Big Bucks Make for Big Mean Bosses
Ever work for a company where the boss is, well, a jerk?
If the answer is yes, the reason for his or her jerkiness may be simply a matter
of compensation — too much, not too little.
A new study, When Executives
Rake in Millions: Meaness in Organization,
written by researchers at Harvard Law School, the University of Utah and Rice
University, and presented at the recent International Association of Conflict
Management, suggests there is direct a correlation between how well executives
are paid and how poorly they treat those below them.
One of the study’s author,
Sreedhari Desai, told the Harvard Business Review (HBR),
she wanted to "look at income disparity, power and moral disengagement.
Does this income gap help the leaders to feel comfortable setting up policies
that hurt the people at the bottom?"
Ms. Desai and her colleagues scored
various firms based on employee relations data from Kinder, Lydenberg, Domini & Co.
(KLD). As an example, firms that had paid fines for mistreatment of workers
were docked points while those that offered profit sharing were granted points.
After tallying various pluses and minuses, companies were given a "meaness
score."
The researchers then checked executive compensation at the companies
based on Compustat data and discovered that higher executive compensation numbers
tracked with higher meaness numbers.
Ms. Desai said the findings of the research
were "disheartening," but
not surprising. According to HBR, the power holding theory sees humans
as "world class rationalizers who find ways to insulate themselves from
the mean, sometimes unethical or inhumane things they do. Money may be one
of those insulators."
Discussion Questions: Do you believe there is a correlation between top executive
pay and how well or poorly workers down the ladder are treated in the workplace?
Are "mean" corporate cultures any more or less effective than "nice" ones?
This is more attributable to the personality types frequently found at the top. There is a certain personality that would never be mean but would never be found at the top because they were too scared of risk and, as I explore in my new book, too concerned with being liked. People willing to make the tough calls are being rewarded for their natural, blunt and more aggressive personality.
Do people get “nice” or “mean” after they get RICH? Or are they RICH because they are “nice” or “mean”? That chicken or egg canard has been on the table since Aesop.
There are leaders who are ‘jerks’, just as there are leaders who are ‘too soft’.
The important element that boards, associates, and shareholders have to work with is making the executive(s) accountable, and providing the feedback mechanism to let “Mr. Mean” or “Ms. Nice” know how they are impacting the organization. In some cases that means change along the line.
Without the feedback, the organization is destined to drift, and not reach its full capacity. With the right feedback, and subsequent adjustments, organizations can, and do come out stronger. It takes candor and caring, as well as a willingness/acceptance of the executive(s) to hear the feedback and deal with it.
In my experience I have also noticed that there are those who measure their self worth in terms of their position and compensation. Higher positions and compensation have them believing that that their thoughts, statements, and actions are simply a gift to those they are willing to share them with. As the article states, they have a sense of insulation that they can do no wrong and therefore they can rationalize every action that does not work out.
No, I don’t think they are more effective. In the long run, they lose the dynamics of learning and collaborating. They do not become the leader whose followers enthusiastically join them to find excellent solutions for corporate challenges.
The followers worry about keeping their jobs, staying under the radar and consequently perform at a lower level. This scenario does not contribute effectively to the bottom line, the top-line or long-term corporate growth.
While this may be fun to think of, the results provided are far from “science” and really do more damage than aid. Perhaps there is something here, but the study overview provided in the link provides sketchy details as to what controls were put in place, whether we are looking at corelational data or causal data, and the metric used to identify “meanness” is far from scientific.
All said, this is akin to the quizzes in Cosmopolitan Magazine that allege to identify if your lover is cheating on you. Not sure I would give it much more thought than that without some real research being done that far exceeds what was reported. (Perhaps the research was done, and just not reported here–but from what was provided, this is “interesting” but not real “useful.”)
Does my response make me among the “mean” bosses?
First, nice corporate cultures are more effective. I have a lot of clients who I consider to be nice people. The kind of people I should be imitating. I’d love to name them but they know who they are. Just recently, one client asked me to talk to some of their employees and ask–off the record–what they thought of their “bosses.” It was great to hear all the compliments they handed out. Good morale equals higher sales. Just ask Publix. Don’t ask Kmart.
I’ve worked for my share of jerks. When you work for a jerk, it doesn’t matter how much they are paid, you will think they are overpaid. Interesting fact; all the jerks I’ve ever worked for have ended up either fired or dead. Just be patient.
With all due respect for the fantastic institutions that conducted the study, “When Executives Rake in Millions: Meaness in Organization,” I’m not too sure I agree with the suggestion that there is “direct” correlation between how well executives are paid and how poorly they treat those below them.
However, I do subscribe to a theory that there might be an “indirect” correlation because it often takes a mean and nasty insensitive type of personality to fight and claw his or her way all the way to the top of a large enough company that pays such high dollars to its top management.
More significantly, those at the very top of such organizations tend to be answering to demanding shareholders, who are often even much less sensitive about people within the organizations. For the top executive, the shareholders and directing board members are the people he or she aims to please. The top executive is playing the game of Survivor.
I wish I could say that “nice” companies are always more successful. It just hasn’t been my experience. I believe the reason has less to do with executive compensation than it does with “mean people’s” somewhat uncanny ability to manage UP, and control their own bosses–typically the Board of Directors.
