The highest leader, the principal, is legally able to decide on policies, make the proper choices, and positively affect teacher performance in order to foster a stimulating work environment. The study was carried out at SMA Negeri 3 Kayuagung. Researchers employed an inductive qualitative approach in this study to try to delve thoroughly into the principal’s policy at SMA Negeri 3 Kayuagung about teacher performance. Techniques for gathering data include observation, interviewing, and documenting. The quality approach used by analysis techniques comprises data reduction, data display, and conclusions. According to the study’s findings, policy decisions were made in response to identified issues, and funds were allocated to initiatives aimed at enhancing teachers’ performance through workshops on competency development and training. The principal oversees, monitors, evaluates, and tracks student progress using a teacher work evaluation framework.