by Alex Palmer | April 16, 2013
A new article from Gallup researchers points to the pivotal role that the employee-manager relationship plays in driving the performance of companies. Drawing on data from more than 50,000 employees across 10 major industries, the analysts found that while effective engagement and recognition programs are key to a company’s success, strong relationships between managers and their subordinates are the key factor in making those programs work.

“A company might have a world-class performance management system in place, but the system is only as effective as the managers who implement it,” wrote the authors of the study, Gallup senior consultants Megha Oberoi and Paresh Rajgarhia. 

These conclusions, which originally appeared in People Matters by SHRM India, drew on an analysis that found employees who gave top scores to their managers also found the company’s performance management system to be more effective. While 70 percent of employees who gave their managers a “best” rating also rated their company’s recognition and engagement system as “very good,” just 2 percent of those ranking their managers as “below average” said their performance system was “very good.”

The numbers flipped when looking at when employees rated their performance management systems as “poor.” While just 5 percent of employees who rated their managers as “best” said their recognition programs were poor, a full 85 percent of those rating their managers as “below average” said the same thing.

Oberoi and Rajgarhia’s research isolated four key attributes of strong managers:

• They clearly communicated performance standards and expectations of what a strong performance entails.
• They emphasized employee strengths rather than weaknesses.
• They worked to get subordinates to understand that the performance management system was designed to aid in worker’s skill development, not just to help determine promotions. 
• They communicated frequently with their team members on performance expectations, instead of just during annual reviews.

“Though good processes are important in any performance management system, the human element is the most important component in whether employees perceive the system as effective,” wrote the consultants. “Companies that want to increase organizational and employee performance and productivity should invest in getting the right managers in place and support them in engaging their employees.”