A recent article I read in the November edition of Credit Union National Association (CUNA) newsletter stated something that I think all leaders should know instinctively, but apparently don’t: “Bad Bosses are Toxic to Organizations” (Credit Union National Association, 2012). I think that every person who has worked outside the home has, at one time or another, had that bad boss. The one that made waking up to go to work an effort, who made you wish every day that you could quit. And what do most people who have this type of boss do? Eventually they find work elsewhere. This loss of talent can be an expensive proposition for any organization. According to William G. Bliss, of Bliss and Associates Inc. Consulting Firm, the cost of one replacing one employee can cost a business 150% of their annual wages, even more if that employee is in a managerial or supervisory position (Bliss, n.d.). He put this into bottom-line terms by giving the following example:
“To put this into perspective, let’s assume the average salary of employees in a given company is $50,000 per year. Taking the cost of turnover at 150% of salary, the cost of turnover is then $75,000 per employee who leaves the company. For the mid-sized company of 1,000 employees who has a 10% annual rate of turnover, the annual cost of turnover is $7.5 million!” (Bliss, n.d.)
This estimate includes costs associated with recruiting a replacement, training a new hire, lower productivity of a new hire and of temporary staff, new hire costs, and loss of business costs; however, it does not take into account the loss of productivity and of absenteeism of the dissatisfied employee prior to their departing. According to CUNA, bad bosses drive employees to have higher absenteeism, lower productivity, and higher medical costs due to increased stress (Credit Union National Association, 2012). Their answer – have businesses invest less into leaders and leadership training, and more into developing managers (Credit Union National Association, 2012). They assert that the skills associated with being a good boss are more easily learned than that of a good leader, noting that good bosses just need to communicate well. Employees respond best to outlined performance expectations, clear definitions of how their job or department impacts the organization as a whole, and constant feedback on their performance (Credit Union National Association, 2012).
This requirement for increased communication skills bleeds across all of the leadership styles that we have studied this term, but the idea that leaders need to mentor followers in how they communicate, is new somewhat new. I can’t help but agree with the idea of better manager-subordinate communication, as I have been in the situation where I was not getting the feedback or guidance that I needed to succeed. Nothing is more frustrating to an employee than trying your best to achieve what you believed was your goal only to be told you are way off the mark – all with no guidance from your supervisor to begin with. How can one succeed without knowing which road to take or how well you are doing in traveling that path? For me the answer was simple – leave that toxic boss behind and get a new job, one with a boss that knows how to manage.
Cassandra
Another interesting article on leaders being followers:
http://www.forbes.com/sites/augustturak/2012/07/17/the-11-leadership-secrets-you-never-heard-about/
Works Referenced
Bliss, W.G. (n.d.) Cost of Employee Turnover. Retrieved December 15, 2012 from iSquare.com: http://www.isquare.com/turnover.cfm.
Credit Union National Association (2012). Bad Bosses are Toxic to Organizations. Credit Union National Association eScan Newsletter, 38(11), 5-6.