Wait, kindness drives profits? The management competency no-one’s talking about
Kind management fosters trust and psychological safety for better engagement and productivity, write UNSW Business School's Kelsey Burton and Gabi Nudelman
In an era of AI, automation, and data-driven decision-making, businesses have more tools than ever to optimise performance. Yet despite these advances, workplaces are facing a culture crisis where 80% of Australian employees feel overwhelmed, 41% of Gen Z workers are seeking better conditions, and 52% are considering leaving as they feel no sense of community.
If technology were enough, wouldn’t we have solved these problems by now? The truth is, the missing link in modern leadership isn’t more automation – it’s a management approach that balances performance with humanity.
Kind management is an approach that balances both. It is not about being nice or soft; instead, it fosters a human-centred approach where people feel safe, leading to better performance. High-trust workplaces have 50% higher productivity, 76% more engagement, 74% less stress, 40% less burnout, and 106% more energy, according to Harvard Business School. Research also indicates that investing in health and wellbeing could generate up to $11.7 trillion in global economic value.
Forward-thinking companies are already embracing this approach. Atlassian combats burnout with "recharge days" to promote mental health, Hilton builds loyalty through wellbeing programs, and Unilever’s people-first approach to leadership helped it navigate the COVID-19 crisis while strengthening its brand reputation.
The best leaders understand that kindness isn’t a distraction from performance, it’s the foundation of it. Here, we explore why kind management is a strategic advantage and how businesses can implement it to drive innovation, resilience, and long-term success.
What is kind management?
Kind management is an approach that balances high-performance expectations with human-centred leadership. It’s not about avoiding conflict or lowering standards. It’s about leading with empathy, integrity, accountability and creating workplaces where employees feel valued, motivated, and psychologically safe.
This approach recognises that employees aren’t just resources to be optimised. Rather, they are individuals with aspirations, challenges, and emotions. Kind managers understand that when employees feel respected and supported, they are more engaged, innovative, and committed to organisational success.
Crucially, kind management empowers employees by fostering trust, transparency, and psychological safety without sacrificing accountability or excellence.
Kindness ≠ niceness: an important distinction
A common misconception is that this approach is simply about being nice. However, niceness often leads to conflict avoidance, prioritising likability, and sacrificing necessary honesty to maintain harmony. In contrast, kindness is rooted in genuine respect, sometimes requiring difficult conversations, boundary-setting, and upholding high standards.
Read more: How team emotion rules impact staff turnover in healthcare
Kind managers ensure employees know where they stand, what’s expected, and how they can grow. As leadership expert Brené Brown puts it, "Clear is kind. Unclear is unkind." Avoiding tough conversations in the name of "niceness" doesn’t spare feelings. Instead, it fosters confusion, resentment, and stagnation. Kind leaders deliver feedback that promotes growth, not blame, and make difficult decisions while ensuring employees feel supported through transitions.
Benefits of kind management
Unlike costly leadership or cultural change programs, kind management delivers an ROI that’s hard to ignore. Organisations that prioritise kindness as a core competency see significant improvements across multiple metrics:
Enhanced productivity and innovation. Psychological safety is a catalyst for innovation. Harvard Business School Professor Amy Edmondson emphasises that employees who feel secure take smart risks, speak up about challenges, and collaborate more effectively. A prime example is Google’s "20% time" policy, which encourages employees to explore new ideas and passion projects and has led to innovations like Gmail and Google News.
Improved talent attraction and retention. Organisational culture is a key differentiator in competitive job markets. Employees want to feel valued as individuals, not as moneymakers. Patagonia exemplifies this by offering flexible work arrangements and encouraging participation in environmental activism, aligning work with personal values. This commitment has made Patagonia one of the most sought-after workplaces.
Greater resilience during challenges. Organisations that prioritise people over pure efficiency navigate crises more effectively. During COVID-19, Unilever maintained employee salaries and committed €100 million to hygiene and food products, reinforcing internal stability and external social impact. By investing in employee wellbeing, Unilever strengthened loyalty, sustained operations through uncertainty, and mitigated burnout-related costs.
