["Scandinavian Journal of Psychology, EarlyView. ", "\nABSTRACT\nLaissez‐faire leadership is considered a negative form of leadership, potentially harming employee health, well‐being, work environment, and performance. However, research on boundary conditions explaining its negative effects remains limited. Drawing on conservation of resources theory, this study examines the relationship between laissez‐faire leadership and employee performance, and the buffering effect of self‐compassion, defined as being supportive towards oneself when facing suffering or pain. Data were collected from 220 full‐time employees across various industries in Norway. To assess discriminant validity and address common method bias, confirmatory factor analysis was conducted before regression analyses. Consistent with hypotheses, laissez‐faire leadership was negatively associated with employee performance. Moreover, self‐compassion moderated this relationship, with no decline in performance among employees demonstrating moderate to high levels of self‐compassion. Our study contributes to the laissez‐faire leadership literature by testing whether a coping strategy identified for active destructive leadership also applies to passive forms. Furthermore, we contribute to the self‐compassion literature by responding to calls for research on its link to organizational outcomes and the level needed to buffer negative effects, while addressing generalizability beyond the healthcare sector. Implications for future research, leadership development, and employee training are discussed.\n"]