The Bottom Line May Backfire on Bosses
Supervisors who are only driven by profits could actually be hurting their bottom lines by losing the respect of their employees, who counter by withholding performance, according to a new study.
“Supervisors who focus only on profits to the exclusion of caring about other important outcomes, such as employee well-being or environmental or ethical concerns, turn out to be detrimental to employees,” said lead researcher Matthew Quade, Ph.D., assistant professor of management in Baylor University’s Hankamer School of Business in Waco, Texas.
“This results in relationships that are marked by distrust, dissatisfaction, and lack of affection for the supervisor. And ultimately, that leads to employees who are less likely to complete tasks at a high level and less likely to go above and beyond the call of duty.”
For the study, researchers surveyed 866 people. Half were supervisors, the other half were their employees. Data was collected from those who work in a range of jobs and industries, including financial services, health care, sales, legal, and education, the researchers report.
Researchers measured supervisor bottom-line mentality (BLM), employee BLM, task performance, and leader-member exchange, the rating employees gave of their relationships with their supervisors.
Employees rated their supervisors’ BLM by scoring on a scale statements like: “My supervisor treats the bottom line as more important than anything else” and “My supervisor cares more about profits than his/her employees’ well-being.”
They rated leader-member exchange via statements such as “I like my supervisor very much as a person” and “My relationship with my supervisor is composed of comparable exchanges of giving and taking.”
Supervisors rated their employees by scoring statements such as “This employee meets or exceeds his/her productivity requirements,” “This employee searches for ways to be more productive,” and “This employee demonstrates commitment to producing quality work.”
The researchers discovered:
- high-BLM supervisors create low-quality relationships with their employees;
- in turn, employees perceive low-quality leader-member exchange relationships, so they reciprocate by withholding performance;
- when supervisor BLM is high and employee BLM is low, the damaging effects are strengthened;
- when both supervisor and employee BLM are high, the negative performance is still evident.
According to Quade, the last finding was particularly significant because it contradicts a common belief that when two parties think alike and have similar values, there will be a positive outcome. Not so in the case of BLM, according to the study’s findings.
“When supervisor and employee BLM is similarly high, our research demonstrates the negative effect on performance is only buffered, not mitigated, indicating no degree of supervisor BLM seems to be particularly beneficial,” the researchers wrote in the study, which was published in the journal Human Relations.
“It seems even if employees maintain a BLM, they would prefer for their managers to focus on interpersonal aspects of the job that foster healthier social exchange relationships with their employees in addition to the bottom line.”
If bosses believe a negative dynamic regarding BLM exists in their organization, the researchers suggest a few steps:
- be cautious of a BLM approach or emphasizing bottom-line outcomes that could neglect other organizational concerns, such as employee well-being and ethical standards;
- managers should be aware of the message they pass along to employees (and the possible performance repercussions) when they tout bottom-line profits as the most important consideration;
- 0rganizations that need to emphasize bottom-line outcomes should consider pairing the BLM management style with other management approaches known to produce positive results, such as practicing ethical leadership.
“Supervisors undoubtedly face heavy scrutiny for the performance levels of their employees, and as such they may tend to emphasize the need for employees to pursue bottom-line outcomes at the exclusion of other competing priorities, such as ethical practices, personal development, or building social connections in the workplace,” the researchers said in the study.
“However, in doing so they may have to suffer the consequence of reduced employee respect, loyalty, and even liking.”
Source: Baylor University
Wood, J. (2019). The Bottom Line May Backfire on Bosses. Psych Central. Retrieved on September 17, 2020, from https://psychcentral.com/news/2019/07/28/the-bottom-line-may-backfire-on-bosses/148964.html