The Harvard Business Review ran a great piece a while back examining why it’s so rare to find great people managers. Great managers as defined in the article are those that: are strong motivators, hold people accountable, are trustworthy, transparent, tenacious, assertive, and productivity focused in their decision making. The study goes on to estimate that great managers contribute about 48% higher profit to their companies than their average counterparts.

1. Not yet.After initially examining if I had all the attributes of a great manager 1, I then started thinking about the implications of one of the study’s major findings, which was that in 82% of cases, companies are promoting the wrong people into management roles. As noted above this adversely impacts business results, and also has the negative effect of burning out both the manager and people reporting up to him or her (a consequence that carries with it gargantuan hidden turnover costs as many of these employees will leave the organization in order to change their situation).

…Okay, so why is this happening? The simple answer is that in most non-technical functions (and many technical ones), managers are more highly compensated than the people reporting to them. Ergo, many organizations promote their highest performing individual contributors into manager roles to 2. As the Harvard piece mentions, another common reason that organizations move the wrong people into management is because they promote based on tenure as opposed to performance, but the answer to how to address this practice is outside the scope of what I want to talk about today.reward them.

But if the strongest individual contributors aren’t necessarily the best people managers, how does an organization reward its top individual performers? While the intuitive answer might be to design one’s comp structure in such a way that an individual contributor can (through base pay or incentives) equal or even out-earn his or her manager if their value to the business warrants it, the reality is more complex. Because if a company pays its individual contributors more money than the people managing them, I think this indirectly undermines the management roles. It lowers the job’s status, and in doing so both diminishes the pool of quality candidates and the credibility of the manager’s themselves. Over time, people in the department figure out that being a manager doesn’t have the same career trajectory as being an individual contributor, and a management role is perceived as a step off the fast track or even a demotion.

…There is also the reality that individual contributors sometimes don’t have as much respect for manager’s that they perceive as less competent than themselves, and so putting someone in charge of a department where they wouldn’t be one of the highest performers as an individual contributor (particularly in technical functions) is often easier said than done.

In many ways this is one of the things that makes the HR Business Partner really valuable to an organization. Because if it is inevitable that many company’s will continue to use manager roles as rewards for top individual contributors, there needs to be someone that can partner with those managers to address the people challenges around engagement and performance that are inevitably going to come up in those cases where the leader lacks strong people management skills.

…Or maybe I have this wrong. How should we be thinking about management roles in organizations? One thing I didn’t address here is that pulling a top individual contributor into the management ranks can often times lower their value to an organization if it the new leadership roles means pulling them out of their day-to-day. So perhaps in some cases organizations might not even be able to afford to use HR as a proxy to resolve people issues for leaders with weak people management issues…

Please share your thoughts in the comments section below.