The AI paradox: Why better technology demands better people managers

Artificial intelligence is making information and expertise more accessible. It is not making people-management easier.

As organisations pursue greater agility, faster execution and continuous adaptation, managers are expected to deliver results while also supporting employee growth, engagement, well-being and retention. This is creating a new pressure point in the workplace: technology may be increasing what organisations can achieve, but the human capacity required to sustain that performance appears to be under strain.

This tension is at the centre of The State of Managers 2026, published by Great Manager Institute®. Drawing on three years of collated data covering 24,315 managers and feedback from 132,932 team members, the report offers a closer look at how people-leadership is being experienced in the changing workplace.


Managers may be approaching a pressure threshold
The report’s most significant finding is a sharp decline in the People Manager Effectiveness Index - from 83 in FY 2024-25 to 79 in FY 2025-26.

The decline is not limited to one aspect of management. Scores fell across all three dimensions of Great Manager Institute®’s Connect, Develop and Inspire© framework. This suggests that managers are finding it harder to build relationships, enable employee growth and sustain team motivation simultaneously.

The insight for organisations is important. The challenge may not be that managers have become less capable. It may be that the role has become too demanding to perform effectively without deliberate organisational support.

Managers are being asked to move faster, manage change, adopt new technology, coordinate across functions and deliver increasingly ambitious outcomes. The behaviours most likely to suffer under this pressure are often the least visible on a performance dashboard - listening, guiding, involving employees and creating psychological security.

Managers remain approachable, but employees feel less heard
One of the report’s most revealing findings is the contrast within the Connect dimension.

Managers continued to receive strong scores for being approachable and respectful. Yet listening and information sharing both declined by six points compared with the previous year.

This distinction matters.

Being available to employees is not the same as making them feel heard. Similarly, communicating frequently does not necessarily mean that employees are receiving the context they need.

In a technology-enabled workplace, information may be widely available, but clarity can still be scarce. Employees need managers who can interpret what is changing, explain why it matters and connect organisational decisions to the realities of their teams.

The emerging managerial challenge is therefore not simply accessibility. It is the quality of attention and context a manager provides.

Burnout is also a manager issue
The report found that team burnout in Indian workplaces increased by 12% over the previous year.

However, burnout levels differed significantly depending on the type of manager leading the team. Teams under Great People Managers™ reported burnout of 12%, compared to 27% among teams led by Aspiring Managers, more than double.

The lowest burnout was experienced by teams whose managers demonstrated both competence and care.

This challenges the idea that burnout is only a consequence of workload or an employee’s ability to manage stress. The experience of work is also shaped by how a manager sets expectations, distributes pressure, provides support and responds when employees struggle.

Competence without care may drive execution but leave employees unsupported. Care without competence may create warmth without sufficient direction. The strongest managers appear to combine both.

For organisations, this means that employee well-being cannot be addressed only through wellness programmes. The everyday behaviour of managers must also be part of the solution.

The most important managerial risks may be invisible
The report also identifies significant differences between how managers assess themselves and how their teams experience them.

Managers rated themselves 12 points higher than their teams on care for individuals. Gaps of 10 points emerged across psychological security, development focus, seeking suggestions, and fair treatment.

These are not minor behavioural differences. They are central to whether employees feel included, supported and able to grow.

The findings suggest that many managers may genuinely believe they are demonstrating people-centric leadership, while their teams experience something different. This is why managerial effectiveness cannot be understood through self-assessment or business performance alone.

Intent does not always translate into experience.

Organisations therefore need credible team feedback to identify where manager perceptions and employee experiences diverge. Without such measurement, development programmes risk addressing generic competencies while overlooking the specific behaviours affecting each team.

The role of a manager is becoming more human, not less
As artificial intelligence takes on more informational, analytical and administrative work, the value of a manager will increasingly come from what technology cannot easily replicate.

Managers may no longer need to be the sole source of expertise. They will, however, need to help employees navigate ambiguity, make sense of competing priorities, grow through change and remain connected to a larger purpose.

The future of management will not be defined by having every answer. It will be defined by the ability to:

• Create clarity without complete certainty
• Combine performance expectations with genuine care
• Build trust across physical and digital workplaces
• Recognise contribution meaningfully
• Help people grow while work continues to change

This is the central paradox of the AI era: the more capable technology becomes, the more distinctly human effective management must become.

Measuring and recognising Great People Managers™
Great Manager Institute® conducts the Great People Manager Study® to help organisations understand and measure these behaviours. Now in its seventh edition, it is recognised as India’s largest study on people management.

Its assessment framework captures team-member feedback across Connect, Develop and Inspire©. The multi-stage evaluation also incorporates people-practice submissions and mentor interviews.

A distinguishing feature is the proprietary Validity Score, which evaluates the mindfulness and reliability of participant responses. Visible to respondents in real time and reported at manager and organisational levels, it is designed to encourage thoughtful participation and strengthen confidence in the findings.

The study culminates in recognitions including India’s Top 100 Great People Managers™ and India’s Top 50 Great People Managers™ for CEOs, managing directors and founders. Its scope has also expanded with India’s Top 50 Women - Great Managers to Work With®, whose inaugural list is scheduled to be unveiled in September.

The institute additionally recognises organisations that build leaders through structured and scalable practices as Leadership Factories® of India. As of June 2026, 15 organisations across sectors including IT, BFSI, e-commerce, manufacturing and services hold this recognition.

“Great People Managers™ should not be left to chance. They must be identified, understood, developed, and celebrated,” says Prasenjit Bhattacharya, co-founder and CEO of Great Manager Institute®.

Having assessed more than 100,000 managers across industries, the institute has consistently observed that exceptional people leadership is not determined by authority or designation. It is reflected in a manager’s ability to help others succeed.

As organisations invest in artificial intelligence, they must make an equally deliberate investment in the people responsible for leading teams through that transformation.

Technology may change how work is completed. The quality of management will determine how people experience change and whether improved capability translates into sustainable performance.

Read the full report here.