We know the manager’s role is important. They’re responsible for establishing strategies and goals, overseeing the work to achieve those goals, solving problems, as well as motivating, inspiring, and empowering employees to perform at their best. It’s a tall order. But what happens if a manager’s head isn’t in the game? Can employees be engaged and help the business succeed if their manager isn’t engaged in their own work? Are there business benefits from strong engagement among people managers? Simply put, does manager engagement matter separate from employee engagement?
As part of Microsoft Viva Glint, we get to work with some of the largest, most complex, and successful companies in the world, which includes leveraging the millions of employee feedback data points from our customers’ anonymized Glint survey data to try to answer these kinds of questions.
We got to work collecting and mapping the financial performance data from 862 publicly traded Glint customers over the course of a single year. We examined the survey scores only from those companies’ managers (from any level of management, from individual team managers up to the CEO level) and calculated a quartile rank for each survey item for each company. Those with item score averages above the 75th percentile were categorized as the "most engaged management" group and those below the 25th percentile categorized as the "least engaged management" group. We calculated the financial metrics for each group based on the year-end reporting of the companies’ financial results.
The answer: Yup, manager engagement definitely matters!
The results of the study were compelling. Organizations with more-engaged managers showed much better financial results, with a median pre-tax profit margin 3.25x higher than organizations with less-engaged managers. Additionally, these highly engaged manager organizations showed significantly better return on equity: 10x higher than organizations with less-engaged managers.
These findings highlight the importance of manager engagement in driving business success. By investing in the engagement of their managers, organizations can improve their business success. It is clear that managers’ attitudes influence employees’ attitude, and taking care of managers is also a way to take care of employees. A 2022 Glint research study about what matters most for driving employee engagement highlighted the importance of managers in driving employee engagement and satisfaction.
One key finding from the study was when managers felt positively about the company culture, their team members are also more likely to feel positively about it. Similarly, when managers recommend the company as a great place to work, their team members are also more likely to do so.
Take action
You want to drive business success, right? To do that, you’ll need to support the engagement and success of your managers. According to our research in partnership with Linked on how best to deliver that support, managers need more:
- Access to training or learning resources (33% selected this among their responses)
- Work-related coaching (32%)
- Performance feedback (32%)
- Emotional and mental health resources (30%)
- Decision-making authority (24%)
- Facilitating internal connections (24%)
The way forward
This recent research provides the evidence of what we suspected: the center of any business enterprise is its managers, and the enterprise’s success will depend on those managers’ success – both directly in the decisions they make, and indirectly in their influence on others in the organization. As organizations continue to change, adopt new and sometimes disruptive technologies, re-organize, re-size, and retrench, managers and manager engagement with their work will need to be supported and recognized. Winning organizations recognize this and make smart, targeted investments in their managers.
How do you support and engage your managers? Comment below!
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Methodology
Financial performance data from 01/03/2022 to 12/30/2022 were collected and manually mapped to public Glint clients that had at least one survey with 10 or more manager respondents in 2022 (N=862 public companies).
Company item scores included scores only from manager respondents (any level of management from an individual team manager up to the CEO) and were aggregated by survey cycle, then by client, and were used to calculate a quartile rank for each company. Those companies with item score averages above the 75th percentile were bucketed into the “most engaged management” group and those with item score averages below the 25th percentile were bucketed into the “least engaged management” group. The financial metrics for each grouping were calculated based on the median 2022 year-end financial reporting of the companies in these two buckets.
Engagement was measured by two items: eSat – “How happy are you working at <Company Name>?” and Recommend – “I would recommend <company name> as a great place to work.”). These two items were the most “predictive” of the financial success measures: Stock Return (year end), Market Cap per Employee, Pretax Profit per Employee, Pretax Profit Margin, Return on Capital Employed, and Return on Equity. Other items were tested as well, and while they predicted some of the financial success measures well, the between them the Engagement items were effective in predicting all of them.
References
- “Glint Manager Research”, June 2022
- “How Combining Employee Engagement and Performance Management Fuels Organizational Success,” Harvard Business Review–Analytic Services
- June 2022 LinkedIn Omnibus Survey
- “LinkedIn Learning survey”, conducted for LinkedIn by Censuswide in July 2019, including >2,000 working professionals, ages 18-74, across the US.
- “Manager Support Study”, June 2022 LinkedIn Omnibus Survey in partnership with LinkedIn Market Research, sample of 1963 employed English-speaking LinkedIn members.
