Bad bosses usually think theyre awesome

Bad bosses usually think theyre awesomeBad bosses usually think theyre awesomeWhen you enter the meeting, your palms are sweaty. Your nerves have really got the best of you this time- what if you give your presentation, and as soon as he hears about your vision for this project, everything goes up in flames as he rips your confidence into shreds?You almost feel like theres no point in bringing up the fact that his treatment isnt fair, because as everyone knows, his yep is law. You think,Who am I to communicate to the person who hired me that theyve crossed the line.Take comfort yes, you do have a terrible boss. But your boss doesnt know hes terrible. He (or she) thinks he is absolutely awesome.Dont believe it? Well, its science.Terrible leaders get that way by being paid too muchIts all about self-perception. Overconfident leaders tend to think highly of their own leadership, which is why they demand large pay packages and have trouble believing that things may not be working out.Ah ighly-paid CEO may actually hurt a business, according to 2013 researchby researchers from the University of Cambridge and Purdue University.High pay, in other words, does not guarantee that a leader will turn in strong performance, as measured by a companys stock price. In fact, its quite the opposite the higher paid a leader, the mora likely the company will suffer under his leadership.Firms that pay their CEOs in the top ten percent of excess pay earn negative abnormal returns over the next three years, the researchers found.Why? Because higher pay tends to make people believe theyre right. If they were always wrong, the thinking goes, they wouldnt be paid so much, right? So the leaders tend to splash out on big, expensive plans that eventually lose money.The findings seemed to be driven by high-pay induced CEO overconfidence that leads to shareholder wealth losses from activities such as overinvestment and value-destroying mergers and acquisitions, the article said.Overconfidenc e hurts leaders and the companies they runTheStanford Graduate School of Businessand the Wharton School looked at overconfidence in leaders, as measured by their investment decisions.Overconfident leaders invariably think that companies will 100% improve under their leadership. How do we know that? Because as soon as they take over a company, they gather more and more stock and have trouble letting it go.CEOs who are overly convinced about their own leadership capabilities are not actively trying to get rich at shareholders expense theyre just misperceiving the situation, saidUlrike Malmendier, an assistant professor of finance at Stanford Graduate School of Business and a co-author on the study.Using data on the CEOs of 477 Fortune 500 companies from 1980-1994, the researchers tracked CEO overconfidence by studying the tendency of a CEO to overly invest in his or her own company by habitually buying its stock or by holding-gesellschaft on to stock options long beyond the point when they should be exercised, according to the Stanford Graduate School of Business.The study found that a typical CEO will invest 19% of available marginal cash flow in investment projectsbut an overconfident one will invest 36%, according to the Stanford Graduate School of Business.Malmendiertold the institutionthat overconfidence can sometimes be good for leaders to have.The role of narcissismStill, arrogance in management is rarely benign. It couldput a company in danger.A 2012 study on CEO narcissism and fraud found that narcissistic CEOs behave unethically to obtain their goals and satisfy their constant need for praise and admiration. Highly narcissistic CEOs may achieve greatness for their companies. However if left uncontrolled, too much narcissism may result in unethical behavior and jeopardize the interests of their companies.The bottom line you may think its obvious that your boss is terrible, but he or she has no idea thats the case.How to handle a schwimmbad bossThere are some good ways to handle bad bosses, whatever their failings. Daily Worth has a nice roundup.Heres some advice we like, too.Dont handle a really bad boss at all. If your boss is bad enough - abusive, disrespectful, disparaging - then get a transfer or a new job. The more time you spend in an abusive work situation, the more likely you will burn out and hurt your career progression for years. Abusive bosses are bad for your physical health.Learn how to manage up. Its rare to have a perfect boss, so everyone needs strategies for managing bosses. We like this grouping of advice, which includes everything from talking it out to learning how to rise above the drama.Try to figure out whether the terrible behavior is temporary or a personality feature. Bosses are humans too and go through rough times. If you feel your boss isnt being effective, try to figure out whether its a brief blip that will pass or something that seems more permanent. If its the latter, its worth flagging it to th e boss himself.Learn how to get information in a non-confrontational way. No one likes hearing that theyre screwing up. Instead of freaking out and demanding answers, or lobbing accusations, think more diplomatically. There may be factors you dont know in your bosss decisions. Questions are effective ways to present ideas while getting more information and context I saw the latest initiative and I have a question about it. Do you have five minutes to clarify the impact on future operations?Collect lessons for the future. Many excellent managers became that way by learning what not to do from their own bad bosses. Observe what is ineffective about the leaders around you and think about how you can improve on that style in the future.