Reduced costs related to burnout and turnover. Burnout and turnover cost businesses millions annually in absenteeism, lost productivity, and recruitment expenses. To combat this, Atlassian integrates "recharge days" into its kind management approach, providing paid time off for employees to reset, mental health resources and flexible work arrangements.
Stronger consumer relationships
A company’s internal culture directly influences its external relationships. Research consistently links employee satisfaction to customer loyalty, proving that engaged employees drive stronger business outcomes. Zappos exemplifies this by investing heavily in employee happiness, autonomy, and customer-focused training. By fostering a service culture built on trust and empowerment, Zappos delivers exceptional customer satisfaction and high retention rates, proving that happy employees create happy customers.
In a world obsessed with efficiency, the smartest leadership investment is one that builds trust and delivers results. By prioritising kindness, businesses don’t just support employees - they drive long-term success.
Kind management in the AI age
As AI takes over, the role of managers must evolve: 64% of Australian employees believe AI will change the critical skills needed for work, leading to concerns about job security, fairness, and loss of human connection. Kind managers can alleviate this by providing reassurance, upskilling opportunities, and clear communication about ethical and transparent AI decision-making.
Read more: How compassionate leaders improve business performance
While AI adoption can increase productivity by up to 245 hours annually, it could impact work-life balance and risk dehumanisation if not implemented thoughtfully. Kind managers should help employees work smarter, not just harder, as the future of leadership isn’t about choosing between AI and human connection - it’s about ensuring AI supports people, not replaces them.
The future of leadership isn’t AI versus people. It’s AI with people, guided by managers who lead with empathy and integrity.
How to practice kind management
Transforming your leadership approach requires intentional action. Implementing kind management involves several key practices:
1. Start with self-awareness: Understanding your leadership style and its impact is foundational. Regular feedback and reflection are essential. Ask trusted colleagues for feedback and be willing to learn and adapt.
2. Practice active listening: Genuine listening fosters trust and understanding. Listen to understand and ask thoughtful questions to show genuine interest. Resist the urge to solve problems immediately.
3. Build psychological safety: Foster a culture where ideation, disagreements, and mistakes are encouraged, not reprimanded. Model this and openly discuss your own mistakes. Treat failed experiments as learning opportunities.
4. Communicate with transparency: Explaining the reasoning behind decisions and being honest about organisational challenges builds trust. Address and explain confidential information rather than simply dismissing it. This builds trust and demonstrates respect for your team's intelligence.
5. Set clear boundaries. Defining expectations supports a healthy work environment. Clearly communicate acceptable behaviours and performance standards, explaining the rationale behind them. Tackle boundary crossings respectfully and without delay.
6. Recognise and celebrate kindness: Celebrating kindness signals its value at work. Highlight acts of kindness and team members who exemplify support, collaboration, and empathy.
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Leadership isn’t about control. It’s about creating an environment where people thrive. By embedding kindness into leadership, organisations cultivate a culture where employees feel valued, inspired, and driven to succeed.
The world of work is changing faster than ever, and leadership must change with it. The future of leadership isn’t about authority - it’s about trust. Kind management isn’t just ethical. It’s effective, as people perform better when they feel valued and empowered.
Kind management represents a fundamental shift in how organisations drive performance, engagement, and excellence. Organisations that will thrive in the changing world of business are those that understand that treating people well is not an expense but an investment, as research shows that businesses with high-trust cultures consistently outperform their competitors in innovation, retention, and profitability.
The question isn’t whether businesses can afford to prioritise kindness. The real question is, can they afford not to?
Dr Kelsey Burton is a Lecturer in the School of Management and Governance and has more than ten years of experience in leadership consulting and coaching in the United States and Australia. Dr Gabi Nudelman is a Senior Lecturer in Business Communication in the School of Management and Governance, and she previously worked at the University of Cape Town, teaching business and academic communication across the Faculties of Engineering and the Built Environment, Commerce and the Graduate School of Business.