How Does Management Affect an Organization’s Performance?

Managers are the face of the company. Through their actions and words, managers help the employees understand the company's values, goals, and vision and, at the same time, represent the company to the outside world and its different stakeholders. Good management can do wonders for the company.

A good manager will ensure that the company is profitable and growing in tandem with everyone else. Good management will ensure good human capital resources become the company’s unique selling proposition in this cutthroat market environment.

Why Does Bad Management Happen?

Bad management happens because companies employ individuals with top contributions to sales or targets as managers. They naturally assume that someone who is good with the technicalities of the work will be able to manage the team better and be more reliable. However, they fail to understand that the most important duty of a manager is to manage people.

Managers who are successful at their work need to have qualities like

  • Empathy

  • Communication skills

  • Influential power

  • Free from biasedness

  • Reliability

  • Trust, integrity, and others

What do Bad Managers Do?

Managers, both knowingly and unknowingly, create poor working conditions for their employees. Here we will be listing down some of the ill habits that a manager has that create a negative and unhealthy working atmosphere for the employees, which in turn also destroys the performance of the organization.

  • Setting unrealistic goals for their employees and forcing them to meet them.

  • Not being empathetic toward employees.

  • Employees are expected to be available for work 24 hours a day, seven days a week, with no room for work-life balance.

  • Discouraging employees.

  • Not maintaining the basics of courtesy or communication rules.

  • Delegating responsibilities to employees.

  • Blaming employees for their incompetency and mistakes.

  • Never letting employees take credit for their work and hamper their future prospects in the company.

  • Never let the employees’ grievances be heard by the top authorities.

  • Bad management discourages room for innovation and development.

We are all familiar with the fact that employees leave their managers and not their companies. In a survey, it was found that more than 70% of the employees leave the organization because of the management. On this note, let's dive deep into the negative effects bad management can have on the performance of the organization and its working employees.

  • High Employee Turnover − Bad management ensures that employees leave the organization as soon as they get the chance. This in turn increases the employee turnover ratio. A high employee turnover ratio not only deteriorates the goodwill of the company but also leads to huge costs. A lot of costs are involved in hiring employees. The cost is expressed in terms of

    • Recruitment teams’ salaries are low because they are only involved in doing replacements and cannot develop other crucial strategies

    • Billing hours that the business team spends on conducting interviews

    • Terminated employee’s salary given to him during the knowledge transfer (KT) period or during their training tenure

    • delay in project deliveries

  • Low Employee Morale − A manager who barks at the employees or is closed towards ideas, suggestions, and empathy decreases the morale of the employees. It gets difficult for the employees to suggest better techniques or even meet their set goals with efficiency. Employees become scared and choose the "fleeing away" option every time.

  • Risk of Legal Issues − Bad management also opens the possibility of legal issues or non-compliance cases for the company. A demotivated, humiliated, and dissatisfied employee may charge the company for the emotional and mental damage that has been suffered. This will deteriorate the company's image in front of the larger community and be an invitation to huge legal costs.

  • Decreased Productivity of Employees − The major drawback of bad management is the loss of productivity of the employees. Bad management creates an unhealthy working environment for the employees, which makes them unhappy, dissatisfied, and inefficient. This in turn causes −

    • Delay in client deliverables

    • A lot of errors in project deliveries

    • Unhappy employees generally do not communicate with clients or customers in a proper manner, thus affecting the organization badly

  • Gives Competitors an Advantage − A company involved in an internal feud will have no time to develop strategies, understand the market, or give its best. This will give the competitor an edge to win over other consumers with their products and processes.

  • Decreased Profits − A company that could hardly meet the deliverable because of the ever-changing workforce will not be able to create profits. Its workforce attrition is going to keep it employed. This will ultimately lead to decreased profits.

  • Loss of Face and Business Failure − The company is going to lose its face in the community, and the consumers might even boycott their products and services. There will be no future youth who want to be associated with the company. Finally, the company will be closed down for good.

  • Waste of Resources − A lot of company resources will be wasted because the dissatisfied employees will not ensure that they are efficient; they will always aim at the bare minimum till they get their way out of the company. This will lead to huge losses for the company.,

The Concept of Good Management

The roles and responsibilities of a manager may vary depending on the industry, the size of the company, market demands, the organization's product, and other factors, but we can easily categorize a good manager's activities in the five pointers listed below −

  • Set Goals and Objectives − A manager should be clear about the goals or objectives that must be met for the business to succeed. A goal should always be smart.

    • S- Specific

    • M- Measurable

    • A- Achievable

    • R- Realistic

    • T- Timely

  • Organize − A manager should be able to divide a large goal into smaller ones. These goals are now delegated to different employees as per their competency, interests, and availability.

  • Motivation and Communication − A manager should be able to communicate effectively. A manager is an intermediary between the grass-roots employees and the top authorities. Clear, unbiased communication is a must. At the same time, they should be able to motivate or push the employees toward fuller utilization of their capabilities.

  • Measure or Monitor − After the goals are assigned, it is very important for the managers to measure and monitor the progress of the work. Timely, accurate, and relevant feedback helps employees deliver better outputs.

  • Develop Staff − Finally, a manager should always aim at developing their staff. There is much more potential in human beings than in the given job description, and it is the duty of the manager to ensure they can achieve it. They should believe in creating CEOs and CTOs for the company from within the organization.

To be profitable and successful in the long run, top authorities must understand that they cannot keep going with bad management. Instead of suffocating others, they must eliminate bad management from the system or provide opportunities for them to make individual contributions and grow. A good manager may seem like a cost, but it is an investment by the company for both the short and long runs.