In simple terms, a direct report is an employee who is managed by and reports to someone else immediately up the chain of command in the organizational structure. Thus, you can use the silly phrase "the direct report reports directly" to define the term. Direct reports not only answer to a manager or supervisor, but can occupy various positions of authority themselves as well, depending on the organizational structure of the business or agency.
TL;DR (Too Long; Didn't Read)
An employee who reports to someone else is a direct report. They might also have employees who report to them, who will be their direct reports.
Many companies assign lines of authority and responsibilities in a ranked arrangement of job positions. For example, a simple hierarchy for a small retail business could consist of the owner, general manager, and sales associates. In this structure, the sales associates are the general manager's direct reports, while the general manager reports to the owner.
Larger companies, especially conglomerates and multinational corporations, have multiple tiers in the organizational structure, often with several department heads on the same level managing separate groups of direct reports. It is not uncommon for the top executives all to carry the title of vice president, such as vice president of operations, vice president of sales and vice president of finance. Even though the vice presidents often have several direct reports, employees directly subordinate to them, they too are considered direct reports of the president or CEO.
Tips on Managing Direct Reports
Effectively managing direct reports requires each person on the team to know his or her role and responsibilities in meeting the overall objectives of the company. To accomplish this, open and direct communication is a necessity, as is making sure each employee feel valued.
Know Your Staff
The University of California, San Francisco Human Resources Department recommends four essential actions to let your direct reports know you value them. First, get to know each direct report -- what leisure activities each enjoy, any workplace concerns, and what each expects from you as a manager. Second, adopt a management style that suits their needs as a contributor on your team. Third, welcome employee contributions and engage your direct reports in decision making that affects their role. Finally, give them the tools they need to be successful in their individual roles and as team members.
Recognize Good Work
As Kristi Hedges writes in a 2011 Forbes article, "Five Things to Never Say to Your Direct Reports," it's important that direct reports are recognized for quality work. In addition, Hedges -- a leadership development consultant, business owner and executive coach -- says you never should compare an employee you supervise with yourself in a prior role. Instead, allow the employee to do his or her job without jumping in to show you can do it better.
Managing Direct Reports Remotely
Rebecca Knight, a Wesleyan University lecturer and freelance journalist, interviewed experts to get their take on managing direct reports remotely. Knight described the consensus in her 2015 Harvard Business Review article, "How to Manage Remote Direct Reports" as managers should provide clear details to direct reports as to what is expected of him, and how often and via what means he should communicate with the manager. Visit the direct reports regularly and get to know each employee's working environment.