Why Are There Middlemen for Health Insurance?

What It Takes to Be a Powerful Leader

Source: Shutterstock

By Daniel Butcher

To climb the ladder in your profession and achieve success, hard work is table stakes, not a differentiator. And to progress from rank-and-file employee to manager to respected, powerful leader might require a fundamental mindset shift of letting go of a need to be seen as likeable and authentic while cultivating professional relationships.

Academy of Management Scholar Jeffrey Pfeffer of Stanford University, one of today’s most influential management professors and researchers, offers some takeaways on that subject from his book7 Rules of Power, which isa manual for increasing the ability to get things done and benefitting from job performance.

“Good performance by itself is not necessarily going to bring you the level of career success that you need,” Pfeffer said. “In addition, you need technical and political skills to have your boss recognize your good contributions.

“If you think about management, and leadership is managing through other people, you need to learn how to interact with other people across your organization in ways that build your influence and permit you to get the things done that you want to get done,” he said.

Pfeffer’s seven rules power are:

1. Get out of your own way: “Lose the self-descriptions and inhibitions that hold you back, for example, the idea that you have to be liked, because, as an executive, you’re hired to get things done, not necessarily to win a popularity contest. Lose this currently popular idea that you need to be quote-unquote authentic, which is, of course, incorrect.”

2. Break the rules: “In strategy and organizational leadership, if you do what everybody else does, you will probably not succeed—you need to differentiate yourself.”

3. Show up in powerful fashion: “Body language and how we communicate is obviously important.”

4. Create a powerful brand: “If you’re perceived as a powerful, effective, efficacious leader, then that becomes a self-fulfilling prophecy—good people want to work with you, invest with you, and buy from your company.”

5. Network relentlessly: “That’s something that people often don’t want to do, so they underinvest in networking because they feel dirty about it and don’t see it as the value-adding activity that it is.”

6. Use your power: “Not all use of power will be met with unalloyed approval, so leaders need to be willing to incur some level of social disapproval. But because most people are usually averse to conflict, it is surprising how much one can accomplish by seizing the initiative.”

7. Understand that once you have acquired power, what you did to get it will be forgiven, forgotten, or both: “Once you have power and status and success, no one will care how you got it, and people will people will accommodate themselves, because people like to be close to power.”

Upon reading or hearing about those precepts and their implications for workplace power dynamics, many people have an adverse reaction. That’s natural and understandable, Pfeffer said.

“Every person should understand and come to terms with the seven rules of power, and most will go through stages: first, denial—‘This doesn’t work in my organization’s culture’—then they will have anger, which will mostly be directed at me, which is fine,” he said. “Then they will have sadness—‘I’m depressed by it’—and finally, they often come to acceptance that this is not only the way the world works, but they can build agency around this.

“My biggest contribution is causing them to see their own agency and encouraging them to be more ambitious and more agentic around navigating their own career and getting their boss to recognize their talents, instead of sitting back and waiting for the human resources department to offer promotions and raises.”

The Gender Pay Gap Gets Worse Over Employees’ Careers

Source: Shutterstock

By Daniel Butcher

The gender pay gap between the earnings of male and female business professionals starts small on average but tends to grow over time.

“It’s so interesting that when we look at pay gaps among male and female MBA graduates coming out of the same program in the same year, the gap is so small; it’s really little initially,” said Academy of Management Scholar Carol Kulik of the University of South Australia. “But the problem is, it gets bigger every year, because the way we usually get people pay raises is we make it a percentage of their past salary, and so any sort of pay gap that you have in the first year after graduation gets a little wider, year after year.

“And women are still primarily responsible for caring for children and elderly family members,” she said. “And so they have these career gaps, where they step off the career ladder for a bit, and when they come back, they never quite catch up on the pay raises that the men in their cohort have gotten.

“By the time they get into executive roles, this gap can actually be really wide.”

Taking a step back, Kulik said that it’s important for leaders to recognize that there are gender pay gaps, even at the highest levels of organizations.

“From the public’s perspective, they say, ‘These are women at the top of their game, and companies are under so much pressure to hire women and have women represented in senior roles; surely, they can just negotiate a higher wage,’” Kulik said. “But you’re talking gaps of 20%—that’s a big ask when you’re going into one of these senior roles.

