Cut middle management, kill productivity

CMA Management, April, 2006

Companies that cut middle managers jeopardize their productivity more than save costs, a study from McMaster University suggests.

"Middle managers are the front line communicators with employees," says Rick Hackett, Canada Research Chair in Organizational Behaviour and Human Performance at the DeGroote School of Business at McMaster University. "One-on-one social exchanges between bosses and their workers have a real impact on employee productivity, behaviour and commitment, and when you cut middle-management, often you lose that interaction."

Hackett found interactions between employers and employees must be reciprocal. For example, if a supervisor entrusts an employee with an important project and takes some risk by making the assignment, the employee is more likely to feel obligated to make a positive impression that would reflect well on his supervisor, even after the project has finished. And in return, the employee is more likely to trust that the employer will reward his performance and give him further opportunities.

In his study, published in the Academy of Management Journal, Hackett emphasized that rewards are not necessarily monetary. They can be as simple as increased autonomy, access to privileged information or more opportunities to develop.

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"Leaders must earn the respect, loyalty and trust of their followers," says Hackett. "All of the lauded leadership qualities, like being charismatic and inspirational, caring about and inspiring employees, only set the stage for effective leadership. CEOs cannot personally connect with each and every employee, so it is up to middle managers to manage the one-on-one exchanges that build trust and loyalty over time if they are to realize and sustain superior performance and behaviour from their followers."