NEW YORK (MainStreet) — Everyone who's experienced a tyrannical or moody boss knows that a leader's behavior has a trickle-down effect on employees and, consequently, customers.
Researchers at Vanderbilt Owen Graduate School of Management, the School of Labor and Employment Relations at the University of Illinois at Urbana-Champaign, and Cornell University School of Hotel Administration recently found that even when senior managers with no direct contact with lower-level workers treated middle managers poorly, there was an adverse effect on the turnover rates of lower-level workers. The researchers studied 1,527 full-time employees at 94 hotels in the U.S. and Canada. The report was published in the journal Career Development International.
“Middle managers’ treatment of employees reflects how bosses treat them,” says Ray Friedman, a professor of management at Vanderbilt's Owen Graduate School of Management and one of the study’s authors.
That has deep-reaching ramifications.
“The boss gives you grief, you give your subordinate grief, he gives his partner grief, and the partner kicks the dog,” says Debra Benton, author of The CEO Difference (McGraw-Hill, 2014).
To boot, replacing employees, even low-level ones, is expensive.
A Center for American Progress review of 30 case studies in research papers published between 1992 and 2007 on the costs of employee turnover found that it costs the business roughly 20% of a worker’s salary to replace him or her. While that study concludes that business can improve turnover rates by offering workplace flexibility and earned sick days, the Vanderbilt University study showed improved relations from management could help.
Improved employee treatment also influences how effectively they interact with customers.
“As the CEO's secretary, I have direct contact with his clients," says Carrie Aulenbacher, who works at Benco Leasing, a commercial truck and trailer rental company in Erie, Pa. "He has treated me fantastically for the past 15 years, and I reflect that by showing my utmost professionalism to all his appointments. I am their first experience of him, and I want to attend to their every need to show that he is appreciative of their business. Our customers drive our company, and I work hard to show they are valuable.”
—Written by S.Z. Berg for MainStreet