We all know the mantra: people leave managers, not companies.

The role of the manager in the workplace is perhaps the most significant in terms of impact on organizational performance. Managers have the most direct influence on employees they line manage. They carry the responsibility for aligning the performance of their department and its staff with overarching organizational goals. They play a vital role in shaping organizational culture.

Fundamentally, they are the link between senior management and those operating at grass-roots level.

Given the interconnected nature of these duties, the approach, style and success of company managers has a wider effect than any other workplace function. So, how do we ensure our managers are delivering?

This blog breaks down those areas where managers have greatest impact, and explores how this affects different aspects of business.

The role of a manager

Before we explore the ways in which a manager can impact on business results (and how to get that right) it’s worth stepping back and reminding ourselves what the role of a manager actually is.

Although the job title of ‘manager’ is used widely to describe a variety of responsibilities – from managing a function to a department or an event – we refer here to managers of people:

impact of managers definition

Though individual responsibilities vary from business to business, renowned management consultant Peter Drucker divided what he saw as the ‘primary functions’ of a manager into five distinct components:

  • Set objectives– setting goals for the group, and determining how best to meet those
  • Organize– divide work into manageable activities, and assign these to relevant team members
  • Motivate and communicate– communicating decisions clearly and creating a team ethos amongst staff
  • Measure– establish appropriate yardsticks and targets, and analyze and interpret performance
  • Develop people– developing staff as company assets

In recent years, rewarding and recognizing staff has also come to be recognized as an important element of management. A shift in talent management practices and the growth of Millennials in the workplace has seen focus move to coaching and continual feedback, with the offer of a clear incentive or pathway essential to maintain motivation levels.

Motivating through performance management

Building and supporting a strong and well-executed performance management culture is one of the key areas in which a manager can impact on business results.

A well designed system allows for regular meetings between manager and employee, offering a platform for assigning clear, measurable performance objectives as well as an opportunity for mentoring. Yet despite the supporting evidence, research shows many managers are failing to deliver on their responsibilities:

impact of managers performanceimpact of managers goals

How can managers provide effective motivation through performance management?

The answer lies in a move towards agile performance management processes, rather than structured annual reviews alone. Regular appraisals allow not only for easier identification of underperformance, but also the celebration of success, and a reassurance for the employee that there is an obvious route to personal growth and development within the organization.

agile performance management

Engaging employees through positive management

No statistic captures the influence of a manager on the day-to-day experience of an employee than that uncovered by Gallup research that managers account for 70% of variance in employee engagement scores. In assessing this analysis, the Harvard Business Review cites two additional behaviors which impact both employee engagement and performance levels within the business.

The first of these is, unsurprisingly, communication.

Gallup studies have report a strong link between consistent managerial communication with higher engagement levels, with those combining face-to-face, phone and communication tools seeing the best results. However, evidence shows 69% of managers report feeling uncomfortable communicating with employees in general.

Investment into soft skills training, combined with effective internal communication tools such as social networks or intranet platforms, can support managers in overcoming barriers to communication.

impact of managers communication

An interpersonal coaching approach to leadership also yields positive feedback, with those who feel that their manager is invested in them as a person more likely to feel engaged. Managers who can appreciate that each team member is different, and understand how best to deal with each individual personality, are crucial to fostering a culture of engagement across the team.

Second is a focus on an employee’s strengths, and building upon these, as opposed to identifying and improving weaknesses. A strengths-based culture allows team members to learn more quickly and produce a greater quality and quantity of work, allowing staff to use the best of their natural talents.

Poor management and its negative impact

Whilst the characteristics of substandard managers can be wide-ranging, from poor communication to lack of integrity or courage, the effects of these can be extremely damaging to morale and productivity. In fact, poor management not only affects employee productivity, but can also have indirect consequences for workplace innovation and the ability to adapt to changing business conditions.

One of the direct impacts of bad management can be worker stress, which could be triggered by instances a strained relationship with a supervisor or an unmanageable workload. It is widely accepted that a majority of engaged, productive staff achieve a healthy work-life balance; however, stress at work can carry over to misery or dread at home, resulting in an emotionally-drained employee who is most likely unhappy in their job.

engaged employees bar chart

What’s more, poor communication – whether that be the lack of through instruction, or inability to give proper direction – can also contribute to poor employee productivity. Confusion or lack of understanding is likely to lead the team member to misinterpret what has been asked of them, diminishing their own work performance and breeding resentment.

Resentment and blame culture are toxic to morale and therefore productivity, resulting in a less energetic workforce who care less about their quality or work and their overall operative level.

Effect on organizational performance

Given that managers are responsible for an individual organizational department, any drop in efficiency or productivity could have potentially disastrous implications for business performance overall.

A manager sets the context to help each component to deliver its contribution to wider organizational goals, with poor performance in one specific area potentially undermining strategic goals.

A bad or ineffective manager can also affect an employee’s perception of the company’s overall vision and values, potentially causing unhappiness and leading to a high turnover of staff, causing another detrimental cost to the business. When this occurs, a manager also has a significant impact upon the culture and employer brand of an organization: impacting upon the ability to attract top talent, or how the business is perceieved by its customers and stakeholders.

How to nurture and support effective managers

The potential impact of poor managers underlines the critical importance of the management team within any successful organization. Management consultant James A. Koroma states that in today’s global business, “conscious and conscientious development of competent caring leaders is critical to organizational survival”.

Investing in our leaders and managers is essential to business success. To circumvent potential negative impacts of managerial approach or philosophy, we must:

  • Recognise the specific skillset required of a manager
  • Guard against over-promoting employees based on tenure or strong performance in an unrelated role
  • Provide the necessary tools and communication channels required to connect managers with their teams
  • Invest in training and up-skilling managers
  • Move towards an agile performance management culture, encouraging managers to provide frequent and informal feedback alongside structured reviews
  • Develop leaders who coach and support, engaging with their teams, as opposed to bosses who dictate

When we have a strong, united and capable leadership team, the benefits can be extensive – and hugely profitable.