By Nicholaus Garcia
Aug. 25, 2016
Diana Pisone, team principal at Ted Moudis Associates, thinks her CEO is great. Her boss, Ted Moudis, provides an excellent work culture, a loyal team and opportunities to be challenged and grow within the Chicago-based interior design firm.
“He runs the firm like an extension of his family. While we are a large established firm, to me, there is an entrepreneurial spirit to the office,” she said.
Pisone’s opinion of her boss corresponds with a new study by Glassdoor titled, “What Makes a Good CEO?”
The San Francisco-based employer review site’s economic research team provided a statistical analysis of CEO approval ratings by showing which factors affect CEO quality by using opinions of former and current employees from publicly traded U.S. companies — many of whom work closely with executive leadership.
As of July, Glassdoor had collected 1.2 million CEO approval ratings from roughly 70,000 U.S. employees. Data from the study showed 88 percent of CEO approval ratings could be sourced to four strong work culture predictors: employee opinions of senior leadership; career opportunities; compensation and benefits; and work-life balance.
“Employee opinion of the CEO can be very telling about a company, and Glassdoor data confirms there is a direct link between how employees view their CEO and how they feel about their company culture,” said Andrew Chamberlain, chief economist of Glassdoor. “CEOs and leaders who cultivate a strong company culture, offering career advancement opportunities for employees and management training for strong senior leaders, will typically gain more approval from their employees.”
Of the four predictors, employee opinions of senior leadership accounted for 44.7 percent of CEO approval ratings, the highest of all four. Statistics also showed the lowest predictor for how employees viewed their CEO was work-life balance at 9.6 percent.
As with Ted Moudis Associates, culture plays a significant role in how the company is perceived.
“There is a loyalty factor that is established here at TMA — it ties you to the company and makes you work harder for the joy of the accomplishment; it’s part of the culture that is inherent at TMA,” Pisone said.
The study also looked at the type of industry employees were submitting reviews from. The highest rated CEO approval ratings came from the real estate industry at 76 percent, with the lowest, 61.4 percent, coming from retail.
Glassdoor found other predictors were taken into account such as profitability of the company, whether the current CEO was the original founder or an external candidate, and CEO compensation. Although the study showed CEO pay was negatively linked to an employee approval rating, even after controlling for work culture and company profitability, it did not matter as much as the top four predictors.
While many variables contribute, the survey results from Glassdoor showed company culture is an essential driver of CEO approval rating. All of the top four predictors had a significant impact on how employees viewed top-level officials, suggesting that investing in company culture impacts how much employees approve of the boss.
Nicholaus Garcia is a Workforce editorial intern. Comment below or email firstname.lastname@example.org.
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