December 14 , 2017

Develop A “Bad Manager Identification Process” … and Stop the Pain of “Corporate Depression”

Smelling Bad Managers

Let me state upfront that I literally “hate” bad managers. I know that hate is a strong word but I do detest their egos, arrogance and the “silos” they create, but most of all, I detest the damage they do to hard working employees that deserve better. I also have a unique ability to “sense” and even “smell” bad managers when I walk into a corporation. Now you might be amazed by this ability but sensing bad managers is actually easier than you think. Because bad managers are everywhere at bad firms… you could probably throw a “dart” at random and hit one. Next, even at good firms, bad managers can be identified indirectly by the impact that they have on others even when they’re not around. You can see and even hear it when you enter the workspace though the lack of energy, ollaboration and passion displayed by the employees. Other indicators of bad managers include the fact that employees appear to lack direction, and are visibly indecisive because they can’t make a decision or even take the slightest risk without physically seeking out their boss for approval. These “bad” managers cause great harm by stifling innovation, risk-taking and rapid decision making. They lower morale, increase turnover and build their own little selfish “empires” or silos. Another quick indicator that you are in the workspace of a bad manager is that the manager only spends only a small portion of their time on the people management aspects of their job.

It’s important to note that the cumulative damage that these jerk managers can do could run into the millions. I estimate that the damage an individual manager can do can in some cases, exceeds 10x their annual salary. While many surveys indicate American corporations are full of bad managers, one study said 40% of managers were bad, we must admit that even if only one in ten were bad, the damage would be significant.

It’s easy to understand why bad managers are so abundant, after all, there are no certifications required or education required to become a manager. Most are promoted into management because they are the best at leveraging their current skills, and not because they display great management aptitude. Unfortunately, the skills required to be a great “people manager” have little to do with a person’s specialized skills. The end result is that many firms now have a significant portion of their managers that “stink” as people managers. What is needed is a formal process for identifying and fixing bad managers. With the economy cooling down, now is the opportune time to tackle this problem.

I’m not alone in understanding the need to identify these weak or bad managers. Major firms like Dell, FedEx, Monsanto, MGM Grand, GE and IBM have a set of processes to either identify weak managers or to minimize the negative impact that they can have on business results. The question that needs to be posed and answered is… “What can your organization’s HR department do to identify bad managers? In the 4 parts of this article I will highlight:

  1. why managers are HR’s delivery mechanism,
  2. the many problems caused by bad managers,
  3. the ways to identify bad managers, and
  4. the actions required once bad managers have been identified.

Part I – Why Managers Have Become HR’s “Service Delivery Mechanism”
Up until about a decade ago, HR had been a “hands on” function. However with HR’s increasing focus on becoming more “strategic” HR has been shifting it’s focus toward “big picture” items and pushing more and more of the day-to-day administration of labor onto employees and managers through self-service models. One recent study by a large firm showed HR spending 83% of it’s time on HR administration and only 5% of its time actually dealing with employees. An illustration of this shift has occurred in recruiting. Although HR still designs and manages the over-all hiring process, it generally no longer has the time to sit in on parts of the process, like individual interviews, as it did in the past. Instead, now it is the operating or line manager that actually “does” the interviewing and the selection of the finalists. This increasing reliance on managers to “deliver” information and services is not just true in HR but it’s also true in finance and marketing etc. As you become more strategic, you have to rely on others both inside and outside the organization to “do” the operational aspects. In the case of HR, individual managers and supervisors have over time; gradually become the primary delivery mechanism for “people management” services.

As a result of this shift, almost everything that HR tries to do is directly impacted by the actions of individual managers. No matter how well designed the process, if an individual manager ignores the policies (or tells employees to), skips steps or introduces personal bias into the process, then the end result of the process will be weak. Well designed HR programs and processes can only have their desired impact if the line managers and supervisors implement them correctly on a day-to-day basis. That’s exactly why having great managers and supervisors are now so critical to HR’s mission. It’s no longer just a few employees suffering as a consequence of bad managers, now HR literally can not accomplish it’s goals without effective managers in every slot.

