The Leader As Coach understands the following distinction: 

discern vs. judge

To discern means to observe information and then draw conclusions based on that information.  Discern is when we are able to pick up every aspect of what is occurring or what we observe without having to judge the person as in compare, diminish, make wrong or feel better than.

A team leader discerns better when

• his needs are met
• he doesn't get his energy from the other person (team member, client, etc.)
• he doesn't feel pressure to perform
• he is independent

People judge because they're threatened in some way or reminded of a piece of themselves that is yet to be reconciled.  Compassion is also important because it keeps the observation on the discernment side vs. the judgmental side.

NOTE:  One can discern without judging and still have a strong opinion and/or label or peg the person.

Discernment can be an active process vs. just a passive one.  It's the Leader As Coach's job to peg, or discern, who their client (direct report, coworker, team member, etc.) is, where they're at, what's in the way, and what's really going on.  The Leader As Coach who thinks less of a team member, diminishes them or stops standing up or behind them (as in putting them in a small box) is judging, not discerning.

In the video clip below, which do you see happening?  Discerning or judging?