This equation is never going to change.
Companies avoid getting rid of bad managers for any number of reasons – he’s a brilliant mind, she’s been with the company since the outset, he has the best sales record in the organization; the financial package to get rid of her would be too much.
A company’s decision to not get rid of that bad manager, however, is also a decision to get rid of any number of valuable employees reporting to him or her over time. These good workers, managers, and possible future leaders of the organization will then be gone before they can even reach their potential within the company.
No amount of bonuses, perks, or external motivators can compensate for the negative impact of a bad boss over the long-term. Employees will stay, either until they can’t take it anymore, or until something better comes along, leaving companies to rehire and retrain a continual stream of new employees who, in turn, are left to deal with the same bad manager until they decide to move on as well.
Read more on this topic in this article from Inc.com: