Coaching, as a practice, can be a controversial topic within an organization. Some organizations steer away from coaching, while others find it a necessary practice to improve employee motivation and performance. Current and past literature was reviewed in order to answer the question “How does coaching delivered by managers motivate employees and increase performance.” The aim of this paper is to determine the validity of coaching delivered by managers and its impact on employee performance and motivation levels. Reviewing Sir John Whitmore’s (2009) past work alongside the current literature reveals that coaching does increase employee motivation and work performance when delivered by managers. Research is lacking is in the identification of how each component of coaching directly impacts the coachee. Challenges of coaching include employee demotivation, incentives and rewards, time constraints, and over-coaching. The future of managerial coaching should promote proper training of managers and goal setting sessions with employees to ensure success.