Stop Playing Favorites

Summary:

Although most managers believe that they give each of their team members equal attention, respect, and consideration, four decades’ worth of empirical research says otherwise. Studies show that nearly all bosses have—or are seen to have—in-groups and out-groups. Employees on the wrong side of these divides experience a reduction in engagement, satisfaction, commitment, citizenship, innovation, and performance.

In recent work with a Scandinavian robotics company, we noticed something worrisome: During leadership team meetings the CEO mostly addressed and consulted with just three of his nine reports, while the rest simply looked on. When we later asked him about this dynamic, he was taken aback — both surprised to hear that he had discernible “favorites” and unaware of the impact his favoritism might have on the other executives. The issue had never been raised in upward feedback exercises.

This is an all-too-common problem. Although most managers believe that they give each of their team members equal attention, respect, and consideration, four decades’ worth of empirical research says otherwise. Studies show that nearly all bosses have — or are seen to have — in-groups with whom they have warmer, more personal relationships and out-groups with whom they operate more transactionally. Evidence also suggests that when employees find themselves on the wrong side of these divides, engagement, job satisfaction, commitment, and ultimately collaboration, innovation, and performance suffer.

No matter the function, organization, industry, or geography, subordinates pay close attention to how they’re treated in comparison with colleagues of equal talent, work ethic, and status. They quickly pick up on differences in leaders’ tone, sincerity, body language, style, emotional support, flexibility, criticism, and praise. And when they see or feel that a manager is less likely to solicit their views, build on their suggestions, encourage their initiatives, notice their efforts, or consider their needs and preferences — as if they work for, not with, the person — they often become disillusioned, distressed, and even hostile. One executive told us, “My boss described me as a ‘valuable resource,’ intending it as a compliment. [But] I can tell you it didn’t make me feel particularly human or valued,” given the glowing terms he’d used to describe other team members. We’ve seen some people who were driven to tears by managers’ favoritism; others who have vented about it outside the team, damaging everyone’s standing; and many who have simply quit in search of an in-group elsewhere, even if it meant taking a pay cut.

Bosses usually argue that any differentiation is unintended and that their reports are reading too much into minor disparities. Both claims may be true. However, it is the view from below that counts. Perceived unfairness has real consequences. So it is critical that managers first acknowledge these issues and then work hard to head off or repair conflicts. Those who don’t, risk losing key contributors, exacerbating the challenges presented by underperformers, ruining team performance and morale, and hurting their own reputations.

Understanding the Issue

A study by Joe Labianca and Daniel Brass in 2006, when both were professors at the University of Kentucky Gatton School of Business, found that 8% of work relationships were downright negative. But recent data on employee engagement and the influence of bosses on voluntary turnover suggests that for boss-subordinate relationships the problem stretches well beyond that.

In a 2023 Gallup survey of more than 120,000 workers, 59% reported feeling disengaged (a group the pollsters and others have dubbed “quiet quitters”), and 18% said they were actively disengaged (“loud quitters,” who were vocal about their dissatisfaction and likely to demoralize colleagues). And although bosses aren’t the only factor driving employee engagement, they are a strong one. For example, a 2021 McKinsey study found that 52% of people who quit their jobs did so in part because they didn’t feel valued by their managers.

To date, most scholars of boss-subordinate relationships (also referred to as leader-member exchange) have focused mainly on the benefits of high-quality ones. However, we must also consider the ill consequences of low-quality ones, characterized as contractual and weaker on dimensions such as trust, liking, respect, and exchange. Our research and that of others shows that because less-favored subordinates often feel resentment or “relative deprivation” (as the University of Oklahoma professor Mark Bolino calls it), they may exhibit active mistrust, dislike, contempt, and avoidance. That prevents them from engaging in effective cooperation, team problem-solving, knowledge sharing, and discretionary effort, thereby solidifying their out-group status.

