Understanding the True Cost of Micromanagement

28th February 2018

The perils of micromanaging staff hit the headlines recently after the Australian Taxation Office was criticised for a memo encouraging employees to report colleagues for taking longer lunch breaks or easing themselves into the working day by eating breakfast while reading the news at their desk. The ATO argues that wasting time at work is fraud, however critics say the memo is tantamount to an intrusion of privacy, will create poor company culture, and will turn employees against one another.


The result? Likely a higher turnover of staff as well as a lowering of motivation and productivity.

The desire to micromanage tells an employee their performance is not highly rated and their judgement not trusted, thus leading to disengagement. Take this drop in motivation and productivity and rise in disengagement and a company could be looking at a substantial financial knock-on effect.  

Counting the Cost

Research has shown that disengaged employees engaging in absenteeism or feigning sickness costs the average 10,000-person company $600,000 (approx 430,000 GBP) per annum in salary for days when no work was performed.


Clearly resisting the temptation to micromanage staff and increase their engagement and productivity is key - but how? One way is to focus more on what an employee is good at and less on the negatives. Obviously, if that person is seriously under performing they may need to be let go or go through disciplinary procedures. But if they excel in some aspects of their job, increasing their workload in that area while handing over a task they are not so great at to another employee will add more value to an organisation.

Focus on the Positive

The other benefit of this redistribution of work, assuming all relevant parties are happy, is that it will help minimise the cost of staff turnover and the headache of dealing with the talent shortage. It’s a win-win: the employee is more productive and the boss spends less time micromanaging.


Another factor shown to have a positive effect on staff performance and engagement are flexible working conditions. If the structure allows for it, implementing a flexible working policy will go a long way to helping attract, and retain, talent. It can have financial perks too as many people now place more importance on flexibility than on salary alone. For those seeking employment, enquiring whether the organisation offers flexi-work is a good idea as many companies do - half of UK employers in fact - but surprisingly only one in ten job adverts mention it.  

Research has shown that disengaged employees engaging in absenteeism or feigning sickness costs the average 10,000-person company $600,000 (approx 430,000 GBP) per annum in salary for days when no work was performed.