A Good Manager Is Hard to Find

Only one person in 10 has the rare talent that makes a great manager, a Gallup poll says.

Few people—about 10% of people who work—have the qualities that make outstanding leaders, “and organizations have a hard time finding it,” according to a report from Gallup.

In fact, Gallup contends, most managers working in the U.S. today are unsuited to the role. The very ability that likely made people succeed in their previous, non-managerial roles is not the one that creates a great manager, according to Gallup’s “State of the American Manager: Analytics and Advice for Leaders” report.

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Great managers possess a rare combination of five talents, Gallup suggests. They motivate their employees, assert themselves to overcome obstacles, create a culture of accountability, build trusting relationships and make informed, unbiased decisions for the good of their team and company.

The sought-after talent combination that characterizes great managers exists in only about one in 10 people. Another two in 10 have some of the five talents and can become successful managers with the right coaching and development.

Companies that hire managers based on talent realize a 48% increase in profitability, a 22% increase in productivity, a 30% rise in employee engagement scores, a 17% jump in customer engagement scores and a 19% decrease in turnover. Gallup finds successful managers place more emphasis on employees’ strengths than their weaknesses—and that a strengths-based approach is associated with greater levels of employee engagement and well-being, and team productivity and profitability.

Gallup based its report on decades of talent research, a study of 2.5 million manager-led teams in 195 countries and analysis from repeatedly measuring the engagement of 27 million employees. It examines the crucial link among talent, engagement and vital business outcomes, such as profitability and productivity. 

Other findings include:

  • 18% of current managers have the talent required of their role, while 82% do not;
  • More than half (54%) of managers with high talent are engaged, compared with 39% of managers with functioning talent and 27% of managers with limited talent;
  • Female managers are more likely to be engaged than male managers (41% vs. 35%, respectively); and
  • People with a female manager are also six percentage points more engaged, on average, than those who work for a male.

DOL Sues Firm Over Company Stock Purchases

The Labor Department filed suit against a California-based manufacturer to recover millions of dollars for ESOP plan participants.

The U.S. Department of Labor (DOL) is suing Gruber Systems Inc. and its CEO to recover more than $2.6 million in losses suffered within the company’s employee stock ownership plan (ESOP).

The DOL alleges the manufacturer knowingly bought over-valued company stock within the ESOP—and that the firm’s CEO, John Hoskinson, drove money into the ESOP not for the exclusive economic benefit of plan participants, but instead to support the stock price of the financially distressed company.

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The suit specifically alleges that the company willing caused ESOP participants to lose money when the plan purchased additional company stock for significantly more than fair market value in two transactions, totaling $2.6 million. The suit alleges that this money should have been set aside to fund the retirement accounts of Gruber retirees, but was instead steered into questionable stock purchases to fund the financially distressed company.

Based in Valencia, California, Gruber provides molds, automation equipment and supplies for the cast polymer and other composite-related industries.

Announcing the charges against Gruber, Crisanta Johnson, Los Angeles regional director of the DOL’s Employee Benefits Security Administration, noted that plan funds “must be invested in the interest of workers and retirees, not used to prop up a struggling firm.” She said it is becoming more common to see ESOP funds “used illegally by company owners and management to bolster companies. Doing so threatens the financial security of workers and retirees.”

The suit was filed in a California District Court and seeks a reversal of the $2.6 million in prohibited stock transactions, along with the restoration of any related plan losses, including lost opportunity costs. DOL is also seeking a court order requiring the defendants to account for and restore losses to plan participants.

The department is also seeking permanent enjoinment of Hoskinson from serving as a fiduciary or service provider to any plan covered by the Employee Retirement Income Security Act and his removal from any positions he holds as a plan fiduciary. The suit requests the appointment of an independent fiduciary to distribute the plan’s assets to participants and beneficiaries and to terminate the plan; an action for which Hoskinson and the company must pay.

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