Managers Set the Focus
What are the implications of this research for managers and their organizations? Perhaps the principal lesson is that although managers may not be aware of it, or may be only subtly aware of it, they are lenses through which others perceive the organization. The performance of managers not only has an obvious impact on the quality of day-to-day production achieved by a work group or department but also creates a subtle domino effect that reverberates across the entire organization and plays a large role in determining how successful that organization will be. Following is a look at two areas in which employee satisfaction with organizational climate can help make or break companies in today's ever more competitive marketplace.
Recruiting and Retaining Employees
With the U.S. unemployment rate hovering at around 4 percent at midyear, human resource managers are well aware of the challenges their companies face in finding and keeping good workers. With both current and prospective employees increasingly able to pick and choose which company to work for, organizational climate has become high on the list of priorities as people make decisions on where to work and for how long. More and more, employees are connecting not just with the job itself but with their overall perception of the organization.
Those companies whose organizational climates suffer in part because of low-performing managers are at a disadvantage in retaining valued employees, who see more attractive climates elsewhere. Higher-performing managers may be better at creating a climate that fosters the type of commitment and dedication to the organization that keeps employees from jumping ship.
One might guess that organizational climate would not have as great an impact on the ability to recruit, because prospective employees might not have a firm handle on how a company is perceived by those already in the organization. But recruitment is affected. Increased media exposure, among other factors, has made most of today's companies open books that often can be read more objectively by those on the outside than by those on the inside.
Low-performing managers put their companies at a disadvantage in retaining valued employees.
Two of the survey categories in which subordinates of the lowest-performing managers were less satisfied than those who worked for the highest-performing managers were pay and benefits. The survey participants were asked whether they believed their pay to be fair, directly related to their productivity, and comparable with the compensation provided by other companies. They also were asked whether they believed the company's benefits met employees' needs. Certainly, pay and benefits are two of the primary factors affecting an organization's ability to attract and hold onto top employees. The difference between the satisfaction levels on these two scales felt by the people who worked for less effective managers and by the subordinates of more effective managers is perhaps the most telling indicator of how powerful the effect of managerial performance on employees' views of the organization can be. For although pay and, especially, benefits are fairly standardized in most companies according to job title, duties, and longevity, in this instance there was a gap in the way pay and benefits were perceived that was tied to the effectiveness of the manager.
A gap in the way pay and benefits were perceived was tied to managerial effectiveness.
Employee Stress and Health
The American Institute of Stress, in Yonkers, N.Y., estimates that one million U.S. workers are absent on an average workday because of complaints related to stress. Surveys and research conducted by the institute over the past ten years also show that stress causes adverse health effects for more than 40 percent of adults and that as many as 90 percent of visits to doctors are for disorders related to stress. Numerous studies have shown that stress is a major contributor to heart disease.
There are steps people can take away from their jobs to counter stress, of course, such as eating right and exercising. But when the primary source of stress is the job, such steps can be only partial or temporary mitigators.
The costs of job-related stress are far-reaching and steep. Beyond the obvious toll on the lives of individual workers, there is a long list of negative effects on their organizations. These include poor productivity and decision making, high costs for health insurance and for replacing absent or disabled workers, and high accident rates. Such stress-related problems trickle down through the national economy and hamstring it.
CCL's research found that subordinates of the highest-performing managers reported being more satisfied under the category of “stress-free” than did subordinates of the less effective managers.
Participants were asked about their perceived levels of job stress, the effects of stress on employee health and productivity, and any outlets available to help workers deal with stress. Questions that were part of the survey's other scales also appear to have a direct bearing on stress levels, however. For instance, the subordinates were asked whether their tasks were enjoyable, important, diverse, and interesting; whether the organization gave equal opportunity for advancement and promotion to people of different races, nationalities, and religions; whether communication channels were open and workers were kept well informed about happenings in the workplace; and whether the organization was ethical at all levels. On all these issues, the subordinates of the highest-performing managers reported higher satisfaction levels than did the people who worked for the lowest-performing managers.