Part II – Business and HR Problems Caused By Having “Bad Managers”
The chances are high that you yourself have worked for at least one bad manager in the past because almost every company of any size has more than a few of them. But before any action can be undertaken, you need to be able to show the economic impact of keeping these morale busters. I estimate that up to 70% of the reasons for people management process errors (like turnover, bad hiring, low productivity and low levels of innovation are directly impacted by the actions of individual managers. Research by the Gallup organization illustrates that point, at least as it relates to retention, when they concluded that…

“No one ever quits a company, they quit their manager”

Unfortunately, few HR departments have taken the time to assess and then to quantify the negative impact that having bad managers can have both on the people management aspects of a company and on its business results. I have found that no firm will even consider investing HR resources in identifying or fixing “bad managers” until they first identify the many negative “business impacts” that these “bad managers” can cause. I recommend that work be done directly with the CFO’s office, risk management and the 6 sigma team to quantify in dollar terms the negative impact of keeping bad managers. If you don’t have the time to do a complete assessment, here is a listing of some of the possible major negative impacts that bad managers can create:

Decreased innovation — As competition increases and the time it takes for organizations to copy each other’s successful products and processes decreases, it is critical for organizations to shift their focus from merely being efficiency focused to being more creative and innovative. Unfortunately, bad managers are innovation “killers” that dramatically slow an organization’s product time to market. They routinely stifle new ideas and innovators by squashing an individual’s willingness to take risks by bad mouthing new ideas or delaying them until frustration sets in. Great managers encourage change, calculated risk taking and innovation, while in direct contrast bad managers are “innovation blockers”.

Weak hiring — Bad managers are often insecure and as a result they resist hiring people that might challenge their authority or that might even be considered qualified enough to serve as their replacement. “A” level managers tend to hire “A” players with complementary skills, while unfortunately, “B” level managers have a bad habit of hiring “C” level hires. It’s also true that, because top performers can detect bad managers easily during the hiring process, bad managers are seldom successful (even when they sincerely try), at hiring those that are above average performers.

Lower employee productivity — Most individual managers that could be classified as “bad” have little understanding of the factors that impact employee productivity. Many bad managers also lack the “soft skills” like empathy, coaching and feedback that are necessary to get the most out of their employees. Google for example has found that a top technologist can be worth 300 times more than the average one. But if “A” level players are saddled with “C” level managers, productivity is unlikely to meet those expectations.

Increases in turnover — Bad managers drive people from the organization. A senior manager at Cisco once told me that he concluded that “managers control up to 85% of the reasons why people quit their jobs”. If employees leave for a “better job”, it’s important to note that a manager controls between 75% and 85% of the typical “better job” factors (i.e. more challenge, faster learning, development opportunities, praise and more control and decision making).

Slowed employee development — With major problems like globalization and the aging workforce facing them, it’s clear that most organizations will need significant help in developing their leadership bench strength. Unfortunately, the task of identifying those with high potential and establishing development plans for them are generally done by an employee’s manager. If the manager involved is a bad apple, they are likely to “hide” and even “hoard” any top talent. Why? In order to selfishly improve their own personal “numbers”, rather than “releasing” these talented employees, so that they can grow and help other parts of the organization. If you want fast leadership development, you can’t have bad managers impacting the process!

Lower motivation — Motivation is a critical factor in productivity and managers are often the prime deliverers of motivators in an organization. Unfortunately, I have found that when you ask weak manager’s to list their own perception of their people management responsibilities, almost none will even mention motivation as one of their key responsibilities. Because corporate compensation can only do so much to motivate employees, it’s critical that each manager be educated about and then that they frequently use each of the available nonmonetary motivators (such as individual praise, recognition or even direct feedback) that are available to them.

Little direction and not enough planning ahead — Bad managers seldom set clear goals and communicate their expectations clearly. As a result, their employees are frequently confused about the appropriate direction that they should take, what are the key priorities and what results will be measured and rewarded. This lack of direction causes employees to spend time and resources in unimportant areas and to waste a significant amount of time trying to figure out “what to do next”. In addition, because bad managers seldom do any workforce planning of “if-then scenario” planning, their employees are frequently “surprised” by people problems that should have been forecast and prepared for.

