The effect of bad management on your bottom line

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We all know the impact bad managers can have on their underlings – most of us have been those underlings at some point. However, new research from McKinsey, Stanford and the London School of Economics has produced some serious numbers to  back up the idea that people leave managers, not companies.

A one-point improvement in your company’s management practices is worth as much as a 25%  increase in your labor force, or a 65%  increase in the amount of your invested capital,” according to the study’s authors.

The problem does not lie in not knowing what good management practices are, but rather in implementing those practices, HR columnist David Witt said.“The researchers were surprised to find that even though good management practices are well known and the correlation is clear, the reality is that many firms are still poorly managed.”

He  listed three well-known manager behaviours essential to good performance and suggested  that HR pros consider the degree to which these practices  were used in  their company.

  1. Performance Planning: Employees have written goals that clearly identify their key responsibilities, goals, and tasks.
  2. Performance Coaching: Employees meet with their supervisors at least twice per month to discuss progress, identify roadblocks, and get the direction and support they need to succeed.
  3. Performance Evaluation: Ensure  there are no surprises when it comes to annual reviews. Managers and direct reports are “in-synch” because performance against goals is being measured on a regular basis instead of once a year.”

Don’t let an indifferent attitude toward implementing good management practices keep you and your organization from performing at a high level, Witt said. “Giving managers the ability to recognize and reward those who meet and exceed goals while demonstrating desired behaviours based on your values will go a long way towards improving how much theory leads to practice."

 

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