A longitudinal study we conducted with a global insurer highlights this conundrum. Prior to engaging in a large-scale development program, executives received feedback from all their direct reports to help them identify areas for improvement. The leaders then received tailored training, one-on-one coaching, and peer mentoring at regular intervals over a year. Afterward the same employees were asked to re-evaluate their bosses on the same dimensions, and although all the managers had made clear progress, it did not register evenly within their teams. One might expect the harshest critics to be the first to notice and the most appreciative of change, but we found the exact opposite: Subordinates whose initial ratings were one standard deviation below the mean proved the least likely to acknowledge subsequent improvement.

Two other accelerating trends — virtual and hybrid workplaces and the push to make teams more diverse — can make in-group/out-group dynamics even more difficult to navigate, because they increase the potential for miscommunication, divisions, accusations of bias, and feelings of neglect.

Here are three key takeaways for team leaders: Strained relationships are more prevalent than you think. The impact of even perceived favoritism is greater than you realize. And the longer these problems go unnoticed and unsolved, the more damage they cause.

Heading Off Conflict

Consider two examples. Léa, an ambitious executive at a European conglomerate, was hired four years ago by the company’s COO to help the nine managing directors overseeing business units to restructure their portfolios and models — with a promise that she would subsequently move into one of those roles. Instead her original assignment has been extended three times, despite turnover and advancement among the MDs, and she still feels like an outsider, waiting for her chance to run a unit. She told us that she gets fewer opportunities to talk to her boss than her peers do, and when they meet, he’s evasive about her development path. She feels taken for granted, resents being “strung along,” has lost trust in the COO, and is considering exit options — all unbeknownst to her boss.

Aisha, an extremely capable pharma executive recently hired for a high-level position on a global team, is based on a different continent than her manager and colleagues and has therefore spent the past three months attending team meetings by video conference. She told us that her boss makes little effort to bring her into the conversation or solicit her input on issues outside her remit. He seems to give her less consideration, guidance, and encouragement than he gives others on the team and has barely gotten to know her; indeed, she said, they haven’t had a single meaningful conversation. “He’s just so frustrating,” she confided, adding that she was already thinking about reactivating her still-warm job search.

The point is that talented, productive employees can easily begin to feel like outsiders, owing to neglect or errors of omission — such as failing to ask questions of, listen to, support, praise, or help develop them. Since those are not transgressive behaviors, leaders are usually unaware that anything is wrong for significant periods of time. Moreover, recent research by Nikos Dimotakis of Oklahoma State University and colleagues suggests that the quality of relationships between managers and direct reports can fluctuate even from week to week. That’s why it’s so important to regularly evaluate how you’re managing everyone and head off potential tensions.

Borrowing from the Dimotakis team’s research methodology, we advise managers to start with a short audit at the end of each week — a natural time period that’s long enough to make it representative but short enough to recall the details of your various interactions. For each direct report, ask yourself three simple questions to gauge the strength of your relationship. (To overcome self-serving or socially desirable responses, we suggest simple yes-or-no answers.)

Did you seek the person’s company? Did your interactions extend beyond immediate tasks to discuss big-picture issues or to engage in social conversation?
Did you acknowledge the person’s capabilities? Did you elicit input (opinions and suggestions) in meetings or defer to the subordinate’s ideas?
Did you assist the person’s growth? Did your words or actions contribute to learning and development, such as through stretch assignments, coaching, or constructive feedback?

If the answer to even one of these questions is no — particularly if that happens two or three weeks in a row — you must address the deficit. To build greater rapport, reach out and identify common ground you may have overlooked (for example, children, hobbies, or upbringing). Perceived similarity is a strong driver of liking. To make your people feel more competent, invite their suggestions or ideas, and give them a chance to tackle problems their way. Acknowledge their expertise and accomplishments and stay open to explanations if they underperform. To foster growth, discuss their career aims and give them challenging tasks, upward visibility, and public praise for successes.

