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Fear-Based Management: Can Your Company Afford It?

Fear-Based Management: Can Your Company Afford It?

Question is: Do your managers hurt or help the bottom line? Are their management practices costing the company?

Fear-Based Management: Can Your Company Afford It?

By Tina Morris

Improvement is a resident topic in project managers’ minds. Streamlined processes, earned value, minimizing risks, and maximizing profits are buzzwords in our daily vocabulary. Yet one key bottom-line influence remains principally taboo in water cooler conversation – management styles. Self-evaluation seems too scary and therefore becomes unfortunately regulated to the lesser practiced analysis. Which leads to the under-explored questions: Do your managers hurt or help the bottom line? Are their management practices costing the company?

Peruse any bookstore business section and the shelves are stocked with expert renderings on every management function. Navigating change, for example, is a hot topic. Who Moved My Cheese? sold over 11 million copies worldwide and small wonder. Change can be scary. Change may also be necessary to retain a skilled workforce. While many companies purport their official mantra as ‘People are our most important asset,’ management practices often fail to support this core statement. Management, as both an art and a science, must continually evolve.

Stanford Professor Bob Sutton’s The No Asshole Rule: Building a Civilized Workplace and Surviving One That Isn’t tackles the same problem as clinical psychologist Jane Middelton-Moz’s extensive study Bullies: Playground to the Boardroom. Adult bullies cause harm to coworkers, subordinates, and the organizations that host them. In answer to the question, “Do adult bullies really exist?” the Workplace Bullying Institute says, “Yes.” Their 2007 nationwide study identifies the significance of bullying to the American workforce. 54 million Americans responded that they had been bullied on the job and 72% of bullies were bosses. Left unchallenged, bullying poses a (significant) threat to companies and workers.

Cost of Bad Management

Unintentionally, every company hires its share of managers who view subordinates as personal fiefdom chess pieces. What actions the company employs to safeguard workers and create a productive, healthy environment, however, are deliberate and a blueprint of their own corporate culture. Inaction is an action. Tolerance can be viewed as acquiescence. When working relationships fail the workers, human cost is reflected concretely in spreadsheets and the less obvious but real, lack of goodwill towards the corporate name. Further, the health of employees may be affected by managers who cause undue stress or prolonged stress. Workers may also choose to leave due to loss of job satisfaction and as any budget analyst will testify, turnover costs. Workers who remain feel the residual effects. Cost categories cataloged by the Workplace Bullying Institute study include:

Loss of productivity: distracted workers, loss of motivation, absenteeism, stress symptoms that contribute to

Health care cost

Dispute resolution time

Time spent in damage control

Recruitment, replacement costs.

Anger-management, counseling for bullies

Legal fees for council

Lawsuits and settlements

Measuring and tallying the indirect costs of turnover is difficult but must factor into the equation. Estimates from The Annie Casey Foundation’s HR Turnover Calculator rank replacement costs as high as 70% of an employee’s salary.  With so much of the bottom line at stake, the cost of management training becomes marginal. Organizations can best minimize their risk by training managers to employ proved practices rooted in policies of fairness.

Best Practices

Right or wrong, many managers learn on the job and merely mimic predecessors. This practice is principally unwise. The work environment is fluid and a one-size-fits-all solution is nonexistent. Effective management is situational as what works on the battlefield is largely inappropriate for the business world. Combat yields little time for Socratic roundtables but software is not constructed in a vacuum. The inclusion of everyone’s professional best yields a better product.

Management styles can be boiled down to two types, fear-based and respect-based. Everyone understands what fear-based management is and how to apply it. Punish one or two employees and the rest are controlled by fear. Instilling terror takes little work. Respect-based management, on the other hand, isn’t instant and it ain’t Jell-O. Respect is earned over time and can be maintained only by continuity and fair play. Everyone wants to work for the boss who treats his/her people well. A few characteristics of each style:

Fear-Based Management

Respect-Based

Extremely old school, heavily dependent upon control.

Employees are bad, incompetent, and stupid. If management did not dictate every move, the world would cease to turn.

Ensures that ‘subordinates’ understand who can punish them and to watch constantly for their smack.

Short-sighted. Focused only on the immediate.

Guiding principle – Hire professionals and watch them closely.

Hands-on management. Must get to know employees.

Professionals expected to employ their skill set and grow.

All opinions are welcome. Everyone has a chance to contribute.

Focused on long term goals and mentoring employees.

Earns loyalty to the team and the organization.

Guiding principle – Hire professionals and provide a professional environment.

In an environment where brown-nosers are rewarded for copiously agreeing with the boss, fresh ideas are stymied. Fiefdoms may serve the ego of the ruler but not the needs of the organization. The difficulty in drawing a box between bad behavior and harassment further complicates the issue. Clearly, grey areas exist. When the subject of stopping adult bullying arises, many nod their heads in agreement yet few can actually define it. Certain types of abuse are covered under United States law, chiefly sexual harassment and age and race discrimination. What types of behavior are considered bullying?

Bullying 101:

Australia is one of the few countries that have legally defined bullying but they are the aberration rather than the rule. That may soon change in the United States. As reported in a September 2010 issue of CFO Daily News, 12 states are currently contemplating anti-bullying legislation. Further, they define five of the top ways to recognize bullying as:

Verbal insults of employees. Absolutely never appropriate.

Slandering a co-worker’s name. Repeating/misusing privileged information such as Suzy’s possible drinking problem or innuendos about Bob’s sexual orientation.

Excluding certain workers.  Just like grade school – it always hurts.

Unwelcome contact. Touching is never okay.

Unreasonable management. Working people well below their competency level and micro-managing simple tasks.

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