There’s a crisis in the American workforce: 66% of workers are checked out at their jobs . At best, these employees clock in and out, putting time but zero passion into their work. At worst, they resent feeling their needs aren’t being met, and are missing deadlines or work days altogether. The result? An estimated $480-$600 billion a year in lost productivity .
How can companies create a more engaged workforce? The answer goes beyond salary increases, job flexibility, and higher 401(k) matches (though, to be sure, those help). Research in organizational behavior suggests that having “transformational leaders” — or in other words, very effective managers — can induce employees to be more engaged, motivated, and productive. By cultivating effective leadership, companies become more successful.
Although “transformational leadership” may sound like academic jargon, it encapsulates the qualities and behaviors of the ideal people manager. This type of leadership has four key components:
- Instilling pride in employees, while gaining trust and respect and communicating the organization’s value and mission.
- Helping employees set goals, communicating optimism about future goals, and providing meaning to everyday tasks.
- Challenging ideas, taking risks, soliciting new ideas, and thinking outside the box.
- Giving employees personal attention, empathy, and support, while celebrating each person’s contribution .
Managers have a profound impact on the day-to-day engagement of their employees, accounting for 70% of the variance in engagement levels . The more effective the manager, the more engaged employees will be. Unfortunately, companies frequently fail to hire quality managers — in fact, Gallup estimates this happens about 80% of the time — and many managers are ill-equipped to manage individual employees, let alone a team .
Why are so many managers ineffective? Part of the reason has to do with the manager selection process. When Gallup asked managers why they believed they were hired for their current role, the most common answers were they were either successful in a previous non-managerial role or had vast experience in their company or field . The first – and most critical – step to increasing employee engagement is for companies to disrupt the typical hiring practices and demand hiring more effective managers who have a track record of transformational leadership qualities. Or, at the very least, companies should invest in training existing managers to develop these behaviors.
Creating Engaged Workers
Research shows that truly effective managers – ones who demonstrate transformational leadership behaviors – create healthier, more productive workers. A 2014 study by Walsh, Dupré, and Arnold examines how this leadership style affected employees’ psychological health . Results show that transformational leaders are more likely to empower employees in a way that helped them feel self-determination, confidence, and competence, which directly impacts their psychological health. Empowered employees are also more likely to go above and beyond at work, which helps gain trust and respect from colleagues and increase overall job satisfaction. In a country where wages are stagnant and anxiety disorders are prevalent, companies should prioritize improving employee psychological health. In turn, this will help employees’ well-being and reduce unexpected costs—like turnover—from staff burnout.
Additional research on highly effective leaders investigates how transformational leadership affects employee motivation, an important component of feeling engaged at work. The researchers find that transformational leaders are more likely to set concrete, challenging goals for employees, which energize employees and increase overall motivation . Consider the fact that 79% of employees feel that they have little to no guidance from their manager . This research suggests that by setting challenging goals for employees, leaders can increase motivation and help them feel more guided and supported.
Finally, other research explores how stressed leaders affect employees’ burnout levels. This study finds that the more emotionally strained leaders are, the fewer transformational leadership behaviors they demonstrate, such as communicating optimism, setting employee goals, and giving employees personal attention and feedback . The results also support previous research showing stress can be transferred from managers to employees through dwelling on negative emotions and demanding work challenges. This research underlines what most people have felt before either as an employee or manager, or both: the more strained leaders are, the more likely they are to be poor managers and transfer their stress and negativity to staff, sapping motivation and causing employees to disengage.