“I want to emphasize that the gap is big, and it’s really important to talk about it, especially because in executive roles, a lot of times the biggest part of your salary is not in the base salary; rather, it’s in all the discretionary bonuses that you get for good performance,” she said.

“The higher you get in an organization, the more subjective performance evaluations are, so it’s harder to tell when you’re a high-performer, and so we tend to see very big gender pay gaps among senior executives.”

A sample of Kulik’s AOM research findings:

• Keeping Older Workers Engaged
• Engage Me: The Mature-Age Worker and Stereotype Threat
• Aging Populations and Management
• Physical Environments and Employee Reactions: Effects of Stimulus-Screening Skills and Job Complexity
• Relations Between Situational Factors and the Comparative Referents Used by Employees

A Downside of Human Resource Management Devolution

Source: Shutterstock

By Daniel Butcher

Human resource management (HRM) devolution—leadership transferring HRM responsibilities from specialist executives to managers—is becoming more common worldwide. However, there’s debate over whether it helps employees and organizations or adds too much to managers’ already-full plates.

Academy of Management Scholar Carol Kulik of the University of South Australia noted that HRM devolution is controversial.

“We’ve taken all these activities that used to be the responsibility of HR managers and units and put them in the hands of line managers,” Kulik said. “There’s some research that shows that individual employees have on average two important people-management conversations every week.

“They aren’t having those conversations with HR but rather with their line managers,” she said. “You can have the best people-management practices in the world, but it really comes down to how your individual line manager enacts them on a day-to-day basis.”

Kulik emphasized that managers’ jobs have gotten so much harder. Often, they get insufficient training before being promoted. Further, many are now responsible for managing more employees with smaller budgets.

“Even when they have budgets that look large, because they’re spreading it across more employees, they don’t have as many dollars for training or for rewarding top performers,” Kulik said. “And they’re now managing people on hybrid schedules or in remote environments that they never worked in themselves, so the job itself is getting much, much harder.

“There’s evidence right now that people don’t even want to become line managers—they’re saying, ‘I just want to spend my whole career being an individual contributor,’” she said. “So here’s this incredibly important job, and we have line managers who have never received formal training in people management, because they didn’t see that as part of their the primary part of their role.

“And yet, they’re this critical linchpin in an organization.”

A sample of Kulik’s AOM research findings:

• Keeping Older Workers Engaged
• Engage Me: The Mature-Age Worker and Stereotype Threat
• Aging Populations and Management
• Physical Environments and Employee Reactions: Effects of Stimulus-Screening Skills and Job Complexity
• Relations Between Situational Factors and the Comparative Referents Used by Employees

Transparency Alone Doesn’t Solve Unequal Pay

Source: Shutterstock

By Daniel Butcher

Are pay-transparency laws the answer to fix the problem of women earning less than men? It’s complicated.

Academy of Management Scholar Carol Kulik of the University of South Australia said she would be reluctant to remove the discretionary part of executives’ pay packages, as performance bonuses have benefits and removing them wouldn’t necessarily close the gender pay gap.

“It is certainly true that in sectors that have less discretionary elements in pay packages, we tend to see smaller gender pay gaps,” Kulik said. “For example, in general, the pay gap in the public sector is smaller than pay gaps in the private sector.

“But I don’t think we want to say, ‘Just get rid of discretionary pay,’” she said. “Incentive pay is important for motivating effort and good performance, so we don’t want to remove that.”

Evidence does show that pay transparency narrows gender pay gaps. Several U.S. states and cities have pay-transparency laws, and in February 2024, the Australian government made information about individual companies’ gender pay gaps available for the first time. But rather than raising women’s pay, transparency often leads to compression of compensation toward the middle.

“Australia is getting on a bandwagon that we see in other countries, suggesting that one of the first steps you should take is find out how big the gap is, and to look at that requires pay transparency,” Kulik said. “But it’s really interesting to see what happens when countries have made pay gaps transparent; what we find is that, over time, pay gaps get narrower.

