Why most managers are set up to fail

US National Bureau of Economic Research research released in July shows a good manager can have almost twice the impact on a team’s productivity than a top-performing individual can.

This is because “good managers monitor their workers to avoid wasted effort, match workers to the right tasks, and keep workers motivated and engaged”.

Yet research from the Australian HR Institute (AHRI) indicates just 14 per cent of employers are prioritising training spend for management and leadership programs this year. Just one in four consider upskilling line managers an effective way of improving productivity.

Turns out this is just the tip of the iceberg, too.

The NBER paper also found that firms typically rely on the judgement of existing managers to identify potential future leaders, which means employees are often promoted to managerial positions after performing well in their previous role.

This may sound sensible. But it leads to problems, because the skills required to do well in your job do not necessarily make you a good manager.

And so, employers aren’t only underinvesting in upskilling managers. They’re also picking the wrong people to become managers in the first place.

A better approach, the paper says, would be to assess an employee’s suitability to become a manager by testing their economic decision-making and delegation skills, using tools such as Harvard Skills Lab’s freely accessible online “assignment game” .

Our feature this week explores how else Australian employers are trying to address these problems . And it explains why, in today’s increasingly complex modern workplace, it’s perhaps more important than ever that they do.

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Work life

CBA threatens to cut bonuses in return-to-office push It is the latest example of the stand-off between employers and employees over remote work concessions introduced during the COVID-19 pandemic, writes Lucas Baird .

Why the $5m lawyer is no longer a rarity at top Aussie firms Top law firms are forking out more than $5 million a year to poach or protect big-billing market leaders from rivals, amid intense industry competition, writes Maxim Shanahan .

Office workers in massive AI trial report saving an hour a day Public servants who took part in a six-month trial of artificial intelligence say it saved them an average of an hour a day, including the time taken to check its accuracy, writes Edmund Tadros .

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AFR launches new tool to simplify executive education choice

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The AFR Executive Education Platform aggregates key metrics from more than 1,000 business-related postgraduate courses at every major Australian university and matches users to the program that best fits their personal goals and needs.

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