Behavioral Economics for Leaders

CHAPTER 17Managers with Good People Management Skills Increase Employee Satisfaction and Reduce Turnover

People management skills is a new term in management literature. The capability of supervisors to manage their employees well benefits all: employees, supervisors, and the company as a whole. But what really matters here, and how can it be measured?

In major companies, it is common today for employees to be regularly surveyed about job satisfaction and how they rate supervisors, colleagues, and subordinates. Often people perceive these surveys as time‐consuming and boring. But important findings can be derived from the surveys, as can be seen from a case study of an American high‐tech company.

The company asks their employees, numbering more than 10,000, at regular intervals about various aspects of their workplace. The assessment of the leadership qualities of the respective supervisors constitutes a key part of the interviews. On a scale from “Strongly disagree” to “Strongly agree,” employees are requested to state their degree of agreement with each of the following six questions. The questions relate to the respective supervisors regarding whether they

1. communicate clearly what work performance they expect;
2. offer regular coaching and tips on how somebody can improve their performance;
3. actively promote an employee's career;
4. involve other people in important decisions;
5. create a positive mood on the work team, even at difficult conditions;
6. are people you can trust.

The ...