Too many legal issues — HR departments frequently spend millions on people management systems and processes that are designed to minimize any potential legal risks to the firm. Unfortunately, if managers don’t participate in training on those systems, don’t follow the prescribed rules or if they fail to sufficiently document their actions, all of that preparation by HR will be in vain. Everyone that has ever spent any time in employee relations knows that missteps or inactions by individual managers are the foundation of a majority of employee initiated complaints.

Now let’s shift our focus away from the problems that they cause and towards the many different ways to identify the bad managers within a firm.

Part III – The Various Ways to Identify “Bad Managers”
Most executives already understand the problems that bad managers can cause, but few have done anything to seek them out and minimize their potential impact on the business. Before you begin searching for your first bad manager, you should know the specific “indicators” or factors that separate the bad ones from the good ones. Indicators can fall into broad categories like bad behaviors/ actions, weak knowledge, a lack of skills, varying from procedures, poor decisions or below average metrics. Many of these identifiers are based on observation and data, while others are based on opinion.

Examples of inappropriate behaviors that indicate you have a bad manager vary with the firm but start by looking for micromanagers, those that criticize employees in front of others and managers that won’t accept honest feedback. Look for managers that restrict opportunities to learn, withhold information and pit team members against each other. Those that don’t seek employee inputs on decisions, that spread praise/ rewards equally and that don’t let their employees make independent decisions or take risks should also be identified.

The best processes for finding bad managers use multiple assessment measures using several proven approaches which can produce an index rating for individual managers. An index (like the Dow Jones Index) allows you to easily compare managers in completely different departments. GE uses the 4 E’s to assess managers on four different factors. Falling index scores can also be used as an early warning system or “smoke detector” that warns you in advance long before a particular manager’s people management results turn sour.

Identification Approaches to Consider
Obviously for “image” reasons, the processes that the top firms use are seldom formally called “bad manager identification programs”. Instead, they may be called individual dignity scores, engagement assessments or even morale/ satisfaction surveys. Mmany firms utilize some of the same tools but for some reason, they are not used for the direct purpose of identifying evil doing managers. Although it might seem like a difficult task, it is actually relatively easy to select and use the any effective processes for finding these “bad apples”. Here are eleven different approaches that can be used independently (or in combination) to at least initially identify those, that upon further observation, will eventually be labeled as bad managers:

  1. Just ask – Finding bad managers can be as easy as asking, because almost everyone knows who they are. If you ask employees (using a process in which they believe they can be candid) “Who are the bad managers?,” employees can almost always name them with little delay. Managers themselves, almost without exception, know who the bad managers are, not just by the results that they produce but also by the behaviors that they have witnessed. You can also ask “superknowers” (individuals that are informally well connected within your firm) to informally identify any well known “bad managers”. Finally, you can hold employee focus groups (run by facilitators) and ask employees there.
  2. Conduct a BMID survey – Rather than asking individuals directly, firms can use a BMID survey (Bad Manager IDentification survey) to identify the managers that exhibited the bad behaviors and the actions that are associated with bad managers. Dell for example has an excellent multi-factor employee survey. It was developed (as one senior manager put it) because the firm’s rapid growth resulted in rapid promotions of managers that could unfortunately become “little dictators”. Anonymous surveys can be sent electronically to every employee in the firm or to a random sample of employees. Another option is that the surveys can only be sent to the employees within poor performing business units.
  3. Use post-exit surveys – Although commonly used, most traditional exit surveys result in very little usable and accurate information about why the individual is “really” leaving (especially if the underlying cause is their direct manager). A superior alternative approach is to develop a process to contact key individuals three to six months after they have left the organization (this is often done by a third party firm). Next compare the reasons for leaving from the post-exit survey to your traditional exit interview reasons, to see if the “delayed” answers are more accurate and more revealing of management failures.
  4. Make it your generalist’s job to ID them – HR generalists interact more with managers than almost anyone in HR and as a result, they are generally well aware of which managers are struggling or excelling. Train them on the key indicators and then ask them twice a year to force rank the good/ bad managers in their business unit. Be aware that sometimes a generalist’s loyalty to (and even friendships with) individual managers can cloud their judgments or reduce their courage and their willingness to speak-up. Others in HR that might also be able to serve as anonymous “spotters” of bad managers through their interactions with them include recruiters, employee relations specialists and compensation specialists (that see no differentiation in the rewards that an individual manager hands out).
  5. Utilize a manager “business results” as an indicator – It’s hard to produce great business results over a long period of time and still be a jerk manager. Thus another effective indicator that you have a “bad manager” is consistently below average results in already measured business goals like revenue, innovation, customer service, productivity and error rates. It’s wise to compare good and bad managers in similar jobs in order to identify which specific individual business metrics are the best predictors of bad management behaviors.
  6. An opportunity to step forward – The very best processes provide managers with an opportunity to come forward, on their own, to seek help when they realize they are floundering. If there is little chance of improvement or when the manager lacks the interest to remain a manager, there should be an option to gracefully “opt out” of a management position.

