Germany's Employee Engagement Problem Begins With Managers

German businesses have a problem with their managers.

Gallup's latest measure of employee engagement in Germany found that 16% of workers are engaged, or emotionally and behaviorally connected to their job. The majority are not engaged (68%), which means they aren't putting energy or passion into their work. And 16% are actively disengaged, meaning they are more or less out to do damage to their company.

When employees are engaged, it's a big plus for companies: A Gallup study found that work units in the top quartile of employee engagement outperformed bottom-quartile units by 10% on customer ratings, 22% in profitability and 21% in productivity. Work units in the top quartile also saw significantly lower turnover (25% in high-turnover organizations, 65% in low-turnover organizations), shrinkage (28%) and absenteeism (37%). These work units also saw fewer safety incidents (48%), patient safety incidents (41%) and quality defects (41%).

German Managers Think They're Doing Their Jobs Well

Engagement begins at the local level. Gallup research has demonstrated that a team's immediate manager is responsible for a large part of his or her team members' engagement. Thus, the quality of management and leadership is one vital element -- along with the right strategy, a robust business model, and the right products and services at the right price -- that can help a company improve its competitiveness and ensure its sustainable success.

In Germany, the data show that when asked if they had thought about leaving their current company due to their direct supervisor, significantly fewer engaged employees (7%) than actively disengaged employees (48%) answer "yes." Nearly seven in 10 employees (68%) reported that they had at least one bad manager in their working career. And 14% of actively disengaged employees are currently looking for a new job, while only 1% of engaged employees are actively seeking new employment.

A 2014 Gallup study of German workers revealed that at some point in their working career, almost one-quarter of employees (23%) had left a job to get away from their manager and improve their overall life. One result of having a bad manager is that employees feel miserable while at work and that misery follows them home in the form of stress and burnout.

Yet most managers believe they're doing their jobs well. In a 2014 survey by the German business newspaper Handelsblatt, 95% of managers said that they are "a good and accepted manager" by their employees. The survey also found that a majority of managers don't see the need for change: 55% of respondents stated that they have not participated in a seminar meant to improve how they work with employees.

This finding suggests that many managers receive no formal training about employee engagement and how to create and sustain it. That kind of training is helpful because -- to gain the benefits that come from engaged employees -- companies must set engagement goals, hold managers accountable for meeting those goals, and include rewards for meeting engagement targets in recognition and incentive systems.

Interestingly, managers themselves are highly critical of the current management culture. A 2014 study by the Bundesministerium für Arbeit und Soziales, Germany's federal ministry of labor and social affairs, revealed that more than three-quarters of the managers in Germany (78%) are convinced that the management culture in Germany requires a fundamental shift, though Germany is a successful country. The same study also shows that less than half of the surveyed managers believe that the country's current management approach is capable of meeting its upcoming needs. In short, Germany could be even more successful and position itself very well for the future with a profound transformation of the current management culture.

Unfortunately, German management culture has yet to change in response to these shifting perceptions. The traits most valued in German managers are reliability and efficiency, and being straightforward and structured. Management culture and education scarcely emphasizes managing people. Management degrees -- particularly the MBA -- focus on managing finances and administering processes, and the programs tend to pay scant attention to the people who make those finances and processes work. That one-sided focus does not promote employee engagement.

How German Companies Can Improve Management

Clearly, Germany needs a different attitude toward management and managers. In many companies, employees are moved into management whether or not they have an aptitude for managing people. When Gallup asked German managers why they believed they were hired for their current role, 51% cited their experience and tenure in their company or field and 47% said it was due to success in a previous non-managerial role.

Experience, tenure and previous success are not the same as managerial talent. Experience and skills are important, but talent -- the naturally recurring patterns in which we think, feel and behave -- predicts performance. Companies need to select managers based on their talent to engage, care for and focus on each employee as an individual. Managers who consistently fail to engage their employees should be removed.

Selecting managers with the right talent to engage and manage employees is a leadership responsibility. Company leaders should hire and promote for manager talent, provide opportunities for managers to develop their management abilities and reward people-management skills. No matter how talented managers are, they still need support, training and coaching to help them understand what employees need from their workplace. Managers also need engagement goals, and they should be rewarded for meeting them.

Most of all, managers need to be engaged with their workplace, too. Maintaining engagement among work teams is a big responsibility, and it won't be done well if managers themselves are disengaged. Gallup's data show that engagement among managers in Germany is about the same as engagement among employees without managerial responsibilities. It's a lot easier for leaders to cultivate engagement across a company when managers have the right talent for the job. So when leaders find a manager with the talents and strengths to manage people, their engagement should be taken as seriously and nurtured as carefully as front-line workers'. Engaged managers create motivated, energetic and engaged teams.

Workplaces in Germany that focus on engagement have achieved a rate of four engaged employees to every one actively disengaged worker, compared with a ratio of 1-to-1 among the German employee population overall. This finding shows that it is possible to foster an engaging workplace culture in Germany -- and this culture, in turn, offers companies a competitive advantage.

Survey Methods

Results are based on telephone interviews conducted from March 25-April 27 and from Nov. 2-Dec. 4, 2015, with a random sample of 1,429 employed adults. All respondents were living in Germany and selected using random-digit-dial sampling. Interviews are conducted with respondents on landline and cellular phones. Samples are weighted by gender, age, region, profession (job type and role), employment status (full time and part time), and adults in the household. Demographic weighting targets are based on the most recently published data from the German Statistics Office.