Bad managers are influential in all the wrong ways. Instead of inspiring exceptional performance, bad managers demoralize employees through abusiveness, favoritism and fiercely competing to expand their own power and influence at any cost. Such behaviors create a negative ripple effect through organizations, which struggle to develop and retain the best performers. Failure to address these issues results in lost productivity, as current employees tune out the manager and start searching for better jobs elsewhere.

Constant Turnover

Constant turnover is a common sign of a toxic workplace. When employees quit their jobs, a bad manager's presence is typically the key reason, Forbes states. However, bad managers show little or no comprehension of this principle. Instead of nurturing talent, ineffective supervisors may pit employees against each other to consolidate their own power. As word gets around, topflight applicants learn to steer clear, which only compounds the company's ability to attract and retain them.

Declining Morale

Employees who don't respect or trust managers are unlikely to do their best every day. Three out of four employees identify bosses as the most stressful part of their job, Inc. magazine states. According to a survey of 30,000 managers cited by the magazine, failure to inspire is the biggest leadership flaw, followed by acceptance of mediocrity and a lack of clear direction. Managers who ignore these sentiments stand little chance of becoming effective leaders.

Empire Building

"Empire building" refers to managers' attempts to retain or expand their authority over others, regardless of whether it's the organization's best interests. Instead of helping a business achieve its goals or compete for its share of the market, bad managers focus on building power and self-sufficiency at other departments' expense. The end result is confusion, conflict and diversion of corporate resources, which often comes at an enormous cost to the organization.

Favoritism in Promotions

Favoritism in deciding who gets ahead is a common complaint raised by employees who work under bad managers. Fifty-six percent of bosses know whom they want to promote before the review process starts, according to a survey of 330 managers by Georgetown University. These predetermined favorites wound up getting promoted about 96 percent of the time, the survey showed. Such practices cause employees to feel demoralized, unappreciated and more likely to take their talents elsewhere – which hurts the organization.

Lower Productivity

Bad managers have a markedly negative effect on productivity. According to Inc. magazine, the average cost of recruiting and replacing a minimum wage employee is about $3,500. According to the magazine, 29 percent of employees with abusive bosses take sick days off when they're not ill, versus 9 percent with non-abusive bosses. Twenty-five percent take longer or more frequent breaks, versus 5 percent who didn't. Companies that ignore these trends become less likely to survive, let alone grow.