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Managers Don't Matter

April 4, 2010

The old saw that “people don’t leave companies, they leave managers” has become outdated—if it ever was true. Recent polls on retention reveal that crummy managers aren’t the principal cause of employee defections. While employers say the manager-employee tie is the biggest or second-biggest reason workers jump ship, employees put many other factors ahead of the manager connection, such as stress and base pay.

Still, some experts argue that getting manager-employee relations right is vital now. Managers, observers say, play a crucial role in inspiring workers in firms that are often in flux, frequently riddled with distrust and increasingly distributed across the globe. Studies show employee engagement has dropped during the recession. And in the wake of company decisions to cut staff, freeze salaries and take other cost-cutting steps, many workers are itching to bolt their firms.

To knit alienated employees into cohesive, innovative teams, companies will have to rely on savvy supervisors, says business consultant Karen Lojeski.

“What I’m finding is, managers matter more than ever,” she says.

Key connection
Linda Devlin says her boss matters more these days. Devlin, a senior manager at consulting firm Accenture who is responsible for leadership development and succession planning, says her supervisor has become more important to her engagement in the tough business climate. Devlin’s boss, global director of leadership development Camille Mirshokrai, has translated Accenture’s overall strategy in concrete terms as well as acted as a kind of sentry, passing on information about how the company is doing, says Devlin.

“The importance has grown in terms of feeling connected to our organization and not feeling lost in a black hole,” she says.

Mirshokrai, for her part, says managers are crucial when it comes to an increasingly important retention factor: shaping jobs so employees get to do what they’re best at each day. Generation Y’ers in particular want to be able to tout their achievements at work, she says.

“The company that offers you the best experience is going to get you,” Mirshokrai says. “And that’s where the manager plays a key role.”

For years, managers have been at the heart of Americans’ job experience. Supervisors not only have delegated tasks to workers, but have also judged their performance. Over the past decade or so, managers have been asked to take on more roles for employees, including career development coach and onboarding guide for new hires. According to research firm Gallup, the relationship with the manager is the largest factor in employee engagement, accounting for at least 70 percent of an employee’s level of engagement.

Employee engagement is a concept that captures retention—how committed employees are to their firms—but also reflects how willing workers are to put in extra effort on the job. Gallup has documented a connection between higher levels of engagement and higher productivity and profitability.

Engagement has fallen during the recession, a number of studies show. A May 2009 survey by consulting firm Watson Wyatt Worldwide (now Towers Watson) of 1,300 workers at large U.S. employers found that engagement levels for top performers fell close to 25 percent year over year. Employees overall experienced a 9 percent drop in engagement year over year.

Sixty percent of employees intend to leave their firms as the economy improves this year, and an additional 27 percent are networking or have updated their résumés, according to a late 2009 survey of 904 workers in North America by advisory firm Right Management.

Influence overstated?
  
  But you can’t pin all that dissatisfaction on direct supervisors. Managers have never been the sole factor in worker engagement and retention, says Jack Wiley, executive director of the research arm of employee survey firm Kenexa. Wiley has reviewed data going back to 1994, finding that the key drivers of retention have remained consistent: confidence in an organization’s future; recognition for contributions; opportunities for growth and development; and a good fit between the job and a person’s skills and abilities.

Managers influence the recognition component and probably the development and job-match pieces, Wiley says. But they have limited power over the confidence component and may be hamstrung on employee development if executives slash training budgets.

“If you’re in love with the company, you can outwait a stinker of a manager,” Wiley says. “The role of the manager is often exaggerated.”

A report last year from Watson Wyatt found that “relationship with supervisor/ manager” was the top-ranked reason employers gave for why employees leave an organization, cited by 43 percent of respondents. But employees themselves rated stress levels as the top reason, followed by base pay. Four other factors tied for third place, none of which was the manager relationship.

Similarly, a report last year by Salary.com found that employers ranked “poor relationship with manager(s)” as the second-most-important reason employees leave a job. It was cited as a significant factor by 38 percent of employers. But bad blood with the boss didn’t rank in the top five reasons employees gave for leaving a job, which included inadequate compensation, inadequate professional development opportunity and boredom.

Managers may be less central to employees these days in part because of the lingering recession. The downturn threatened the very survival of firms, forcing employees to pay more attention on their organization overall. The ways companies have responded to the recession also is a factor, experts say. Rusty Rueff, a consultant and board member of job feedback site Glassdoor.com, says lower-level managers used to act as a buffer between employees and company policy, with some control over workers’ destinies. But much of the downsizing and cost-cutting during the downturn has been dictated by top executives, leaving frontline supervisors without any influence.

“At that point, you’ve neutered the manager,” says Rueff, who worked as an HR executive at Electronic Arts and PepsiCo. The result, says

Rueff, is that workers have less reason to care about their connection with their supervisor. “The employee feels they’re out there on their own,” he says.

Brian Kropp, analyst with the Corporate Executive Board, says managers have had less time for their direct reports, which has made it harder for them to be effective at spurring above-and-beyond efforts from their team members. The average manager worked about 10 percent more hours a week in the first half of 2009 compared with the first half of 2008, but spent 20 percent less time with their team members, Kropp says.

Recession’s effect
Kropp also says the ongoing upheavals at so many firms have loosened the bonds between bosses and workers. In a recent Corporate Executive Board survey, 60 percent of employees said they had a change in manager in the past six months or expect one in the coming six months. Given that grooming employees is a long-term process that pays dividends over the course of years rather than months, managers are bound to pour less into their people, Kropp says. “I don’t have the same incentives I had to be with them, to develop them, to care for them, to invest in them as I had before,” he says.

