We’ve all had that supervisor or manager who keeps their eye on the bottom line, prioritizing penny-pinching and profit above everything else in the workplace. A new study from Baylor University’s Hankhamer School of Business confirms what every employee has always known: this bottom-line mentality hurts profits.

Scrooge-like superiors in a company don’t inspire respect, productivity, or a give-and-take relationship with their employees, the study confirmed. The Baylor research team, led by assistant professor Matthew Quade, Ph.D., surveyed 866 people—half supervisors, half their employees—from a broad range of professional and service industries.

Their survey questions were written to measure bottom-line mentality, employee response to this, employee performance, and supervisor-employee relations.

Key findings include:

  • Superiors with high bottom-line mentality (BLM) have poor relations with their employees, going in both directions.
  • Employees of high-BLM superiors see themselves as gaining less from their job.
  • Following, employees reciprocate by putting in less effort.
  • When superior BLM is high and employee BLM is low, the effects are worse.
  • When both superior and employee BLM are high, there is still a negative effect on performance.

“When supervisor and employee BLM is similarly high, our research demonstrates the negative effect on performance is only buffered, not mitigated—indicating no degree of supervisor BLM seems to be particularly beneficial,” the researchers wrote.

The researchers suggest that their results indicate boss-employee relationships are the most productive when supervisors and managers focus on their relationship with their employees, sending a message that people matter over profit. Employee respect is an important piece of the corporate machine. Organizations that need to stress bottom-line outcomes would be best served by pairing that management style with approaches such as ethical leadership, which are proven to have good outcomes.

“Supervisors undoubtedly face heavy scrutiny for the performance levels of their employees, and as such they may tend to emphasize the need for employees to pursue bottom-line outcomes at the exclusion of other competing priorities, such as ethical practices, personal development, or building social connections in the workplace,” wrote the researchers in their summary. “However, in doing so they may have to suffer the consequence of reduced employee respect, loyalty, and even liking.”

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