Like vital cogs in a machine, managers are the points around which everything else turns in a company. These head honchos are key players that supervise, oversee, control and guide by example. If, however, these cogs break down, it can upset the balance of the entire system and cause the other, smaller parts to come undone.
This machinery metaphor is backed by the recent Salary and Employment Insights 2014 Greater China report by global talent solutions firm Hudson. Completed in November, 2013, the report, which questioned 1,274 employers and 1,515 employees in Hong Kong and China, about their experiences and views on leadership, employment expectations and other issues, found that 49 per cent of employees rated their current manager as “average”, “poor” or “very poor”.
“Poor managers undermine business performance,” says Tony Pownall, general manager of Hudson Hong Kong. “According to our survey, poor managers are bad for employee morale, reduce productivity, negatively impact employee retention and hinder an organisation’s efforts to attract the best people.”
The top five reasons why Hong Kong employees rated their managers poor or very poor were: poor people manager; poor communication and lacks transparency; poor task manager; fails to provide employees with career development opportunities; and treats employees unfairly.
Paul Collins, director of architecture at design, architecture, engineering and planning firm HOK, echoes the results of the survey when discussing common managerial mistakes. He says bad managers lack accessibility and clarity, do not explain things properly and are too slow to correct performance issues. “Directors and managers need to give clear instructions and communicate in an unequivocal and concise manner,” he says.
“Managers are team members and must be accessible to the rest of the team,” he says. “This increases communication, team spirit and the staff’s confidence that the management is listening as well as directing.”
Hudson’s survey found a correlation between leadership skills and employee motivation and morale. Of those respondents who rated their current manager as poor or very poor, 87.5 per cent said they were demotivated and 45.3 per cent reported a decline in productivity. On the other hand, among employees who rate their manager as “good”, 67 per cent said they were motivated and engaged, with 46.9 per cent citing increased productivity.
Meanwhile, two-thirds of employees who rated their current manager as poor or very poor said they were considering leaving their job, while 41.3 per cent of those who rated their current manager as good said they planned to stay in their job.
Collins says poor managers drive out good staff. “Team leaders set the tone for the working environment and if that tone is divisive, dictatorial or non-inclusive, it becomes a disincentive to people to stay and develop their careers with the company,” Collins says. “Good managers identify, encourage and mentor capable staff members and contribute enormously to staff retention.”
The damaging effects of poor managers are not limited to current employees, Pownall says. “Of candidates surveyed, 75.3 per cent said they would reject a job offer if they felt the quality of their potential manager was below standard. On the other hand, happy and satisfied staff are more likely to help create a positive company culture that, in turn, helps attract more employees like them.”
The quality of the management can also have a direct impact on directly affect profitability. Writing in the HRM Asia news forum, Sureish Nathan, the former vice-president and managing director for Asia-Pacific at the Centre for Creative Leadership, says companies that rate highly for invest highly in human capital deliver stock market returns five times higher than those of companies that invest less. “Leadership development builds capacity to reduce costs, drive new lines of revenue, and improve customer satisfaction,” he said
The majority of respondents – 56 per cent in Hong Kong and 79.4 per cent in China – also said they would prefer greater investment in leadership development programmes to a standard pay increase. This shows that financing leadership training can benefit staff at every level and have a positive impact on a business’s bottom line.
A good leadership programme, Collins says, should provide a support network to managers and be both professional and relaxed. “Formal training programmes are useful, including refresher courses for even senior staff. Sharing experience between managers in informal meetings is a good way of quickly communicating best practice actions and fostering a team atmosphere among managers.”
Pownall agrees: “Companies need to have an effective leadership development programme combining formal and informal training, coaching and mentoring, to ensure they have great leaders to meet business needs,” Pownall says. “Great managers deliver higher stock market returns.”
