Bad Boss Blues: How the Economy Affects Manager Moods
Business + Economy

Bad Boss Blues: How the Economy Affects Manager Moods

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In Working Girl it was idea theft; in The Devil Wears Prada it was executive tyranny; and in Horrible Bosses it was substance abuse, sexual predation and psychological tricks. Seen through Hollywood’s lens, a boss is not simply your superior; they are your predator.

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While the reality of employer-employee relationships is far more complicated than on the silver screen, bosses remain the most influential factors of job ― and life ― satisfaction. A 2005 Gallup Poll discovered that most people do not quit the company; they quit the supervisor, citing incompatibility or dissatisfaction with their bosses as the number one reason for leaving their jobs. A 2004 study from Indiana University-Perdue University in Fort Wayne found that a worker’s relationship with her boss is nearly as important as her relationship with her spouse for overall happiness, and a survey at Buckinghamshire New University in the U.K. found that a bad boss can increase your chance of heart disease by 20 percent.

Job satisfaction reached an all-time low in 2010 (the Conference Board found only 45 percent of Americans enjoyed their jobs that year, down from 49 percent in 2008), due to a variety of factors: layoffs, pay cuts, fewer opportunities to switch jobs, and yes, bad bosses. Only 67 percent of employed Americans rated their supervisor as good or excellent in 2010, and 11 percent rated their boss as poor, according to a Rasmussen Report.

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According to Dr. Nathanael Fast, a management professor at USC’s Marshall School of Business, bosses’ moods can rise and fall as quickly as the Dow. In 2009, Fast co-authored a study that demonstrated that power coupled with a sense of inadequacy often led to heightened aggression among individuals, and an impulse to protect their ego.  And during down times, Americans can become more tolerant of a boss’s behavior because a bad boss is better than no boss at all. “When the economy is bad, management may have less control on what is happening to their business,” Fast says. “And they may act out negatively because of that.”

Even when corporate profits are flush, bosses’ behavior can turn sour. According to Sreedhari Desai, a business professor at the University of North Carolina and a research fellow at Harvard, managerial behavior goes beyond the macroeconomic climate. In 2010, Desai and a team of researchers published a study that implied that the more executives made, the meaner they behaved toward their employees. Desai used data correlations and lab experiments to confirm that a higher income gap in a company’s hierarchy gave managers license to treat employees more poorly, for example compensate them less and fire them for adequate performance more.

Yet recent studies suggest more positive attitudes are rebounding in the workplace.  This January, Rasmussen Reports found 81 percent of employed Americans worked in a positive environment. And 79 percent of employees rated their supervisors as good or excellent in 2011, an 18 percent increase from the year before. The uptick comes while salaries have fallen or remained stagnant.

Desai attributed the improvement employee satisfaction to the psychological phenomenon of adjusted aspiration levels. “Human beings are remarkably persevering,” she says. “I’m not surprised that after having taken a dip after the economic situation satisfaction levels are now coming back up. It’s a testament to the human mindset. We try to make the best of the situations because the alternative is that we’d all be depressed, morose and miserable.”

Employees may also become more tolerant of poor managerial styles as long as they produce. A 2010 study carried out by the University of Iowa showed that if as a fictional CEO was categorized as “productive,” participants overlooked abusive language or behavior. In contrast, a likeable CEO received lower marks if seemed less competent.  Such a phenomenon may explain why Steve Jobs, a CEO known for micromanagement and antagonism, still received approval ratings as high as 97 percent from his employees.

At the same time, an improving economy, growing corporate profits, and lower unemployment numbers give American workers a sense of higher job security and more opportunities to find satisfying employment options. According to government data in November 2011, more employees quit their jobs by choice, a sign of growing confidence in the job market. Fast hopes that if nothing else, better times will lead to more aware bosses. “It’s psychologically uncomfortable to recognize your own bad behavior,” he says. “But a good boss would consider these factors and change because of it.”