The Price We Pay for Bad Managers

“Currently, 30% of the U.S. workforce is engaged in their work … (while) the vast majority (70%) are not …” -- Gallup’s State of the American Workplace report

This statistic sent a shockwave through the business community when it was first published. But the Gallup report actually begins with another and equally important insight that deserves our attention. Gallup’s Chairman and CEO, Jim Clifton, opens the report by telling America’s business leaders: “The single biggest decision you make in your job—bigger than all of the rest—is who you name manager. When you name the wrong person manager, nothing fixes that

bad decision. Not compensation, not benefits—nothing.”

Clifton estimates that bad managers are costing the U.S. an estimated $450 billion to $550 billion annually through the active disengagement they create.

Why are there so many bad managers, and why are they doing so much damage? A 2013 article in U.S. News and World Report offered seven noteworthy reasons. Here are the top three:

1.     Managers were promoted into management roles because they were good at something else. As the article points out, “Management is often just the next rung on the ladder, but the skills needed to succeed at management are very different from the ones that got them this far.”

2.     They get little or no training in how to manage well. New managers often receive precious little guidance on “how to take on their crucial new role and are left to just figure it out as they go along.”

3.     Managing well is hard. It requires an understanding of challenging concepts such as “how to set goals that are the right mix of realistic and ambitious; how to give feedback that's clear, specific and actionable; how to stay involved without being overly hands-on; (and) how to hold people to high standards without being a tyrant,” among others.

Clearly, with losses of $450 billion to $550 billion a year, we need to choose our managers with greater care. Managing others is demanding and it requires a whole host of people and business skills that must be deftly exercised. If we’re going to give our managers every chance to succeed, they need better training and more coaching in the art of leading others.

Employers spent an estimated $62+ billion on training in the U.S. alone last year. But I’d be willing to bet that a relatively small portion of that went into training our managers to be better managers. It’s time we started making and taking that investment seriously.

Can Performance Reviews Actually Help You Improve Employee Engagement?

The simple answer is yes—if you leverage reviews to develop targeted learning plans for your employees. More on this in a moment …

Gallup’s most recent State of the Global Workplace report is an ongoing study of employee engagement in the workplace, and it contains more than a few striking statistics. Here are two

that hit us like a sledgehammer:

·       Only 13% of employees worldwide are engaged at work.

·       In the United States, 30% of employees are engaged at work.

The good news (if you can call it good) is that our domestic engagement rate tops the global average. But it still leaves a lot to be desired. A stunning 70% of our workforce is either only moderately engaged or outright disengaged from their work.

The Gallup Business Journal website recently published an article titled, “5 Ways To Improve Employee Engagement Now,” which is worth reading. It offers sound insights on how to gather truly accurate engagement data from your own workforce, where to focus your engagement improvement efforts, and why frontline managers are so critical in building and maintaining employee engagement.

Another powerful way to enhance your organization’s engagement levels is to leverage information from performance reviews to help you develop targeted learning plans for each of your employees.

This is an often-overlooked strategy for building engagement because many managers treat performance reviews as a mere formality or a necessary evil. The fact is every performance review is an opportunity—an opportunity for managers to develop and mentor their people, and an opportunity to gather crucial information about the areas in which employees excel and struggle. This information is developmental gold. It should be used as the basis for selecting learning curriculum that will build up strength and close skill gaps.

By developing targeted learning plans for your employees, you openly demonstrate your commitments to them. You actively support their personal and professional growth. And you significantly boost their chances of advancing within the organization.

This won’t go unnoticed by your employees. Indeed, they’ll reward you with their loyalty and a deeper level of engagement.

Performance Reviews for Heightened Employee Engagement: Yes? No? Maybe?

Unless you’ve been living under an HR rock the past several years or are in extreme denial, you’re aware of the link between employee engagement and job performance. (Of course, leading research organizations like Gallup and respected employee engagement survey companies like Modern Survey could have it all wrong.

We don’t think they do, though.)

What’s less certain is the role that performance reviews play in engaging employees. Can employee assessments help drive engagement? Should employers manage and attempt to improve employee engagement as a part of the review process?

The answer to both questions is the same: It depends.

But let’s start with what’s undeniable: A key part of workforce management is laying out goals and helping employees understand whether they’re reaching expectations. That’s a given, regardless of what you believe about the whole performance reviews-driving-engagement riddle.

Then look at setting and assessing employee goals through the lens of employee engagement. Guess what. Employees who are highly engaged are much more likely to feel they receive clear performance goals, that they get routine and valid feedback about their progress toward those goals, and that their managers are actively involved in the process.

In fact, of the six steps that Gallup’s 2013 State of the American Workplace offers for improving employee engagement, three are related to setting and tracking goals for employee performance. “Managers who focus on their employees’ strengths,” the report says, “can practically eliminate active disengagement and double the average of U.S. workers who are engaged.”

Going a step further, researchers at the University of Toronto and University of Guelph concluded that performance management absolutely should evaluate and focus on employee engagement in addition to job performance.

“Making employee engagement part of the performance management process not only makes it an ongoing and constant issue rather than a once-a-year survey, it also signals to employees that it is important and the organization is committed to improving the engagement of its employees,” according to paper co-author Alan Saks.

So, should you try to improve employee engagement as a part of the review process? The odds seem to say you should. But even if you think it makes sense, you’ll need a performance review system that makes it possible to include key drivers of engagement in the performance review process.

A Web-based, automated solution like Reviewsnap makes the employee performance review more strategic. As a result, everyone involved sees the same goals, and you’ll see better results and increased engagement.