Why Bad Managers Affect Your Team and Company (and How to Fix It)

Bad managers are more than just an annoyance to teams and individuals; they pose a significant challenge for organizations. Poor leadership profoundly affects employee well-being and workplace culture, damaging productivity and hurting organizations. Gallup’s 2024 State of the Global Workplace Report estimates that low employee engagement costs the global economy a staggering $8.8 trillion per year, or 9% of global GDP. 

This article dives into Gallup’s insights and other recent studies, to explore the widespread impact of bad managers on employees and organizations. It also examines why poor leaders often remain in their roles and outlines practical strategies to address their influence effectively.

The Gallup study highlights that “the manager-employee relationship is the locus of employee engagement and a central factor in thriving in life overall.” Let’s examine in more detail how poor management contributes to workplace stress and disengagement, which has wide-ranging effects on employee well-being and organizational performance.

The 2024 Gallup report reveals that 49% of employees in the US and Canada face “a lot of stress” at work every day. This is the second highest regional percentage in the survey and higher than the global average of 41%.

The study also shows that employees working in companies with bad management practices are nearly 60% more likely to be stressed than those working in environments with good management practices. More alarmingly, employees with bad managers report “a lot of stress” about 30% more frequently than unemployed respondents.

There are some key aspects through which bad managers can amplify stress in the workplace:

• Micromanagement: Excessive oversight can lead to feelings of inadequacy and pressure, leaving employees constantly anxious about meeting unrealistic expectations.
• Unclear expectations: Lack of direction or inconsistent communication from managers creates confusion, resulting in stress as employees struggle to meet unclear goals​.
• Overwork without support: Managers prioritizing results over well-being often overburden individuals, leading to exhaustion and employee burnout.
• Constant negative feedback: Employees who are frequently criticized without significant constructive guidance can feel less confident in their abilities.
• Lack of recognition: Ignoring or undervaluing people’s contributions in the workplace could foster feelings of worthlessness and lower employee engagement​.

When managers fail to recognize achievements, encourage growth, or foster purpose, they fuel employee disengagement. This leads to the rise of “quiet quitting,” where employees meet only the bare minimum expectations. This harms productivity.

According to the Gallup report, only 23% of employees globally feel actively engaged in their work. The numbers in the US and Canada are better (33%), but they also indicate that two-thirds of respondents feel disengaged. When you think managers account for 70% of the variance in team employee engagement in the Gallup study, the correlation between poor leadership and low employee engagement becomes even more apparent.

The report states, “Engagement is more closely tied to interpersonal relationships with one’s manager. An effective manager motivates team members, moving them from indifferent to inspired.”

Alongside the impacts listed above, poor management takes a toll on mental health, too. Gallup’s data shows that disengaged employees are more prone to:

• Depression and anxiety: Persistent negative interactions, such as verbal abuse or lack of empathy, can contribute to clinical conditions like depression and anxiety.
• Isolation: Employees may withdraw socially at work due to fear or frustration, exacerbating feelings of loneliness​.
• Physical health decline: Mental health issues stemming from poor management often manifest physically through headaches, fatigue, or other stress-related conditions. This compounds the negative effects on overall well-being​.

Bad managers don’t just push employees toward “quiet quitting” – they can drive individuals to leave their jobs for good. Some studies corroborate this perception:

• According to a McKinsey survey, 35% of respondents listed “uncaring leaders” as one of their top three reasons for leaving a job.
• A 2019 study conducted on behalf of staffing firm Robert Half indicates that 39% of Canadian workers had quit a job because of a bad boss.

High turnover rates caused by poor leadership incur significant costs. Employee replacement expenses, including recruitment, onboarding, and lost productivity, range from one to two times an employee’s annual salary. Effective management is not just about achieving business goals; it’s critical to creating a sustainable, healthy, and engaged workforce.

In addition to the effects bad management causes on individual employees, they also create a ripple effect across entire organizations. These key impacts include:

• Decreased innovation: Teams led by ineffective managers often avoid taking risks or sharing new ideas, because they fear criticism or rejection. This stifles creativity, limits problem-solving, and hampers long-term competitiveness.
• Lower productivity: Employees working under bad managers experience low morale and unclear priorities. This inefficiency spreads across teams, reducing overall organizational output and financial performance.
• Poor business decisions: Bad managers frequently lack strategic vision or data-driven decision-making skills, leading to choices that hurt profitability. These mistakes can range from misaligned priorities to poor resource allocation and missed opportunities.
• Brand damage: Disengaged employees under poor management are unlikely to promote the organization positively. Negative reviews, low referrals, and reduced customer satisfaction can tarnish the brand, harming recruitment and client relationships.

We’ve seen how poor leadership is harmful to organizations and individuals. So why is it so common to see bad managers staying in their roles for a long time? Here are a few reasons why organizations are reluctant to dismiss bad managers:

• Short-term mindset: Some bad managers may deliver short-term results that make their dismissal seem counterproductive. So, companies might overlook leadership issues if the manager meets goals, even if their behaviour harms the team long-term​.
• Replacement costs: Replacing a manager involves high costs, including recruitment, onboarding, and potential productivity loss during the transition​.
• Legal risks: Dismissing a manager, particularly in cases without clear documentation of poor performance, may expose the company to legal challenges​.
• Poor feedback processes: Inadequate systems for collecting honest employee feedback about managers can prevent upper management from recognizing issues.
• Organizational culture: In some companies, seniority or tenure may shield bad managers from consequences, especially if considered integral to the organization.
• Fear of instability: Concerns about disrupting a team’s dynamics, leaving a leadership gap, or the reputational risks of terminating a leader may lead companies to delay addressing management issues.

Some studies indicate that organization-level initiatives, such as improving management practices, affect employee well-being more positively than individual interventions. In other words, companies must take the lead and change the way people are managed.

Let’s look at some actions organizations can take to have better managers:

Organizations should offer managers and leaders opportunities to develop and grow. For example, they could adopt training programs focusing on emotional intelligence, communication, and conflict resolution and pair them with mentors. This way, companies ensure their leaders align with organizational values and support employee well-being while fostering a leadership-building culture that drives long-term results.

Another way that companies can develop better managers is to implement more robust feedback processes. To gather honest feedback about managers, consider anonymous surveys, one-on-one check-ins, and 360-degree performance reviews. Your organization can also ensure clear documentation of issues to make well-informed decisions and minimize legal risks.

Accountability is central to efficient leadership. Organizations should tie managerial performance evaluations to team outcomes, such as engagement, retention, and morale. They should also set expectations for leadership behaviour and provide actionable feedback to address issues. Adopting improvement plans will give managers opportunities to grow instead of being dismissed.

As we’ve seen, bad managers can have far-reaching consequences, from financial losses to strained workplace culture and employee well-being. Addressing this issue requires proactive measures, such as fostering better leadership through development and accountability.

By taking these actions, your organization will help managers to develop the skills to inspire teams, drive engagement, and deliver results aligned with your strategy. In other words, investing in your leaders means building the foundation for long-term success.

Rafael Spuldar

Rafael is a content writer, editor, and strategist with over 20 years of experience working with digital media, marketing agencies, and Tech companies. He started his career as a journalist: his past jobs included some of the world's most renowned media organizations, such as the BBC and Thomson Reuters. After shifting into content marketing, he specialized in B2B content, mainly in the Tech and SaaS industries. In this field, Rafael could leverage his previously acquired skills (as an interviewer, fact-checker, and copy editor) to create compelling, valuable, and performing content pieces for various companies. Rafael is into cinema, music, literature, food, wine, and sports (mainly soccer, tennis, and NBA).