Your back-office reporting team may be making mistakes and is deserving of your feedback, but how much criticism is too much?
You should let your operations staff know you're dissatisfied with the performance, but be mindful of the way you deliver the message.
Operational managers who feel they've been wronged may feel justified in saying whatever they want.
But the problem with speaking too freely is that once the words go out, it's hard to take them back in. Your employees will have a hard time forgetting and moving on from what has been said, as humans tend to focus more on unpleasant events than pleasant ones.
Excessively negative criticism doesn't just hurt the employee; the effects can damage your investment management organization, including the financial aspect.
Given human beings' propensity to dwell on the negative, hurtful remarks will have a profound
impact on part of the operations staff member.
Negative comments like those above will cause your employees to question in their abilities, not as a motivating force, but as a de-motivating one.
Be mindful of the way you deliver criticism, how much you give, and what your intent is by sharing such comments. Our previous blog offers a guide for operations managers in improving their reconciliation reporting team, which includes better ways to communicate with your operating staff.
That employee's loss of confidence will result in worrying about doing routine tasks they otherwise did without "fear".
Sure, your back-office reporting team members could and should do a better job, and they should be aware of their weaknesses, but being afraid of doing the work itself reverses the progress they'll make.
Maybe they struggle processing corporate actions or translating uncommon security types in the Moxy blotter, but if you have a tendency to get upset when they ask you for help, then they're just hoping that the next day is an "easy reconciliation day", where no corporate actions processing or tricky cash and positions breaks are present.
As a result, your staff will not improve when their view towards new and challenging work is avoiding it.
It's not enough to tell your employees "not to take things personally". Never assume that negative statements can be easily washed away by sprinkling in a few positive ones.
You can disagree with the way humans process good and bad news, but you can't change human psychology.
The reality is too much negative criticism is personal, and under those conditions, your staff will:
Your operational performance will certainly suffer if your staff feels this way about you.
Just like the Twisted Sister song, it gets to a point where your back-office reporting team is "not gonna take it anymore".
If the criticism is too much, employees will no longer feel welcome or valued at the advisory firm. They will feel less committed to advancing the organization's goals, and they'll seek an exit strategy by sending out their résumé to rival money management firms. The prospect of leaving your operations becomes their saving grace as they come into work.
Maybe you think it's good some of the staff members are leaving, but be careful. Maybe you really don't want to see some employees leave, but if the criticism and negativity is too much for them, even the good ones will plan their resignation.
And in a strong jobs market, more employment opportunities make it easier for workers to switch companies, which means more competition for your investment management firm in the hunt for top talent, as one of our previous blogs demonstrated. Finding a better replacement may not be as easy as you think.
Employee disengagement negatively affects productivity and performance. A Harvard Business Review report revealed that disengaged workers had 37% higher absenteeism, 49% more accidents, and 60% more errors and defects.
The onslaught doesn't stop there. The report also mentioned that organizations with low employee engagement scores experienced 18% lower productivity, 16% lower profitability, 37% lower job growth, and 65% lower share price over time. In contrast, businesses with highly engaged employees enjoyed 100% more job applications.
Lack of employee loyalty is also costly. A study from the Society for Human Resources Management (SHRM) predicts that employee turnover costs a firm 6 to 9 months of the departed employee's annual salary, as the expenses are derived from recruiting, hiring, and training.
The effects of excessive and negative criticism are far-reaching and cannot be taken lightly. Not only does it affect their confidence in their portfolio accounting abilities, but they're afraid to do the reporting work.
Humans' predisposition to dwell on the negative more than the positive means they will clearly remember hurtful things said to them, and this affects everything from their personal relationship with you to their job performance.
Poor performance is tied to lower employee engagement and loyalty, and there are financial
consequences for these actions.
It's one thing to offer constructive feedback or let your back-office reporting team know when you are dissatisfied (and you should), but now that you are aware of how harmful negativity can be, pay attention to your language, tone, and what you intend to accomplish when voicing your displeasure.
By making the right changes, your operations will be a happier and a more productive environment.
Our monthly newsletter features helpful resources, articles, and tips to implement at your investment firm. Enter your email below to subscribe: