Should the bonus of a manager depend on how they treat their people?

Toxic managers are rarely pushed out by the organisations that employ them. More often, they are protected – even excused – because they deliver the numbers.
Yet an abusive boss is frequently the reason a company's most talented people quit, and resignations and replacements are expensive. So why do HR departments and senior executives find it so hard to act, why can the process drag on for years, and what would make an organisation more resistant to such managers?

HR Portal put these questions to Julianna Czifra, a leadership and organisational development specialist and coaching psychologist who researches the topic. Her central message: the issue must be tackled at the level of the system, because abusive behaviour plays out in a social setting – the workplace.

When performance trumps everything?

The root of the problem, Czifra said, is an excessive focus on results:

"If a company concentrates only on performance, and that comes before everything else in the culture, then the end can justify any means, and it no longer matters how the manager achieves the desired results," she said. A great deal of dysfunctional leadership can be put down to performance pressure.

In such cultures, research shows, the leadership team tends to close ranks around a manager who faces complaints or discontent. Protecting the manager is seen as being in the organisation's interest; siding with a subordinate could have far-reaching consequences.

The result is that the messenger often pays the price. The employee who flags abuse, or escalates a situation, is the one the organisation turns against.

Staff pick up on this quickly, Czifra said. They know whether it is worth confronting a manager or safer to develop their own coping strategy. Because speaking up can cost someone their job, those who do so are most often the people who are confident they can find work elsewhere. That makes it a warning sign when a company's most valuable employees are the ones heading for the exit.

Why workplaces need checks and balances?

Workplaces are typically hierarchical, with an imbalance of power and influence between managers and subordinates. That imbalance has to be offset with structural tools, Czifra said, and employees need established processes through which they can take meaningful action against an abusive manager. Without some form of oversight, and with no internal or external counterweight, what is acceptable depends solely on the manager's own judgement.

Czifra pointed to the controversy surrounding Budapest's Vígszínház theatre and its director, Enikő Eszenyi, as an illustration of a performance-above-all mindset. As Czifra described it, Eszenyi generally argued that the theatre had been at its most successful under her ten-year leadership, in both ticket sales and the number of productions staged – and that her actions were justified by those results. It did not occur to her, Czifra said, that others might not see performance as the top priority. The theatre was entirely dependent on its director, with no internal or external oversight, leaving staff with nobody to turn to; how long they stayed, and how they coped, was a matter of individual resilience.

Years can pass before the problem reaches the top

Where no counterweight is built into the system, the workplace community can become one, Czifra said. "Because this is a social phenomenon, even if a manager's abusive behaviour targets just one person, its effect will sooner or later be felt across the whole community. The question is when the team reaches the point where they collectively sense that the manager has crossed a line."

Much depends on perception – on who interprets these situations, and how. Building the critical mass needed to push a manager out can take a long time, as can waiting for an incident serious enough to catch the organisation's attention.

HR has a particularly hard task, Czifra said. Such managers tend to present themselves very well to those above them, cultivating strong relationships with senior leadership and HR and building a powerful positive "brand". With those below them, they let their guard down, because subordinates cannot affect their position. If HR and top management only see the good side, they struggle to accept the darker one, because it does not fit the picture they have formed.

Czifra recalled a chief executive who told her it took five years to realise that one of his directors was "wearing down" the people beneath him. He had noticed only that staff turnover in that team was higher than under other directors. He was satisfied with the director's professional work: the manager was one of the most reliable members of the leadership team and always delivered on time and to a high standard.

The turning point came when a respected specialist resigned and the CEO asked why. The employee described the manager's toxic behaviour, and the CEO listened in shock; it was not the person he knew. He summoned the director, who was given six months to change his behaviour. The attempt failed, and the director eventually left. Czifra said the CEO's response sent an important message to the wider workforce.

As in an abusive relationship, she added, the longer a toxic situation continues, the harder it is to escape. Some employees learn to tolerate it or adapt. Others find common ground with the manager, or even excuse and serve them. These become the manager's inner circle – loyal people among whom the manager may feel like an excellent leader.

How employees cope?

In such situations, employees tend to do one of three things: stay silent and compromise, speak up, or leave. Much depends on how well a person can adapt, which in turn reflects where their personal boundaries lie and how strong their self-esteem is.

Some ruminate for a long time. Others freeze – the term stress psychology uses for paralysis – or develop learned helplessness, tolerating the suffering rather than acting. Prolonged exposure can lead to physical symptoms and health problems.

