As European organisations navigate complex economic challenges — from the lingering productivity puzzle in the UK to Germany's manufacturing slowdown and fragmented political landscapes across the continent — the role of managers has never been more vital. While executives and other organisational leaders focus on broad strategy, it's middle managers who translate vision into execution and directly shape the daily experience of employees across Europe's diverse workplaces.
Last autumn, Perceptyx’s Center for Workforce Transformation examined the impact of managers on various facets of the employee experience. The findings provide a revealing snapshot of management effectiveness across all the areas in which we operate. In this article, we want to take a deeper look at Europe and highlight the significant influence managers have on critical business outcomes there.
The State of Management in Europe
The research reveals considerable variation in how European employees rate their managers. Only 1 in 8 employees rate their direct manager as "Excellent," while 1 in 4 consider their manager "Very Good." At the other end of the spectrum, fewer than 1 in 10 employees rate their manager as "Poor."
These ratings matter significantly because manager quality correlates strongly with multiple business outcomes. Understanding what distinguishes excellent managers provides organisations with a roadmap for developing leadership capabilities that drive organisational success.
Key Qualities of Excellent European Managers
Our research identified several factors that consistently distinguish top-rated managers from their peers:
Keeping Commitments
Trust forms the foundation of effective management. Overall, employees are nearly twice as likely to say their manager is "Fair" or "Poor" as opposed to "Excellent." However, when workers can say their manager regularly keeps commitments, this changes dramatically. For those employees who can trust their manager, nearly 5.5x more rated their managers as "Excellent." This reliability builds confidence in leadership and establishes credibility that enhances a manager's effectiveness.
In European work cultures, where work-life boundaries are often more defined than in other regions, commitment-keeping takes on particular importance. When managers honour their word regarding deadlines, resources, or career development opportunities, they demonstrate respect for employees' professional boundaries and personal time.
Building a Culture of Openness
Managers who create environments where employees feel comfortable discussing concerns are 3.1x more likely to be rated "Excellent" than they are to be rated "Poor" or "Fair." This openness serves multiple purposes: it allows employees to raise issues, present new ideas, and challenge established ways of working.
In European contexts, where many countries have strong traditions of employee representation and consultation, creating genuine cultures of openness can harmonise these formal structures with day-to-day management practices. This approach leverages European workplace expectations around voice and participation to drive innovation and problem-solving.
The Business Impact of Manager Quality
Our research also clearly demonstrates that manager quality has a major impact on key business outcomes:
Talent Retention
Excellent managers have a powerful effect on employee retention. Employees who rate their manager as "Excellent" are 1.3x more likely to commit to staying with their organisation for at least the next 12 months compared to those who rate their manager as "Poor" or "Fair."
More strikingly, employees who give their managers poor ratings are 5.4x more likely to consider leaving their organisation within the next year. In today's competitive European talent market, where skills shortages affect sectors from technology to healthcare, this retention impact has significant financial implications — Oxford Economics and Unum estimate the average cost of turnover for an Employee earning £25,000 a year is £30,615 (and that number is itself probably quite conservative).
Beyond basic retention, employees with excellent managers are:
- 1.4x less likely to engage in any type of job-seeking behaviour,
- 3.2x more likely to recommend their organisation as a great place to work,
- 2.4x more likely to be fully satisfied with growth and development opportunities,
- 2.8x more likely to believe career opportunities exist for them at their organisation, and
- 6.5x more likely to be fully engaged in their work.
These multipliers demonstrate how manager quality creates a positive cascade effect across multiple dimensions of the employee experience.
Productivity and Quality
Manager quality directly affects productivity and work quality. Employees who rate their manager as "Excellent" are 1.4x more likely to report increased productivity compared to the previous year. Conversely, those who rate their manager as "Poor" or "Fair" are 5.1x more likely to report decreased productivity.
The impact on work quality is equally significant. Nearly seven in ten employees with excellent managers report that their work quality has improved compared to the previous year. In contrast, only one in four employees with poor or fair managers report quality improvements.
In European economies still recovering from pandemic-related disruptions and persistent productivity challenges, these productivity and quality effects represent a significant opportunity for organisations to improve performance through better management.
Innovation and Creativity
Manager quality also correlates strongly with innovation. Nearly 4 in 5 employees who rate their manager as "Excellent" report making significant innovations at work this past year. Additionally, these innovations come more frequently. Employees with excellent management are 1.6x as likely to report at least three innovations over the last year than those with weaker management.
For European organisations competing in global markets, where innovation leads to competitive advantage, this finding underscores the importance of management development as a driver of creativity and new ideas.
Health and Well-being Impact
Perhaps most concerningly, poor management significantly affects employee health and well-being. Employees who rate their manager as "Poor" or "Fair" are:
- 2.9x more likely to have experienced declining mental health,
- 2.5x more likely to have experienced declining physical health,
- and 1.7x more likely to experience sleep issues every day.
Weak management also relates to regular and immediate well-being concerns. Employees with weak managers are more than twice as likely to report that workplace stress is creating negative outcomes such as sleep difficulty, negative coping behaviors, and relationship stress. Concerningly, they are 1.8x more likely to report that all of these problems occurred more than three times in the last week. In contrast, 9 in 10 employees with excellent managers agree they can balance their work and personal lives, compared to fewer than half of those with poor or fair managers.
These health impacts are particularly significant in European contexts where many countries have strong social support systems and workplace regulations designed to protect employee well-being. Even with these protections, the research shows that manager quality remains a leading determinant of health outcomes.
Recommendations for European Organisations
Based on these findings, organisations should focus on three key areas to improve management effectiveness:
Accountability
- Establish clear expectations that managers keep commitments to their teams.
- Implement systems where team members can provide feedback on manager reliability.
- Ensure managers of managers hold their direct reports accountable for commitment-keeping.
Transparency
- Train managers to communicate openly and honestly, even when delivering difficult news.
- Encourage managers to provide thorough explanations when requests cannot be fulfilled.
- Recognise and reward managers who exemplify transparency in their leadership.
Empowerment
- Create conditions where employees feel safe to innovate and improve work quality.
- Give employees appropriate autonomy to demonstrate trust and encourage ownership.
- Provide managers with tools and training to effectively delegate and develop their teams.
Perceptyx Can Help Your European Organisation Develop Better Managers
The data is clear: Managers directly influence numerous business and talent priorities. Measuring and driving manager behaviour change at scale is essential for both organisational and individual success. Perceptyx's comprehensive listening and development solutions can help you identify management strengths and opportunities while implementing targeted development programmes.
To learn more about European workplace trends and how Perceptyx can help your organisation build stronger management capabilities there, download our Trends in Employee Engagement: A European Perspective special report or schedule a meeting with a member of our team.
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