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This Is What Employees Believe Makes a Great Leader

This Is What Employees Believe Makes a Great Leader
Image credit: Bloomberg / Contributor | Getty Images
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If you want your employees to like you, start by giving them more and giving yourself less.

Today, Glassdoor has released findings from a study designed to pinpoint What Makes a Great CEO? The researchers examined how employees evaluate various aspects of their workplaces and compared their satisfaction levels to how they rated their CEOs. The study comprised employee reviews from 690 large, publicly traded U.S. companies.

Related: These CEOs -- Including Some of Your Favorites -- Are the Most Highly Reviewed by Their Employees

Researchers discovered that employees tend to give highly paid CEOs low ratings, compared with those who receive lower salaries. When overall employee satisfaction is higher within a company, however, handsomely compensated CEOs receive slightly better ratings.

“Past Glassdoor research on CEO-to-worker pay ratios has shown, on average, CEOs earn 204 times the median pay of their workers,” according to a Glassdoor press release announcing the new study. “New rules going into effect in 2017 requiring public companies to disclose the ratio of CEO compensation to median worker pay could have more of an effect than just greater transparency."

Several factors contribute to employee satisfaction, and ultimately, CEO approval. When it comes to company culture, the study found that senior leadership has the greatest impact on a CEO’s approval rating. In other words, CEOs who surround themselves with other great leaders are perceived more favorably by their employees.

Other aspects that influence company culture, such as career advancement opportunities and compensation and benefits, proved less significant than senior leadership. Aside from CEO salaries, biographical characteristics of the top bosses, including gender, age, education and job tenure, have no detectable effect on their approval ratings, according to Glassdoor.

One surprising finding is that companies with lower work-life balance ratings tend to have higher CEO approval ratings, suggesting that employees are willing to devote more time to work if they are satisfied with or inspired by their company’s leader. This is contrary to previous Glassdoor research that suggests that work-life balance contributes to higher employee satisfaction.

Related: 4 Ways to Get Truly Honest Feedback From Employees

This may be why CEOs of more profitable companies receive higher approval ratings, regardless of industry and company size. Employees who like their CEOs don’t mind working more, and higher productivity improves the bottom line. Conversely, it’s possible that employees rate their CEOs higher when their companies are performing well, Glassdoor notes.

Finally, Glassdoor found that employees favor entrepreneurs. That’s no surprise to us (we’re biased). CEOs who are the founders of their companies are more likely to have higher approval ratings than external hires or internally promoted chief executives. On average, being a founder boosts a CEO’s approval rating by 3.2 percent. If you can execute your vision from idea to IPO, you’ll be more apt to win the hearts of your employees.
Edition: December 2016

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