“But it doesn’t necessarily mean that women’s wages are getting higher; it often means that men’s wage growth is slowing,” she said. “If you’re an individual manager and you know that your pay decisions are going to get scrutinized, you become a little reluctant to pay anybody on the high end, so you start creating some compression at the top.

“Now, that’s not necessarily a bad thing, if you’ve got a pay system that’s really gotten out of whack, and you’ve got a few star performers who are really pulling the whole compensation system too far to the high end—on the other hand, you don’t want to eliminate all the motivating potential of your pay system because managers are reluctant to pay what it takes to recruit and retain top performers.”

A sample of Kulik’s AOM research findings:

• Keeping Older Workers Engaged
• Engage Me: The Mature-Age Worker and Stereotype Threat
• Aging Populations and Management
• Physical Environments and Employee Reactions: Effects of Stimulus-Screening Skills and Job Complexity
• Relations Between Situational Factors and the Comparative Referents Used by Employees

Immigration Debates Rarely Mention This Important Fact

By Daniel Butcher

Many immigrants—both legal and illegal—are willing to do the kinds of unglamorous, undistinguished, and downright dirty jobs that no one else wants to do, according to Academy of Management Scholar Dean Shepherd of the University of Notre Dame. He likens their psychology to that of Dalits, India’s most oppressed and stigmatized people, many of whom are garbage collectors who scavenge through slum trash dumps for items to sell. They’re commonly called “ragpickers.”

“In some ways, immigrants think like the ragpickers, because they say, ‘I’m doing this so we can eat tonight, but I’m mainly doing this so my children get educated, so that they can get a good job, so that they can marry well, and so that our family’s future generations are going to move forward,” Shepherd said. “And researchers have found that in a lot of immigrant communities, they place a high emphasis on the children’s education—and that’s the reason they’re willing to do dirty jobs.

“They come over to a new country, and they work very hard in order for their for their children to have a better education,” he said. “That’s why they immigrate in the first place, in order to have a better life for their family.”

In the United States in 2023, foreign-born workers were more likely than native-born workers to be employed in service, natural resources, construction, and maintenance jobs, as well as production, transportation, and material moving occupations, according to the U.S. Department of Labor’s Bureau of Labor Statistics. Foreign-born workers were less likely than native-born workers to be employed in sales, office, management, professional, and related occupations.

“We spoke to ragpickers and other entrepreneurs that live in slums, and we asked them, ‘What are your personal goals?’ and they almost don’t understand the question, because their goals are all to do with the next generation,” Shepherd said. “They don’t see much hope for themselves, because when we asked them, ‘What do you plan on doing after retiring?’ they told us, ‘What retirement? I’m never going to retire.’

“It’s all about future generations, and immigrants do the same thing,” he said.

How the GOP Won the 2024 U.S. Election

Source: Shutterstock

By Daniel Butcher

The Republican Party took advantage of the headwinds facing the Democratic Party during the cycle leading up to the 2024 U.S. election, including switching presidential candidates at a late stage and persistently high inflation, for which voters blame incumbents. Regardless of the potential effectiveness of their policy proposals, winning GOP candidates spoke to American voters’ concerns about jobs and the high cost of living as many Democrats instead painted a rosy picture of the economy.

Academy of Management Scholar Tim Pollock of the University of Tennessee, Knoxville said that, in contrast with Democrats, who focused on touting the accomplishments of the Biden-Harris Administration, more Republicans were willing to talk about voters’ concerns, anxieties, worries, grievances, and other negative feelings.

“Republican candidates were willing to say, ‘Yeah, we hear you. We are going to deal with this. We’re going to bring inflation down,’ even though inflation was already coming down, and even though many of the factors across the supply chain that might have been responsible for inflation are not actually under government control,” Pollock said. “Whatever the actual reasons are, they said, ‘We hear you, and we’re going to do something about it.’ And the Dems are citing data and saying, ‘No, things are great—unemployment is low, and the stock markets are hitting record highs.’

“But if I’m living paycheck to paycheck, I don’t care what the S&P 500 is doing,” he said. “I care about the prices of eggs, meat, and gas.”

In an ironic twist, many economists are skeptical that the Republicans’ policy proposals—sparking a global trade war with high tariffs and deporting illegal immigrants—will actually improve the economy, create jobs, or bring down inflation.

