That is why it is so important to recognize the traits of poor managers, which we discussed in a recent article, and to, furthermore, understand the effects a bad manager can have on your company’s greatest asset – your employees.
That is why we have gathered the facts. What are the effects of a bad manager? We’re here to tell you just that.
The effects of poor management
Lessened employee engagement
Poor managers have a large effect on employee engagement. A study conducted by the Harvard Business Review studied 2,865 managers and discovered that employees under the worst rated leaders reached only the 4th percentile for level of engagement.
To counter that, those working under the best-rated managers were more engaged than 92% of their colleagues. Poor employee engagement can negatively affect your business and slow the achievement of your goals.
The Harvard Business Review further notes that many studies have noted that there is a strong correlation between the level of revenue and management. When management is rated as ‘poor’, the level of revenue is bound to drop.
When management is seen as strong and positive, it is more likely to go up. This was seen in a case study revolving around Sears, where employee satisfaction improved by 5% in a given time period and then there was a .05% increase in revenue.
While that does not sound significant, it amounted to an extra $250 million in sales for the company.
Decreased employee morale
Forbes reports that when a boss has a poor relationship with even just one member of their team, it is likely to affect the rest of their co-workers as well.
This could make this sample of employees anxious, unhappy, and all-in-all miserable, thus more likely to seek employment elsewhere, remained disengaged, or become unmotivated.
Most notably, poor management can result in a high level of turnover within your company. When employees are unhappy in their environment, they are more likely to seek employment elsewhere.
A large outflow of employees can not only reduce productivity in the office, but it could be quite costly to you as a business owner.
Not only would it require the use of resources to increase recruiting efforts, but Forbes notes that it costs between 25 to 30 percent of an employee’s salary to hire a replacement.
The bottom line
To sum it up, an inadequate leader within your management chain can have a largely negative effect on your business and the productivity, happiness, and retention rate of your employees.
In order to best put into place policies and procedures that help you to monitor the skills of your managers, let us partner you with a PEO that can effectively assist in weeding out poor managers, putting training programs into place, and help with the continuous monitoring of office leaders.