Behavioral Economics: Is Your Manager Killing You?

AMANDA WRANGHAM

Associate Partner

Gallup Consulting

twincities@gallup.com

www.gallup.com

Topic: Open Column

Each of the following factors have been linked to the drain on overall well-being:

• Job dissatisfaction

• Authoritative rather than collaborative leadership

• Lack of trust and openness at work

• Lack of focus on individual strengths

Behavioral economics emphasizes the role human psychology plays in economic decision making. The Gallup-Healthways Well-Being Index? is a tracking poll, surveying 1,000 Americans every night. It is the biggest, longest, and most comprehensive survey showing how emotional well-being is changing in relation to fluctuations in the economy. The survey, initiated in January 2008, produces the Emotional Health Index (EHI) — the measurement of negative feelings (such as depression, worry, or stress) against the positive feelings (happiness or joy) a person experienced the previous day.

The data from this survey hold compelling implications for how Minnesota businesses need to think about their management teams. Nearly one in five full-time Minnesota workers (19.41%) report working in a negative environment. This is nearly the same as reported nationally (20.34%).

Employees who report working in a positive environment call in fewer sick days, which is imperative to employers due to large expenses directly related to human capital. Gallup has also found correlations between the impact managers have on employee engagement and the links to profitability, productivity, turnover, safety, and customer scores. Organizations with an average increase in overall engagement achieved 12% higher customer advocacy, 18% higher productivity, and 12% higher profitability.

Ensuring great managers are positioned throughout every level of the organization is critical to helping increase employee engagement and well-being. But taking on this challenge isn’t easy. Companies need to have disciplined strategies for assessing, hiring, and developing managers.

First off, it is critical to evaluate current team dynamics:

• How strong are your current managers?

• How engaged are your employees?

• How healthy are your employees?

• How do you know?

• Is your assessment subjective or can you objectively quantify your answers?

• Do you have employees who have the potential to be great managers?

• What are you doing to turn their potential into success?

Building a strong, engaged, and healthy team of managers and employees is a complex process, but the consequences for inaction are costly. Companies aiming to come out of the recession stronger than ever know that there is no better time to invest in upgrading management talent at every level of the organization. Gallup Consulting supports organizations in strengths-based hiring and succession management strategies through the delivery of world-class tools, applications, and advisory services that increase organizational alignment, workforce performance, and bottom-line business results. For further information on this topic, contact twincities@gallup.com.