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5 Ways Mismanagement Can Affect Your Bottom Line

Management is a necessary part of a business. Unsupervised employees are more likely to slack off or otherwise behave inappropriately when there are not managerial staff members present. Managers gap the distance between executives and employees on the ground, tailoring messages to lower levels of workers to achieve desired results. They also usually have experience working in capacities they supervise and are able to provide valuable insights and recommendations to the employees they oversee simply thanks to experience.

While management is important, not every managerial candidate is perfect, just like everything else in life. When managers underperform — not meeting sales quotas, spending too much company money, not getting along with employees, not resolving conflicts — they set themselves, their employees, and their employers up for failure. Let’s look into five specific ways that mismanagement can affect your business’ bottom line.

Making employees quit

Mismanagement makes employees dissatisfied, encouraging them to resign. This results in high costs related to hiring employees and can be mitigated through proper management. Hiring new employees is often highly expensive, nixing any benefit those bad managers bring.

Intentional vandalism, theft, and other crimes

Managers are superiors with power over business functions and employees. Sometimes, this power is mismanaged and abused, usually manifesting itself in managers talking down to and disrespecting employees. Even though managers don’t represent companies, they’re undoubtedly associated with the companies they mismanage. If an employee is disrespected by a manager, especially in front of others, he may commit a crime against his employer. Because that employee has likely worked for his employer for some time, he’s aware of ways it can be exploited. This results in worse damages than if an outsider committed crimes against the business, causing financial loss.

Less employee morale

When employees feel good about their employer, their job duties, and pay, they’re said to have strong morale. Low pay, bad benefits, dirty jobs, and mismanagement, among other things, can cause low morale. This results in lower productivity, lowering efficiency.

Costly lawsuits

If managers sexually harass, assault, or discriminate against employees, lawsuits may be filed by victims against your business. This undoubtedly results in higher expenses due to court costs and lawyer fees, hurting your bottom line. If your business is in dire straights, talk to a bankruptcy attorney if finances are struggling.

Low innovation

Being innovative isn’t important in every workplace situation, although it’s definitely good for employers. If managers treat workers disrespectfully and foster negative workplace environments, they discourage employees from speaking up with original ideas.

Management’s performance is directly correlated to business performance. Mismanagement can cause a number of problems between people in workplaces, often resulting in bad financial performance. Keep an eye peeled for these five ways that mismanagement can lower your bottom line, correcting under-performing managers if they commit these goofs and gaffes.

Written By

Eileen O'Shanassy is a freelance writer and blogger based out of Flagstaff, AZ. She writes on a variety of topics and loves to research and write. She enjoys baking, biking, and kayaking. Check out her Twitter @eileenoshanassy.

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