That doesn’t mean you MUST be mean to succeed…I think it’s somewhat irrelevant. Having said that, it would behoove American industry in particular to chastise poor behavior early and often, and reward respectful behavior in the same time frame.
I worked for one person who was borderline psychopathic. He was successful in his BOD’s eyes, and was able to grow and sell the company. However, a year later, some of his “warts” came out…the number of threatened employee law suits came to light, and the new owners finally said goodbye to him.
Happily, my current company is committed to being “mean-person-free” (we have a far more descriptive term for it that I can’t express in a family audience), and we seem to be doing just fine.
I have found people at the very top to be charismatic and empathetic even if it is deliberate or contrived. IT is one of the ways they make it to the very top; they have to be likable as well as arrogant and strong willed.
The mean upper management often are the middle or upper middle people. They may or not be good at their jobs, thy may have bullied, cheated, or slept their way to the top, they often are lacking in management skills and insecurity lends to meanness. Meaning that many people in business that are bullies are truly insecure in their position, value to the organization and often frightened by failure and respond to these things by being mean to others.
While some think this is the only way to manage, the only tool they have, it is often just a lack of people skills. Often people with good production or specialty skills find their way in mid-level management ill equipped to lead and the only tool they have is to try and appear tough and in charge which often translates over time to meanness. It’s an easy way for them to get things done. Ultimately it’s bad for the organization. Turnover is higher, trust is low, and deceit runs throughout the organization under the mean leaders as people will tell them anything to keep from getting yelled at or mistreated.
Then there are the jerks who really are bad to the core. I’ve worked for a few people who I can honestly call evil, these are the mean ones who hurt, intimidate, mentally torture, manipulate and take pleasure in the pain of others.
I believe the culture of a corporation starts at the top and winds its way through all departments of the business. Mean cultures becomes a non caring one-sided resolution to customer service issues. Too often it becomes “This is what we are going to do. Take it or leave it.” Not exactly a warm & fuzzy customer service view of long-term success.
I would add to this that competition or lack of competition can have the same effect as overly compensated CEOs.
There was a study done recently that established a direct correlation between large bonus or incentive payouts and failure to achieve the task at hand. As counter-intuitive as that seems, it’s been validated more than once under a variety of circumstances. Dan Pink talks about the study in this brilliant animated presentation.
Some believe it’s a matter of making the stakes so high that people choke under the pressure. Others believe there may be a deeper psychological block that develops when the prize is too great.
Either way, I think there are often situations where the boss is being a “jerk” because unbeknown to their staff, they are simply failing at their job, perhaps because the rewards for success are just too great for them to handle. As a consequence, they take it out on the people around them by instituting punitive policies and fostering paranoid environments. In many cases, these people are crashing and burning before our eyes–we just don’t realize it.
In these situations, just be thankful you’re not their cat!
“Thanks for the research. Kinda proves what we all viscerally knew.”
This was one of the comments offered after the linked article in the HBR and I think most of us would agree with it; but we probably also agree with David Z.: the details of this “research”–if that what it should be called–are too vague to really comment intelligently (though the use of an emotional term like “meanness” hardly inspires confidence.)
We might draw a lesson or two from the world of pro sports as to how people behave when they make huge salaries, often with guaranteed contracts. Is it any different in the business world (which of course sports is a part of)?
Talking about finding what you were looking for! Or the self-fulfilling prophecy. I have found that people with high expectations are often perceived by those with lower expectations as jerks. Often, people with high expectations surpass their peers when it comes to rewards. They expect better results and are willing to work to achieve them. Their rate of success is high and they end up being the boss. In that position they have a very hard time expecting less of others than they do of themselves. This can be perceived as demanding by many and brutal by those of moderate ambition. We would still be eating over open fires, and gathering nuts and berries it it weren’t for people like this.
I knew a guy who worked at Coca-Cola when Robert Woodruff was running things. One year an executive brought in a radio during the World Series and others gathered around during the games. It was said that Mr. Woodruff was passing by and stuck his head in to ask the score. Stayed just long enough to look around the office and note who was there, then left. Every man in the room immediately left and went back to their offices expecting to be called in and fired. None were, but the fact that they expected it, and kind of felt like they deserved it is the real story. They all knew they had failed their obligation to their employer by listening to the ball game.
This is a prime example of expectations based upon reputation. Now Mr. Woodruff built a great company and I doubt he could have done so unless his employees knew he had very high standards.
I have never worked for anyone who built anything who did not have very high standards. If those with no standards or low standards think of those with high standards as jerks, then maybe they need to go to work for the government where expectations are low, achievement is frowned upon and forgiveness is a plague.
Interesting research. I’m not willing to say that higher paid execs are the only reason lower paid staff are treated badly, but I definitely feel it plays a role.
The key question is, what does this research mean for retailers? In part, I think it means execs should work harder to foster an environment that ensures all staff feel “we’re in this together.” I know, it sounds a bit quaint, and we all know that in reality no company is a democracy. But if more associates at store level, for example, really felt like they and the execs at corporate were sharing in both the joy and pain, one wonders what impact that would have on retention and customer service.
I am a nice guy boss. Guess I don’t make enough. I would rather make less and be kind.