Human capital comprising of the employees of a concern is one of the most valuable resources of a business. Though it is an intangible resource, employees are extremely important and critical in the running of any business. Employees at different hierarchical levels of the concern perform different functions and have different rights and responsibilities.

This article looks at meaning of and differences between two types of employees based on their responsibilities in the organisation -managerial and non-managerial employees.

Definitions and meanings

Managerial employees

Managerial employees are those employees of the organization who by virtue of their employment are entrusted with managerial functions in the organization. Managerial functions are those that involve planning, policy making, strategizing, leading and controlling.

Managerial employees can be found across hierarchical levels

1. Top level managers

These include employees who are entrusted with the overall policy framing and decision making of the organization as a whole. Top level managers may also be found to be on the board of directors of a company. Examples of top level managers include chief executive officer (CEO), chief financial officer (CFO) etc.

2. Mid-level managers

Mid-level managerial employees oversee the specific departmental functions of the organization. They also oversee lower level managers and serve as a link between top level and lower level management. Examples of mid-level managers include project managers, operations managers, finance managers etc.

3. Lower level managers

Low level managerial employees primarily have supervisory function who oversee functioning of smaller specific areas. They report to mid-level managers and are responsible for smooth functioning of day to day operations. Examples of lower level managers include, foremen, supervisors, section leads, line managers on the production floor etc.

Essentially managerial employees oversee the working of a group of employees or a specific group of functions of the organization.

Non managerial employees:

Non-managerial employees are employees who are in-charge of executionary functions of an organization. Non-managerial employees are entrusted with specific functions depending on the department within which they are employed. These employees have limited or no managerial role in their job description.

Examples of non-managerial employees

  • In the finance and accounts department: Accountants, cashiers, tellers.
  • In the administrative department: Secretarial staff, administrative staff etc.
  • In the production department: Shop floor employees, engineers and other executionary staff who do not have a management role.

Non-managerial employees are guided by managerial employees and are expected to perform the functions as per their job description. These employees are appraised for their performance by managerial employees within their department.

Difference between managerial and non-managerial employees:

The key points of difference between managerial and non-managerial employees have been detailed below:

1. Meaning

  • Managerial employees are employees who are responsible for undertaking management functions in the organization such as planning, policy making, supervision, leadership etc.
  • Non-managerial employees are employees who do not have any management role but are responsible for executing or carrying out individual jobs or functions for the organization.

2. Responsibilities

  • Managerial employees have broader responsibilities as they are in-charge of steering the overall running of the business activities. Determining objectives, framing policies, overseeing functioning in line with policies, coordinating and supervising employees are some of their important responsibilities.
  • Non-managerial employees have a more limited range of responsibilities as they are responsible for executing functions or jobs as guided by managerial employees.

3. Decision making rights

  • Managerial employees, depending on their hierarchical level have a wide range of decision-making powers. Right from business goals to funding models to vendor selection and employee hiring, managerial employees take decisions on several aspects.
  • Non-managerial employees have very limited or no decision-making rights. They have to be guided by their senior managerial employees.

4. Overseeing function

  • Managerial employees are responsible for overseeing a group of employees to ensure their efficient functioning. They are thus responsible for not only their work but also for how their reporting team performs.
  • Non-managerial employees are only responsible for their own work and have no overseeing function.

5. Pay scale

  • As managerial employees have a more critical role, they draw higher pay packages as compared to the non-managerial employees within their department.
  • Non-managerial employees draw comparatively lower pay package than the managerial employees leading them.

6. Educational requirement

  • Managerial employees especially those at top and mid-level management require expert level skill set and are thus required to have higher educational qualification such as a management degree or other relevant professional degrees.
  • Non-managerial employees can have a lesser educational qualification limited to their job requirement as compared to the managerial employees within their department.

7. Appraisal

  • Performance of managerial employees are generally appraised by other managerial employees who are at a higher level in the management hierarchy. For example – performance appraisal of departmental heads is done by the CEO or CFO.
  • Performance of non-managerial employees are appraised by the managerial employees who they report to. For example – performance appraisal of accountants is generally done by finance department managers.

8. Examples

  • Examples of managerial employees include CEO, CFO, COO in top level, departmental heads in mid-level and supervisory and line managers in lower level.
  • Examples of non-managerial employees include accountants, software developers, administrative staff, other department associates, factory workers etc.

Conclusion – managerial vs non-managerial employees

While managerial employees have greater rights and responsibilities in an organization, the contribution and importance of non-managerial employees cannot be undermined. Non-managerial employees are the lifeline of any organization as they are the executors for the business. Whereas managerial employees are responsible for keeping a check on non-managerial employees to ensure they execute as per the organizational goals. Both managerial and non-managerial employees thus complement each other and one without the other can severely hamper the function of the organization.