In addition, changes in the workplace that predate the recession have made the immediate manager relationship less relevant for workers, says Ilene Gochman, a consultant with Towers Watson. She notes that many companies have adopted “matrix” structures in which people have multiple managers. Firms have been conducting work in the form of ad hoc projects that may utilize employees from different business units. Rather than asking managers questions about company policies or training courses, employees can get much of the information they need from online portals.

And, Gochman says, companies often have mentoring programs that give employees a connection to another more-senior person in the organization besides their manager. “You don’t have to ‘leave your manager,’ ” Gochman says. “You can work around them now.”

Still, some observers say managers remain crucial to company efforts to win over a workforce that is skittish, skeptical and seeking greener pastures.

By giving employees a good understanding of how their individual efforts contribute to broader company goals, managers increase workers’ sense of control amid challenging times, Gochman says. “A good manager is going to be that guide for you,” she says.

Companies also are under pressure to redefine a worthy employment deal for workers in the wake of layoffs, salary freezes and benefit cuts. Gochman says managers play a key role in reinforcing messages about the new “employment value proposition.”

Managers continue to be essential to engagement at financial services firm Ameriprise, says Nick Nyhus, vice president of talent management at the 11,000-person company. Ameriprise cut about 300 positions early last year, and the firm is highly matrixed—factors that can diminish the importance of the manager-employee tie.

But Nyhus says Ameriprise has a culture of fostering strong relationships, which is a foundation of the firm’s work as a financial advisor. And in an employee engagement survey conducted in the third quarter of last year, Ameriprise found that the significance of the manager-employee bond remained steady. “That relationship was pretty key, still,” Nyhus says.

Building trust
Managers are vital to reducing the “virtual distance” that can exist in geographically distributed teams, says consultant Lojeski. Virtual distance refers to feelings of isolation among colleagues who typically communicate through e-mail, telephone or other technologies, and it can hamper financial performance and innovation, Lojeski says.

Managers need to develop “techno-dexterity,” Lojeski says, which means knowing how to communicate through a range of tools depending on the message and the audience. She cites the example of an executive who sends “video e-mails,” which gives people the richer experience of seeing facial expressions and hearing a voice rather than simply reading text.

Kropp, of the Corporate Executive Board, says a key is to make sure managers are focusing only on the handful of things that matter most. Companies, he says, have pushed many HR tasks onto supervisors in recent years, including greater responsibilities for handing out pink slips. “We’ve just gone too far,” he says.

But organizations would err if they removed talent management duties from managers altogether, says Tim Ringo, global leader of IBM’s human capital management division. The traditional manager, who merely allocated work and judged performance, is “dead,” says Ringo, whose unit sells HR software and services. He says firms need leaders who can hold on to high-potential employees by paying attention to their career development.

To this end, talent management software systems serve a critical function, Ringo says. In an era in which managers may change quickly, tools like performance management systems can help new supervisors quickly grasp the strengths, history and future plans of team members. Without such a system, “it’s just chaos all the time,” Ringo says.

While cutting-edge software may be part of the solution, so is old-fashioned empathy. Brad Federman, president of consulting firm Performancepoint, says that supervisors need to take a genuine interest in others. “The more self-interested we are, the more our relationships will suffer or be superficial,” Federman says. “Firms must help managers learn ways to reduce their self-orientation to build a culture of trust.”

A demanding role
It all adds up to a tall order for managers these days. Accenture’s Mirshokrai says supervising people is tougher now than it was when she first became a manager at the company about 15 years ago. That’s partly because of the rise of virtual teams and the communication challenges posed by managing at a distance.

Mirshokrai has 11 direct reports scattered across North America, Asia and Europe. Back in 1994, she ran a group of about a dozen employees located at a single client site. “We all sat together in one room,” she recalls. “You could tell by people’s facial expressions or moods how they were doing.”

Strong generational differences in the workforce today also are tricky. Mirshokrai has found that younger employees tend to want more frequent assessments. “Some people only want feedback twice a year. Some people want feedback two times a month. Some people want feedback on every interaction,” she says.

Given the demands put on managers, companies would do well to help them do their jobs well. At the same time, organizations should not home in on managers too exclusively, experts say. McGill University professor Henry Mintzberg says companies should fix corporate cultures that hinder managers as they try to lead teams.

For one thing, he calls for an end to incentive plans that single out individuals. He also says firms should stop axing employees casually every time quarterly numbers are missed. “A lot of the coldbloodedness of stock market pressure has driven a wedge between managers and employees,” Mintzberg says.

Kenexa’s Wiley agrees that firms seeking to engage and retain employees have to look at the bigger picture. The most important driver of engagement, Wiley says, is leadership that inspires confidence in the future. Focusing too much on managers, Wiley says, “takes the organization off the hook.”

If companies don’t do a better job putting the importance of managers in perspective, they might suffer more than just the disengagement and defections of individual contributors. They might find effective managers heading out the door as well—and taking teams of people with them who might help rival firms.

Rueff says he knows of cases in which leaders broke off from their companies with a group of employees and became a kind of business-unit-for-hire. “In the free-agent market, you’re already starting to see it,” he says.

Workforce Management, April 2010, p. 18-24 -- Subscribe Now!