As a Manager, Is It important for Your Employees to Like You?

This is a matter of opinion. I personally believe that if your employees like you, they will be more willing to work hard for you. There is a delicate balance that needs to exist. The balance is between your employees liking you and being a friend to your employees. Just because somebody likes you does not necessarily mean that you are their friend or that they are your friend.

“Hanging out” with employees can lead to dangerous situations and possible trouble. Some employees that you do not hang out with may feel that you, as the manger, are “playing favorites” with the employees that are your “friends.” Others may feel that the relationship is inappropriate because it blurs the line between personal and business relationships.

Regardless of the danger of developing a friendship (I know it sounds funny, but it can be a problem), managers that are liked will be more effective, not because of some extraordinary management skill, but because the employees will be more willing to take the extra step, go the extra mile, work a little bit harder or longer, and treat the customers better. A positive work environment creates a positive employee. Positive employees treat customers better!

All of these advantages lead to more money for your company through increased sales, lower payroll costs, and better reputation through increased customer service. Have a competent, well-liked manager and your business will prosper.

Conflict of Interest Between Managers and Shareholders

Corporate managers and shareholders can sometimes find themselves in a conflict of interest. The goal of being a good manager is being able to spot these potential conflicts and to remedy the situation before a serious problem arises.

The biggest conflict between managers and shareholders is going to be money. Here is the most common scenario. A corporation is profitable. In fact, the corporation is more profitable than expected. Therefore, the corporation has a cash surplus, if you will. Managers would want this money as a financial bonus and the shareholders would want this money as a stock dividend. What to do? What to do?

Mangers will argue that without their leadership and managerial ability, the corporation would not have been as profitable. The shareholders will argue that without their money, the corporation would not have been able to invest in its growth, and therefore, would not have reached that level of prosperity. Who should get the money?

Another situation arises when the managers are also shareholders. This may lead a particular manager to push the opposite way of his/her position. For example, if a shareholder manager would get more money from a stock dividend than from a bonus, this shareholder manager might vote in favor of a stock dividend, not because he/she believes that stockholders should be rewarded for their investment, but because it will mean more money for that particular manager. What if only that one manger is a stock holder?

Before you try to wrap your head around all the possible situations, let me inform you that there is no right answer to this scenario. If you do not give a dividend to the shareholders, you may find your stock undervalued by disgruntled stockholders and your stock as a less attractive purchase. If you do not give your managers a bonus, managers may leave your company or not work as hard as they normally do. Usually, managers are under contract, therefore their job performance is linked to their continued employment, however, if a manager is not being rewarded for his/her hard work, what is the incentive in staying?

Looking at it from a strictly economic point of view, it might be advantageous to give a little money to both parties. However, in the end, the profitable of your company rests in the hands of managers. Be sure to treat both parties well and you should avoid these potential problems.