Repairing a Relationship

When leaders fail to adequately manage their out-groups, frustrated members can reach a boiling point that becomes impossible to ignore. We recently saw a dramatic example of that. Hashim, a partner in an investment bank, learned from a peer that one of his direct reports, Stefan, was bad-mouthing him behind his back. “He would sit quietly during meetings and say nothing,” Hashim recalled. He realized that this was partly his failing; because he didn’t have the same chemistry with Stefan that he did with others on his team, he was treating him differently. “I probably wasn’t paying sufficient attention or asking myself how he was doing,” Hashim conceded. He decided to clear the air.

However, when he approached Stefan to discuss the problem, he was quickly rebuffed. “No way I can work with you,” Hashim says his subordinate told him. “And by the way, I’m interviewing for a new job.” Stefan didn’t get the role, and Hashim couldn’t fire him while his performance remained satisfactory.

In cases like that — even when the relationship seems beyond repair—you can temper your employee’s negative emotions and possibly turn the situation around. We recommend three steps.

Prepare for the conversation. Role-playing with a coach, a trusted colleague, or even an empty chair can help. Simply visualize the disgruntled out-group team member and talk to that person, explaining your thoughts and feelings about how you relate to each other. That will let you articulate your views on the relationship and help release any negative emotions. Then physically switch places, pretend you’re the employee, and respond to what you just said from that perspective. You can continue this imaginary dialogue through several rounds to elicit fresh insights on both sides’ thinking in a risk-free way, to understand your contribution to the problem, to get a more realistic understanding of how the conversation may unfold, and to help to build empathy for your subordinate. We’ve found that executives are more receptive to their counterparts’ messages during an actual discussion if they’ve challenged their convictions and causal attributions beforehand.
Engage. To create an environment in which skeptical subordinates feel they can safely talk about their out-group pain, bosses must first minimize the power differential. It helps to meet on neutral ground and set the tone by explicitly acknowledging the employee’s right to see things differently, to challenge, and to disagree, and your own responsibility for allowing an uneasy dynamic to spiral. You might open the conversation with something like: “I’ve been thinking about my working relationships with the members of our team. I sense that a couple of them, including ours, are not as productive as they might be. I realize that I’ve contributed to that situation, and I’d like to improve both our relationship and the way I support you.” After that, we recommend turning to the practical guidance on difficult conversations offered by Harvard Law School’s Douglas Stone, Bruce Patton, and Sheila Heen. Have a “learning conversation” by surfacing and separating out your respective perceptions of what has happened, the impact on each of you, your contributions, how you feel about the situation, and how it affects your identities. Useful prompts include “How do you see it?,” “Say more about why this is important to you,” and “What could we have done differently?”
Make a plan. In our experience coaching top teams, we’ve learned that a good way for a boss and a subordinate to start rebuilding trust is to spell out what’s critical to each person and commit to changes. (See the table “A Helpful Contract.”) That signals your good intentions, confirms your desire to bring your subordinate closer, and creates a joint sense of accountability. Make sure this plan is developed through a fair process, includes creative options, and has a realistic end point. The aim is not to become friends but to reestablish a productive and respectful relationship—in which you can work together toward a common professional or organizational goal—even if that includes easing the subordinate’s transition to another team.

A Helpful Contract

Though managers and disgruntled out-group employees rarely observe a formal code of conduct, here’s an example of how they might set ground rules.

Through a series of facilitated conversations, Hashim and Stefan managed to come to an agreement whereby Stefan would stop griping and continue to do his job, while Hashim would support him in finding transfer opportunities. The outcome was more damage limitation than repair, but it helped. Hashim neutralized a disruptive subordinate, improved team spirit, and protected his reputation.

. . .

Managers often fail to notice that they have out-groups because they get positive feedback from their in-groups and know they aren’t “bad” bosses. But letting any employee feel neglected can entail big costs. That’s why it’s so important to recognize when team dynamics feel uneven; to head off conflicts; and to endeavor to repair any damage already done. Tremendous opportunity lies in learning to better manage your out-group. Even a modest increase in consideration, coaching, and appreciation can boost productivity, well-being, and cohesion.

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