“Every economist I’ve seen, heard, or read says that they’ll do the opposite—those policies would increase inflation,” Pollock said. “Increasing tariffs would only increase costs, because they’re going to get passed on to U.S. consumers, and cracking down in immigration will cause labor shortages, etc.

“But on the campaign trail, they were saying, ‘I’m going to solve the problem,’ and people are thinking, ‘Great, because nobody else is listening to what my concerns are; nobody else says they want to fix this, and they hear me and understand what I care about,’” he said.

A sample of Pollock’s AOM research findings:

• After an IPO, Celebrity and Status May Be Too Much
• How Influencers Can Gain Followers and Boost Engagement
• Six Things to Expect from Narcissistic CEOs
• Misconduct Trends Increase the Likelihood of Media Scrutiny
• How CEOs Become A-List Stars
• Celebrity CEOs Often Get Typecast into One of Four Roles

Election Loss Lessons for Democrats

Source: Shutterstock

By Daniel Butcher

Leading up to the 2024 U.S. election, Democratic candidates needed to do a better job of keeping their fingers on the pulse of American voters and taking their concerns about jobs and the high cost of living seriously, rather than insisting on painting a rosy picture of the economy, according to Academy of Management Scholar Tim Pollock of the University of Tennessee, Knoxville.

Pollock noted a disconnect between Democratic politicians’ messages and what swing voters wanted to hear.

“People are saying, ‘I’m upset about this. This is what I see in my daily life,’ and Democrats talked at a more general, abstract level, saying, ‘It’s really not that bad because of this, that, and the other thing,’ and voters think, ‘Yeah, that’s nice, but that’s not my reality,’” Pollock said. “And so if you really want to influence somebody, especially when they’re having a really strong, visceral, negative emotional response, you have to try to understand where they’re coming from, acknowledge their pain, and talk about where they’re at.

“Even if you can’t come up with a perfect solution or what you’re proposing isn’t going to really be feasible, people are going to feel better if they think they’re acknowledged and recognized,” he said. “That’s similar to what we founding the research study we did about social-media influencers, who are effective at talking about people, saying ‘you’ not ‘me,’ using language that conveys an understanding of where their audience is coming from, and talking to them about their issues—that’s what people want.

“They want to feel seen and heard.”

Media Magnify Scandals of Big-Name Companies

By Daniel Butcher

Companies that dominate their industries also have to deal with increased scrutiny. Any negative news, from layoffs and unethical conduct to data breaches, get amplified and can easily become scandals, according to Academy of Management Scholar Tim Pollock of the University of Tennessee, Knoxville.

Media attention is drawn by the accused or guilty party’s prestige, he said.

“If the perpetrator is high-reputation, they may get the benefit of the doubt for less severe misconduct as some kind of one-off thing, and the media may be less likely to cover it,” Pollock said. “But if the misconduct is severe, then the media is even more likely to scandalize the high-reputation firm’s misconduct, because we don’t expect that from high-reputation firms; it violates our expectations.

“When we have high expectations about a firm’s behavior, whether because we expect them to be more competent or act with more integrity, it’s a bigger deal and more disturbing when they violate that expectation,” he said. “That makes the incident more newsworthy to the media, increasing their coverage of the misconduct.

“These are sorts of things that we’re looking at and trying to understand: What are misconduct aspects and firm characteristics lead the misconduct to become a scandal?”

Pollock and colleagues compared the reactions to data breaches at two different companies of vastly different levels of prestige and name recognition: Facebook and Chegg, a U.S. education technology company that provides homework help, textbooks, online tutoring, and other student services.

“Facebook had a data breach of 50 million accounts; it was covered widely in the media and got lots of attention—thousands of articles were written about their data breach and the problems with it,” Pollock said. “And literally on the same day, Chegg, which is an academic software company, had a similar data breach—40 million accounts were breached, but it was barely covered outside of the the specialist media on data security, and a little bit in the in the education sector.

“So why Facebook and not Chegg? Facebook is better known,” he said. “More people use Facebook and have given them their data, so the expectancy violation is greater and possibly more personal.

