Overemphasis on the bottom line can drive down employee performance

Dive Brief:

Managers who focus mainly on the bottom line fail to get the best performance from their employees, a Baylor University study concluded. Matthew Quade, Ph.D., assistant professor of management in Baylor's Hankamer School of Business and lead researcher of the study, said in a statement that a "bottom-line mentality" (BLM) is detrimental to employee-manager relationships.
In Baylor's poll of 866 people — half of whom were supervisors and the other half workers — researchers asked supervisors questions about workers' performance, and they questioned workers on their supervisors' views of the bottom line. Results showed high-BLM managers created poor relationships with their employees, and employees reacted to high-BLM managers by holding back on performance. When workers had a low BLM, this correlation was more evident, researchers found.
"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 Quade. "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."

Dive Insight:

If emphasizing profits over people is the foundation of an organization's culture, managers can be expected to adopt that narrative. Nevertheless, employees who share the profit motive may feel overlooked or undervalued at these organizations, but workers who see their values reflected in their employers' mission statements often perform better and are more loyal, according to a Metlife poll.

This disconnect can impact employee trust. A Kforce study released earlier this year found that employees cited a trust, passion and mentorship as the their three most valued factors in an organization. The Baylor research study also pointed out trust as a critical factor in cultivating good relationships with employees.

Baylor researchers recommended organizations proceed cautiously when pushing bottom-line results at the expense of employee well-being and ethical standards, and said employers can pair a BLM management style with ethical leadership practices to improve performance. Training managers on building trusting relationships may also be helpful, though HR may need to first assess how prepared managers are to lead.

In a 2018 study by West Monroe Partners, about half the managers surveyed admitted they haven't had any training for their roles as leaders, and 44% said they felt overwhelmed at work. However, HR can elevate training as an essential part of the work experience for employees at all levels in an organization.