Double Satisfaction with Pay and Job SecurityHave you ever been stressed out by a bad boss? If it was bad enough you likely found yourself saying “they can’t pay me enough to put up with this.” At the other extreme, have you been part of a team led by an outstanding leader? Did the spirit of we-can-conquer-all, electric energy, and stretch goals achieved leave you feeling “and I get a paid for having all this fun too. I love coming to work!”?

Such is the huge positive or negative impact of leadership. This chart correlates data from organizational satisfaction surveys on pay and job security with 360 data on leadership effectiveness. Survey respondents are in the same organization under the same pay systems and organizational circumstances. The key variable is the effectiveness of their boss. There’s a very big gap between the very worst and the very best leaders. Even the difference between good leaders in the middle of the chart and great leaders at the 90th percentile is significant.

This is consistent with research just reported in Harvard Business School’s Working Knowledge newsletter article, “Is it Worth a Pay Cut to Work for a Great Manager?” The researchers looked at football and baseball managers to measure the impact of their leadership on team and individual performance. They concluded:

  • Whether in sports or business the right manager can increase your value even if your pay is less.
  • Strong managers enhance employee performance and add significant value to organizations.
  • When a highly effective manager takes over a team the average player’s performance relative to their lifetime statistics is greater than with a less effective manager.
  • Great coaches teach teams how to win and players achieve their highest potential.
  • Great managers put their players in situations where they have the highest chance of success.
  • Through training and motivation average players can become rising superstars.
  • Great corporate leaders provide a competitive advantage through attracting, leveraging, and retaining talented employees at lower overall cost.