The remaining identification approaches rely on existing HR data and processes

  1. Use existing employee surveys – Rather than designing a brand new “bad manager identification survey” instead, consider utilizing existing employee surveys to help you identify possible turkeys. Quite often the already existing surveys that cover morale, engagement, employee satisfaction or 360 degree feedback provide information that can help you pinpoint bad managers. It’s important that you track the survey results down to the team level (with coded numbers), so that you can identify by name which managers are producing the negative survey results. Because they are opinion based, you should also attempt to correlate these surveys scores with other data based or observation indicators, in order to make sure that they are accurate indication that you have really found a bad manager.
  2. Utilize existing manager “people performance” metrics – Another effective way to identify bad managers is through your standard HR or people management metrics. In almost all cases, bad managers will have higher rates of absenteeism, preventable turnover, grievances, offer rejections, low “fire” rates, low differentiation in rewards and slower “time to fill” hire times. Managers that have themselves been promoted rapidly and that have received larger than average bonuses are most likely to turn out to be good managers.
  3. Track referral rates – It turns out that employees will not refer their colleagues to a job opening that is supervised by a bad manager. As a result, by tracking referral rates by manager or to jobs supervised by a particular manager, you can use any significant negative variation (from corporate wide referral rates) as an indication that you probably have a manager that is viewed as “bad” by your current employees.
  4. Use performance appraisal scores – Although not all management performance appraisal systems are 100% accurate, the best ones can be used to give you a general indication as to whether you have a good or a bad manager. Also, if you currently use them, forced ranking systems, MBO processes and data based appraisals are generally processes that provide the most accurate indicators.
  5. Utilize their leadership development / promotion assessment scores – Often you can identify weak managers by their own performance during leadership development and training activities. Their scores on development projects, stretch goals, simulations or “if-then” scenarios are better indicators of their management capabilities than tests or classroom assessments. It might also be possible to convert your current standard promotion processes into one that is a more rigorous assessment of management actions and capabilities. Then the promotion process itself can be used to at least freeze the further promotion of existing bad managers.

Part IV – After you identify them, what’s next?
Most of the better “bad manager identification” processes go beyond just initially identifying bad managers. The processes go the next step and identify the individual factors that make a particular manager “bad” and offer solutions in an attempt to “fix” such. The best improvement approaches include project assignments, two in a box position sharing, leadership training and mentoring/ coaching. If these options don’t work, the next step can be to isolate them on a separate career track, where they don’t directly manage others.

Finally, for those in HR with the courage, the final step but least commonly used approach is to involuntarily release them (and perhaps subtly make them aware of similar openings at your competitor). Unfortunately, I have found that at most firms (GE being a rare exception), a bad manager is statistically more likely to “die on the job” then to be forcibly removed as a result of termination actions initiated within HR! Sad but true.

About Dr John Sullivan

Dr John Sullivan is an internationally known HR thought-leader from the Silicon Valley who specializes in providing bold and high business impact; strategic Talent Management solutions to large corporations.