Managers who focus on the bottom line end up hurting the bottom line

You want your managers to focus on the bottom line, but new research shows that too much focus may get to their egos — and it’s the entire firm that suffers.

New York University’s Stern School of Business and Cornell University’s Johnson School of Management recently released the results of an experiment that took a look at managers and how their sense of status and power affected the company.

The findings show that managers who focus solely on bottom line issues like headcount, budget control and compensation end up with a larger-than-usual sense of their own power.

Couple that with the sluggish economy and that means managers are more hard-pressed than ever to focus on limiting compensation and keeping budgets trim.

The wrong impression

The takeaway here, Steven Blader from NYU says, is that companies need to have their managers focus on how colleagues and subordinates are viewing them.

If employees see their managers as power-hungry or unwilling to listen to their input on issues that come up, then that will ultimately end up hurting their output. Employees will be less engaged, less willing to offer creative ideas and collaborate with team members.

The right impression

On the other hand, managers that are seen as more fair to their subordinates and colleagues, and focus more on how they are perceived by others will contribute to an engaged workforce that delivers better bottom-line results.

So how to achieve that?

• Get feedback from employees. If you don’t have a formal process for this, consider implementing one or just set time aside for employees to talk.
• Notice the subtle signs. Look at how employees react to you when you ask how you’re doing. Realize that they may be apprehensive in giving feedback, so try to create a comfortable atmosphere.
• Give encouragement and feedback. From minor to major tasks, positive reinforcement goes a long way in creating the ideal culture.

What tips do you have for managers to maintain good relationships with employees? Let us know in the comments below.