“Journalists recognize this, and thus are more likely to scandalize the incident, because it attracts more readers.”

The Disconnect Between Leaders and Patients on Healthcare

By Daniel Butcher

Many people hurt by the high costs and insurance denials plaguing the U.S. healthcare industry might have been hoping that the response to the December 2024 killing of UnitedHealthcare CEO Brian Thompson would lead to reforms. However, most industry executives have tried to go back to business as usual, except with heightened security for senior executives, according to Academy of Management Scholar Tim Pollock of the University of Tennessee, Knoxville.

In response to the waves of criticism directed at U.S. health insurance and benefits-administration executives in the wake of Thompson’s killing, most industry leaders followed a typical crisis-management playbook, including a predictable public-relations script, he said.

“They’ve been saying all the things that they always say: that they’re beholden to achieving financial goals and medical providers’ increasing costs—‘medical costs go up, and so the insurance premiums have to go up’—and that they’re doing their best to provide coverage, and all these sorts of things, the usual platitudes that they roll out,” Pollock said. “But in terms of actually making some substantive changes, they don’t do much.”

“We’re one of the only countries in the world where healthcare coverage is privatized, and we’ve got the most expensive healthcare in the world with the 44th-best health outcomes,” he said. “It’s hard to justify the status quo on any rational basis.

“So if they want to repair and protect their reputation with customers and avoid this kind of backlash in the future, they have to understand where the customer is coming from and then find ways to speak to those problems and offer up a set of policies or practices they’re going to engage in—changes they’re going to make—to make this easier and better for customers.”

Health industry executives who try to defend the status quo of the U.S. healthcare system come off as tone-deaf at best, and uncaring or willfully dismissive of people’s suffering at worst.

“One of the mistakes that a lot of CEOs make is they try to defend the status quo, instead of saying, ‘You’re right; we’re not doing what we should be doing,’ and then, ‘Here’s what we’re going to do to make it to make it better,’” Pollock said. “There’s a whole other set of issues related to whether or not these things get implemented, but at least symbolically acknowledging their pain, their anger, taking some responsibility for it, and then saying, ‘We’re going to make changes that will address these problems and make things better going forward’ counts for something.

“But if they come out and talk about profitability, that their responsibility is to shareholders, or that this isn’t really a problem, or try to downplay the challenges that people have with high costs, denials of coverage, and administrative burdens, there’s a disconnect from patients’ experiences,” he said. “This is the issue you run into when leaders and customers are coming at a problem from opposite sides or completely different perspectives.”

Why Many Leaders Ignore Criticism

By Daniel Butcher

In the wake of the U.S. public’s reaction to the killing of UnitedHealthcare CEO Brian Thompson and the arrest of suspect Luigi Mangione, some CEOs in the health insurance industry downplayed the tragedy, rather than thinking about the root cause of people’s anger directed toward them.

Keeping blinders on is a red flag for narcissism, according to Academy of Management Scholar Tim Pollock of the University of Tennessee, Knoxville. He and Arijit Chatterjee of ESSEC Business School researched narcissistic CEOs and found that the more narcissistic the executives are, the more likely they are to ignore critical messages, and surround themselves with yes-men.

“Many CEOs, especially narcissistic ones, surround themselves with people who say, ‘No, don’t listen to the critics. You’re great. You’ve done nothing wrong. Everything’s wonderful,’ as opposed to saying, ‘Hey, we’ve got a real problem that we need to fundamentally think through and deal with,” Pollock said. “So there’s nobody to rein in CEOs when they’re making bad decisions or alert them to a blind spot that they have.

“We all have good ideas and bad ideas, but leaders need people to tell them when they have a bad idea and to stop them from from acting on it,” he said. “When you don’t have those people in place telling the CEO to tap the brakes, the bad ideas just spread, and a narcissistic CEO doesn’t want to hear the negative stuff, whereas a less narcissistic CEO who really wants todo the best job possible will actually cultivate that and make sure they have people around them who will tell them the truth, even if it’s something that they don’t really want to hear, but that they need to hear.

“But a narcissistic CEO will fire truthsayers; they’ll get rid of people who they perceive as disloyal for telling them negative stuff or telling them that they’re wrong.”