perceived dilemmas and typical responses. In the second phase, an intervention that provided participants with both the theory and practice skills was implemented. A third phase of research evaluated the extent to which change had occurred. Findings: The reconnaissance phase findings (pre-learning questionnaire) confirm the incidence of dilemmas in kindergarten settings. The data show that, while leaders could identify issues that signalled the presence of dilemmas, they were unable to articulate leadership dilemmas clearly or confront them successfully. A professional development intervention was evaluated using a post-learning questionnaire. There is evidence that these leaders were better able to recognise and articulate the leadership dilemmas they encountered in performance management settings. The findings show that participants are able to analyse their responses to these dilemmas by relating these to the theory base and indicating where they believe there is need for further learning. In summary, the intervention did change participants' practice but the study is limited by its inability to gauge internalisation of learning and study its implementation. For this to occur another cycle of action research is required. Originality/value: The paper is original in that it studies the practices of leaders in relation to resolving dilemmas which arise when leaders manage the performance of staff. If leaders have an understanding of the theory and skills they need to address these tension-laden problems, they could positively influence the quality of teaching and learning through leadership practices. (Contains 2 tables and 1 figure.)