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How happy are you?

Do happy managers perform better, or do good performers feel happier? Like the chicken and the egg, it’s hard to say which comes first but it’s possible to hypothesise that the two feed on each other!

Our latest research (Positivity and Performance) found a strong link between managers’ psychological wellbeing and the perceptions of their own performance. The managers who put themselves in the top 10% for performance ranked their personal happiness highly at 96 (out of 100); the bottom 10% scored themselves at only 10.

The positivity-performance cycle
The question about the correlation between positivity and performance is an important one; are people more positive about their psychological wellbeing because they know they are high performers, or does being a high performer make you feel better about yourself? My belief is that it’s not necessarily a simple cause and effect relationship. Rather, it’s a self-reinforcing virtuous – or vicious – cycle. If you think you are doing reasonably well, you feel good. If you feel good in your job you’ll do it better, all things being equal. Doing it better makes you feel better still, and so the virtuous cycle sets in. On the other hand, knowing you are underperforming makes you feel unhappy (people want to do a good job) and being unhappy makes you dispirited, and so the vicious cycle sets in.

What we saw in our research was a snapshot in time, but for many managers it’s really a journey, with some people on the upswing – feeling better and improving – and for others it’s the down swing – feeling negative and failing. 

It’s not only a manger’s own happiness that impacts performance. We found if a team is happy and performing well this influences the wellbeing and performance of managers.

Stress and workload
But it’s not as simple as a happy and performing manager equals a happy, performing team. Our research shows a close inter-relationship between managers’ performance, happiness, stress levels and ability to cope with workload.

Positivity performance cycle

The two-year itch
Worryingly we also found evidence of a two-year itch – for the first two years in their role, managers’ report higher levels on both happiness and performance but after this period, their happiness and performance scores start to fall. It seems that after two years, as managers adjust to the role, it loses its freshness; their excitement and enthusiasm diminish making them less happy – and less confident about their performance.

Two years is a pivotal time in a manager’s career within an organisation. That means organisations have an opportunity to harness and retain managers’ early enthusiasm and energy by ensuring they receive training and development in those first two years and are clear about their longer term career opportunities within the organisation.

Training and development
Not only can training and development impact on performance, it can also indirectly improve psychological wellbeing. This is important, because those responsible for leadership and management development need to focus on both dimensions – if you don’t do something about how managers are feeling alongside improving their knowledge and skills, the effectiveness of any development will be limited. So next time you hear someone talk about ‘happy sheets’ at a training event, ask them if they are really finding out if managers are truly happy.

Given what we know about employers’ reluctance to train new managers (see our last report, The Leadership and Management Talent Pipeline), and the evidence from this research that managers are far more psychologically positive if they have access to development, the solution to this problem may well be quite simple. Train managers early and their happiness and performance is likely to improve. Simples!

A happy workforce
Coincidently, just as we launched Positivity and Performance, the Office of National Statistics (ONS) launched their own survey results on the nation’s happiness. The ONS says that being happy at work is important because it makes people more productive and improves the economy. So a generally positive workforce should mean that managers will feel more positive, which should encourage them to perform to a higher standard. And, given the state of the UK economy at the moment, we need every bit of help we can get to improve performance.

Making a case for leadership and management development

It is a truth, sadly under-acknowledged, that an organisation in possession of an under-performing business must be in want of leadership and management development. Part of our mission is to shine a light on the value of this development in the hope that one day this will be universally acknowledged. ILM believes it is essential for people to understand both leadership and management right from the start of their working life, first of all as someone who is managed and then as you progress to managing and leading others.

On 10 July, the All Party Parliamentary Group on Management hosted an event to launch a newly published report from the Department for Business, Innovation & Skills (BIS), Leadership & Management in the UK – The Key to Sustainable Growth. The report shows the clear link between business success and leadership and management capability. ILM was part of the group which authored the report and our own research is referenced.

John Hayes MP, Minister of State for Further Education, Skills and Lifelong Learning, made a speech to open the proceedings, making it clear that the Government is not about to step in and direct underperforming businesses, but aims instead to help create a framework in which employers could access education and training opportunities that met their needs.

On the panel responding to the report were CEOs of three professional institutes, Charles Elvin (ILM), Ann Francke (CMI) and Peter Cheese (CIPD) along with the Institute of Employment Studies and ACAS. Not only was it rare for all three CEOs to share a panel like this, but there was clear consensus about the need to invest in leadership and management development to help organisations improve their capability.

The UK’s poor productivity record compared to its major international competitor nations is attributable principally to the long tail of under-performing companies suffering from poor leadership and management. The evidence in the report is unequivocal – UK managers are less well educated, less well trained and less well equipped with the tools and techniques needed to enable their organisations to achieve what they are capable of. Most of the gap between the UK and the USA (at the top of the productivity and performance table) would be overcome by UK if managers were equipped with the right skills.

Charles Elvin made the case for investing in leadership early in people’s careers, to prepare them for the lower levels of management, and this certainly caught the mood, with several people in the audience reinforcing that message through their questions and comments.

So what is the business case for investing in leadership and management?

Fact 1 Organisations with better qualified managers and a dedicated programme of leadership and management development perform better.

Fact 2 Better trained managers ensure a more engaged workforce and enhance employee well-being, leading to better performance, lower absenteeism and lower staff turnover.

Fact 3 Under-performing managers cost organisations money and are directly linked to business failure.

Fact 4 UK managers under-perform compared to leading competitor nations, as does UK business due to poor leadership and management.

Fact 5 If the bottom half of performers were brought up to the standard of the average, then UK plc would be a world-beater.

This report makes the case for leadership and management development very robustly, and shows quite clearly how poor management holds firms back. And now we need to ensure that those messages reach decision-makers.