The benefits accrued to companies that mindfully screen for “talented” and “engaged” managers are myriad, according to a study by Gallup — including a huge competitive advantage in profitability.

Gallup continues to venture far beyond mere pollstering, as exemplified by its analytical tome on managers, “State of the American Manager.” Among the extractions from this report are observations about the effect managers have on corporate performance. Consider this:

Companies that hire managers based on talent report a 48 percent increase in profitability;
Those companies report a 22 percent increase in productivity;
They report a 30 percent increase in employee engagement;
They report a 17 percent increase in customer engagement;
And a 19 percent decrease in turnover.

The trick is finding these talented, engaged managers. The recruiting and interviewing processes need to be completely retooled to screen in the right people rather than screen out the “wrong” ones. And that’s not easy, given that Gallup’s research shows that only 35 percent of managers are engaged in their jobs.

“Through their impact, Gallup estimates that managers who are not engaged or who are actively disengaged cost the U.S. economy $319 billion to $398 billion annually,” Gallup said.

Women managers tend to be more engaged than males, yet there are still far more male than female managers in the American workplace.

“Individuals who work for a female manager are also six percentage points more engaged, on average, than those who work for a male manager,” Gallup reported. “Female employees working for female managers have the highest engagement (35 percent engaged), while male employees working for male managers have the lowest engagement (25 percent engaged).”

What can companies do to try to shift their management team from disengaged to engaged? Gallup offers four critical suggestions:

Create a talent-driven human capital strategy by knowing “what success looks like in every manager role and strategically think about how each hire fits into their short- and long-term objectives.”

Grow talent, don’t just promote people, and understand that success at one level of performance does not necessarily project success into the next one. “Businesses should be highly conscientious in their succession planning. A great front-line employee is not necessarily going to be a great manager, and a great manager is not necessarily going to be a great leader. Each of these roles requires a different set of talents.”

Reward performance, not title. It’s okay for a direct report to earn more than one’s supervisor. “High-performing employees are vital to a company's performance, which the company should compensate accordingly. Businesses back themselves into a corner when they tie pay to managerial status, creating an environment in which employees constantly compete for roles that don't suit them.”

Emphasize and support continuous improvement in managers. “Companies need to make an investment in their managers and provide them with the resources, tools and support they need to refine and cultivate their strengths. Development is not dependent on tenure, and managers at all stages of their career should have opportunities to learn and grow.”

Instant Insights /

4 ways to create managers employees want to work for

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