The cost of a bad boss

A small toy business man stands on a desk.
Bad bosses cost everyone — the worker, the organization, the larger economy, everyone.
Ben Dalton via Flickr

The great resignation is being attributed to the pandemic, but we know that some of you are quitting because you’ve had enough of your boss. Bad bosses are expensive — and not just because turnover costs money. There are hidden prices to pay when a manager is ineffective or downright damaging.

Washington Post columnist Michelle Singletary suggests that part of the popularity of Ted Lasso is that he’s everyone’s dream boss. Michelle joined host Angela Davis to talk about the high cost of a bad boss for everyone who has to deal with the offender.

And our regular Monday guest, Chris Farrell, helped us understand how bad bosses affect the national and even the global economy, plus Le Betty Zhou from the Carlson School of Management at the University of Minnesota weighed in on self-regulation at work.

Bad bosses take a toll on employees’ mental health

Farrell explained that after quitting a job in a toxic work environment, research shows that it takes about 22 months for a former employee’s stress level to return to a healthy range. Poor management has been linked to an employee's mental health. 

“I’ve been in education for over 34 years, in the same building for 17,” Kim, a listener from Plymouth, Minn., said. “I had a great working team. And there was a new boss that came in and, all of a sudden, the years of communication, the years of knowing what was going on and also being tapped into as a resource myself … Suddenly, everything was radio silence. And I started feeling very disconnected from being able to participate and being told things, but then later being told ‘No, I never said that to you.’ A sense of gaslighting almost occurred, where you’d lose trust in yourself ... I suddenly felt like I didn’t know what to do, which was such a strange position to be in after all of those years of really knowing what to do and honing my skill set.

“I did walk away. And it was one of the hardest things I ever did. It was painful. It was very emotional. I’m starting to get to the other side of it, and I feel better.”

Poor management is a financial burden on U.S. businesses

According to analytics company Gallup, U.S. businesses lose about $1 trillion a year because of voluntary turnover of employees and then have to pay more in order to recruit new hires. They also lose $360 billion annually in lost productivity from employees who are dissatisfied with their bosses.

James, a caller from St. Paul, explained his personal experience with financial loss from bad management. 

“I’ve been kind of up and down the retail chain for about 20 or 25 years, and the few places where we’ve actually figured out the cost [of hiring new employees.] It’s about $1,500 to $2,000 just to train someone in at a basic retail level. And the average overall turnover in those environments is between 100 percent and 150 percent a year. You multiply that between six and eight people in every store you go shopping at — that adds up to a lot,” he said. “And then, bad bosses add on top of that. You know, you end up with 200 percent or 300 percent turnover. So, you can see that it’s really underestimated, the economic cost of that sort of thing.” 

A good boss could be better than a pay raise 

A Gallup survey revealed it takes more than a 20 percent pay raise to lure most employees from a manager who encourages them, and next to no increase to poach the most disengaged workers. 

“What a good boss does is create an environment where you can succeed, and creates an environment that has incentives for promotion, for opportunities to exercise your creativity, that you know your opinion is valued,” Farrell said, “So, if there are meetings, you’re invited to the meetings and your opinion is asked for your part of the team ... It’s about soliciting opinions. It’s about giving clear direction, and it’s about creating opportunities for people to advance themselves.” 

Management training is a big step in creating better higher-ups

Zhou helped explain how important management training is in the world of business.

“Companies just sometimes need to be aware when we promote managers, sometimes it’s based off of their good performance as technical experts,” she said. “They may not have experience managing people.” 

Peter, a listener from Mankato, Minn., called in with a story of a boss who seemed to have no managerial training, and explained how it affected his work environment. 

“I just want to share about my boss back when I was in Colorado. I was working a parks job, and, you know, this guy was all smiles and all friendly at the interview. And then, first day I show up, he doesn’t even acknowledge me,” Peter said. “Any concerns, anything I brought up, he kind of just brushed me off the rest of the season. I basically felt like I didn’t exist, you know. I’m like ‘What was I doing out there?’ Having that disconnect and not having a boss who wanted to teach you and invest in your personal development. You know, it really affects your mental health and your motivation to show up and actually do your work.”

Women and men are often looked at differently 

Recent research has shown that between men and women who both graduate from the same MBA program and start jobs at similar companies, the men get larger teams and have more people reporting to them within the first few months of working than women in similar positions, Farrell said.

Zhou explained that inherent biases, or the biases that we may not realize we have, play a large role in this behavior. 

“It’s important organizations provide opportunities. For example, devoting resources. Carve out time during work hours for managers to go through training so they can acknowledge what are the inherent biases they naturally have. And also, more importantly, how do we proactively constrain some of the biases, making sure they’re not harming the subordinates, the people we’re working with?”  

Academia has similar pressures  

Zhou explained that higher levels of academia can follow the same patterns of poor management. She compared higher education to sports games — you tend to feel like there are fewer resources, that there’s always a time crunch and everything is under more pressure. This leads to more hostile behaviors that can cross the line of abuse.  

“I want to comment on the toxic work environment of academic science, which I came out of,” Cassandra, a caller from St. Paul, said. “You have a hierarchy within that lab of postdoc fellows, graduate students, lab technicians, undergrads. And a lot of those people are unpaid or paid very little. And just like the person at the top paid their dues, everybody below them is paying their dues. And that means taking the abuse.”

“I guess the word I’d use is ‘rank-ism,’” Cassandra said. “Like, I outrank you so I get to abuse you. That ‘rank-ism’ that sort of underlies racism and sexism ... And it’s just kind of part of the air that you breathe. And if you complain about it, you’re being unrealistic. That’s just the way it is.”

Guests: 

  • Chris Farrell is senior economics contributor at MPR News

  • Michelle Singletary is a personal finance columnist at The Washington Post (and a member of Angela’s on-air squad)

  • Le Betty Zhou is an associate professor in the Department of Work and Organizations at the Carlson School of Management at the University of Minnesota

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