A supportive social environment helps people hold out for longer: understanding colleagues, the chance to vent, and a shared language among those with similar experiences. Over time, endurance and survival can themselves become learned skills.

Other factors matter too: how much room for manoeuvre there is within the organisation, whether an internal move is possible, and whether the benefits package includes an employee assistance programme that offers access to a psychologist. Finally, Czifra said, it is worth clarifying how long someone has to hold on – until they can switch jobs or leave, or in the hope that the situation resolves itself.

When the boss at the top is the problem?

The hardest scenario is one in which the most senior leader is abusive and the culture supports that behaviour. Such a leader typically builds a toxic system and hires people who embody it.

"This is the toughest scenario. I have seen HR teams at large multinationals break down because they could not influence the values, mindset and behaviour of the number-one leader," Czifra said.

Change can also be triggered from outside. A serious case of abuse that reaches the media – particularly social media, which can set off a "butterfly effect" – can damage a company's reputation and its employer brand. Breaches of an organisation's ethical or behavioural codes can result in financial losses, and rising turnover, recruitment and onboarding costs can force a company's hand.

Put people skills in the performance review

One effective brake, Czifra said, is to include how managers treat people in their performance evaluation, alongside financial targets.

She cited a large company where 50 per cent of a manager's evaluation depends on their behaviour towards subordinates. That is tied to key performance indicators such as complaints, staff turnover and employee satisfaction survey results. Bonuses, promotions and pay rises all depend on how a manager scores on these "human" measures.

It also makes managers' performance comparable, so problems surface sooner and can be addressed more quickly. Even so, it may take years to accumulate enough evidence for a company and a manager to part ways, Czifra said – but getting the problem onto the table is a decisive step.

Changing organisational culture takes the longest, she stressed, but is worth the effort in the long run. Daily struggles with a manager, whether open or hidden, drain energy from productive work and ultimately hurt the organisation's results.

A workplace shouldn't be about survival," she said. "It should be somewhere I can perform well in a calm environment that still has plenty of professional challenge.

Building the system

One structural option is an organisational ombudsman: a neutral figure, independent of management, who gives both sides a voice, hears them out and, in confidence, establishes what has happened. The ombudsman also mediates between managers and employees. In smaller organisations, HR can fill that role, but only if it can preserve its independence – and the trust of staff – which depends heavily on the individual HR professional.

Clearly defined behavioural norms are another deterrent, as are reporting channels and whistleblowing platforms. These work only if the body that investigates reports has real authority, draws on a range of expertise and can guarantee the reporter's anonymity and a proper investigation.

HR's toolkit, from hiring to development

HR can contribute through the processes it designs for leadership selection, onboarding, development and performance management.

In recruitment, assessment centres can help map social skills and competencies. Where they are too costly, Czifra suggested creating social situations that pull candidates out of their rehearsed role, and having candidates meet a variety of colleagues whose feedback feeds into the hiring decision. That also signals to applicants how much the company values people's opinions.

For managers, she also recommended a six-month probationary period, which gives more time for a person's true character and behaviour to show – provided HR is alert enough to notice. During a shorter probation, it is easier for a manager to stay on their best behaviour.

Onboarding deserves far more emphasis, she said, including a clear social contract and an explicit set of values that new managers are expected to fit – with consequences if they do not. Leadership development should reflect both organisational and national cultural expectations of managers, and the people side of performance reviews should carry real weight.

The key, Czifra said, is for employees to see the system as fair and balanced, with a channel through which subordinates' voices reach leaders. HR can serve as a bridge between staff and management, depending on how it sees its role and whether it can build trust with both sides.

None of this becomes a culture-shaping force, she added, unless top management genuinely wants change and a people-centred culture, beyond slogans.

Organisational culture has real power only when its effect can be seen in actual behaviour – when it truly shapes how individuals think and act.

Can development change a manager's behaviour?

Only if the manager accepts that change is needed, Czifra said. If they do, they can be offered coaching, supervision, mentoring or psychological consultation. Personality development works only when it comes from the person's own intent.

That realisation can come as a wake-up call. Czifra described a manager who sought help only after his entire team walked away from him – a clear message to both the manager and the organisation that left him shocked and bewildered. Given a second chance, he corrected course: he managed his next team far more deliberately and regularly used supervision and coaching to do so.

Because personality shows itself in social settings rather than in an interview or test, she said, HR needs to watch how managers behave in those settings and gauge their progress through employee surveys. Measuring once a year is not enough; short half-yearly or quarterly assessments of managers are more effective.

The article's oroginal can be read here in Hungarian.