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Break the Bureaucracy
December 01, 2006
Top-heavy management lowers employee morale
By Tali Arbel
Ben Swanson's second job out of college was an analyst at a Chicago branch of a major investment bank. In the entry-level position, he reported to his direct supervisor, his supervisor's manager and that manager's senior. The ratio of supervisors to personnel was high, he says, with swarms of managers tracking his work and the length of his breaks.
"I knew what my job was, but I got an e-mail from this woman three rungs above me telling me to get moving," he says. "After she sent that e-mail she stood over my desk—that made me so uncomfortable. It doesn't take too much of that before your morale just goes down."
The result of this micromanaging? Young hires felt they got no respect and so returned no loyalty, Swanson remembers. Within 18 months, he and 10 other entry-level analysts had quit. At his current job as an analyst in a Chicago credit-rating agency, it took a few months for him to adjust to the independence, but he feels respect-ed, he says, and thus invested in the company's success.
Swanson's experience is common in companies of all sizes. According to a study of small businesses by Gevity, a human resources consulting firm in Bradenton, Fla., and the Cornell University School of Industrial and Labor Relations, in Ithaca, N.Y., tight hierarchies and limited employee autonomy have negative business effects. Companies that reported direct monitoring and close supervision, and that did not create a trusting atmosphere, were more likely to have lower average revenue growth, lower profit and higher turnover than companies that facilitated self-management and created an emotionally connected workforce.
Direct monitoring of employees involves "a higher percentage of supervisors to employees, limited or no decision-making power in front-line employees, and technology to continuously monitor work," such as keystroke or telephone monitoring, says Cornell professor Chris Collins, main author of the Gevity study. Conversely, companies with looser management styles conducted more extensive introductory training and constantly gave informal, on-the-job feedback. And the successful companies in the study frequently used developmental, mentor-like monitoring rather than more rigid styles.
Cutting down on the micromanagement can have a large impact in a field such as sales, which is already besieged with high turnover. Charles Divine, now director of sales for telecommunications consulting firm Comstructure, based in Woodland Hills, Calif., left his old company last year after dealing with overbearing sales managers who constantly nagged him to speed up the sales process—even when it was impossible for his client. "You don't feel supported. [Management] is the obstacle, rather than the client. In the last two years they have gone through sixty very senior sales executives," he says. "The company is stable, but they're not growing. They've probably shrunk in terms of revenue."
The upside to giving reports more freedom, Collins says, is that your workforce is better able to make on-the-spot decisions, keeping workers happier and improving customer interaction. "[Employees are then] more committed to the company, satisfied with their job, engaged in the work they do," he says. "They are willing to do extra, help out colleagues who might be behind, and go above and beyond to help make customers happy."
Sales & Marketing Management Magazine
This article is brought to you by Sales & Marketing Management, the leading authority for executives in the sales and marketing field.
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