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Research shows that compassionate people make better business leaders

In the month after Elon Musk triumphantly announced his takeover of Twitter with his now-famous “the bird is freed” tweet, he enacted a massive culling of the social media platform’s global workforce. While Musk’s rationale for this move was to make Twitter more efficient, the way he implemented the cuts was widely criticized as showing a lack of compassion for employees.

Thankfully, the public has spoken and Musk has pledged to resign after being embarrassingly voted out in his own poll. But what can we learn from this, and what kind of leader does Twitter need to move forward?

Twitter could instead benefit from a more thoughtful and caring approach to leadership. Research shows that compassionate leaders increase staff morale and productivity, not to mention project a more positive image of an organization and its brand to the world.

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Compassion in this context can be understood as a leader who is understanding, empathetic and strives to help his employees. This kind of leadership is needed now more than ever. Businesses are going through tough times due to the lasting effects of the pandemic and the rising cost of living. The UK has already experienced a slump in productivity growth and a fall in living standards since the 2008 financial crisis, which will continue over the next two years. Brexit has not helped this situation.

Such testing times warrant organizational leadership by compassionate and competent individuals with sound judgment and effective coordination skills. This also applies to political leadership. The UK has seen a lack of this in recent months as it faced “party gate”, reported bullyingand harassment in government offices, and the dire effect of recent leadership decisions in the economy.

International leaders don’t fare much better. The US seems to have become much more polarized leading to the Riots in the Capitol and faced accusations of a “leadership vacuumduring the pandemic. Compassionate leadership seems to have been scarce in the EU slow responses to COVID and the energy crisis. All of these examples suggest that there is a need for more compassionate leadership.

What is a good leader?

Research shows that good leadership helps companies to be more competitive and improve performance, especially in the areas of innovation and agility. One study argues that good leaders gain followers because of three main characteristics: sound judgement, expertise and coordination skills. These qualities enable leaders to lead by example.

Unfortunately, not all leaders fit this picture. A recent European survey found that 13% of employees have ‘bad’ bosses, although the participants tended to rate their bosses worse on competence than on attention. Yet poor leadership can negatively impact employee morale, well-being and productivity. A overview of studies in this area reported that employee well-being is typically better served when companies – and their leaders – give employees some control and more opportunities for their voices to be heard and for greater participation in decision-making.

In addition to the competence and coordination skills that have emerged in much research to date, according to my research that soft leadership skills are also important. It’s about being compassionate and making others — especially employees, but also suppliers and customers — feel important. Leaders with suchsocial skills” are not only technically proficient, they can look at a problem from a human perspective and think about how it can affect people.

My recently published research drew on nationally representative data from the 2004 and 2011 Workplace Labor Relations Survey, which surveyed more than 3,000 organizations and more than 35,000 employees. They were asked to rate their managers on a five-point scale in terms of certain soft leadership skills, chosen to measure leaders’ impartiality, trustworthiness and empathy.

These employees were asked if their managers:

  • could be trusted to keep their promises
  • were sincere in their effort to understand employees’ views
  • treated employees fairly
  • understood that employees had responsibilities outside of work
  • stimulated people to develop their skills
  • treated employees fairly
  • and maintain good relationships with employees.

The results suggest that employees’ perceptions of good leadership quality are also positively influenced by optimistic managers when discussing organizational performance. This kind of leadership increases employee well-being, so that employees experience more job satisfaction and experience less work anxiety.

This research suggests that compassionate leaders help improve both business performance and employee well-being. It shows that improving the quality of leadership pays off. This can be achieved through the recruitment, assessment and training of leaders who improve soft leadership skills.

Good leaders are important. As organizations and society in general are going through particularly difficult times, compassionate leadership can make a real difference to future business success.The conversation

Getinet Astatike Haileassociate professor of industrial economics, University of Nottingham

This article has been republished from The conversation under a Creative Commons license. Read the original article.


Shreya has been with australiabusinessblog.com for 3 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider australiabusinessblog.com, Shreya seeks to understand an audience before creating memorable, persuasive copy.

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