Direct Reports: What Are They and Why Are They Important?

What Is a Direct Report?

A direct report is an employee who works directly below a leader within the company who is above them in the organizational hierarchy. Direct reports are given goals, assignments, and responsibilities from that leader. It’s common for supervisors within an organization to have multiple direct reports. 

Who Has Direct Reports?

While direct reports do work under another individual, this does not indicate that they don't hold a high position at the organization. Everyone at the organization besides the CEO or company president is a direct report to someone else at the company. Even the CEO himself may report to investors. 

The following are some positions that have direct reports: team leaders, managers, supervisors, department heads, directors, vice presidents, company president, and the CEO. 

Difference Between Direct and Indirect Reports 

So as we have gone over, a direct report reports directly to a leader in the organization. Therefore, leaders are responsible for giving them assignments, monitoring their performance, and providing them with regular, consistent feedback. 

To properly portray the relationship between indirect reports and direct reports, take a look at this chart: 

The CEO has a number of direct reports. Anyone who does not report directly to the CEO is considered his or her indirect report.  While this particular example uses the CEO, the same structure goes for all leaders who have people working underneath them in the hierarchy. 

Why Are Direct Reports Important? 

The purpose of a direct reports system is to create an effective process delegating tasks, monitoring performance, and reaching goals. Let’s discuss each of these benefits a little more in depth.

Task Delegation: It can be difficult for some leaders to properly delegate tasks. Without direct reports, managers or supervisors may be acquiring far too much work to handle alone. Direct reports can take on some of the department’s responsibilities and give the leader more time to focus on larger organizational goals. 

Monitoring Performance: When tasks are delegated to direct reports, it becomes far easier to monitor how each employee is doing on each task, whereas if a direct report system were not in place, there wouldn’t be consistent feedback check-ins to monitor the results and make improvements as needed. 

To best monitor performance, leaders should have regular 1:1 meetings with their direct reports. These meetings provide an effective feedback process and a consistent platform for direct reports to communicate with their supervisor. To easily track a direct report’s progress over long periods of time, these meeting recaps can be documented and stored in a performance management feature. 

Reaching Goals: A direct report system creates more organization among talent within the company and it provides clear structure to each department. Structure and organization reduce unnecessary hindrances, which lead to more efficiency. More efficiency makes it easier for a company to hit its goals.