Your boss doesn't seem to know what's REALLY going on in the workplace. He can't tell the good workers from the bad ones. She doesn't realize that often SHE is the problem. In short, your boss seems completely clueless. Why is this?
When it's the boss's fault:
1. Isolation and Inattention. Sometimes supervisors prefer to stay behind closed doors focusing on their own work instead of actually supervising. And when they finally DO emerge from their lairs, they don't really notice what's going on. They ask, "how is it going?" but don't care to hear (or notice) that something is wrong.
SOLUTION: Management by walking around. Bosses need to monitor what's going on in the workplace - to ask the tough questions, and listen carefully to the answers (and pay attention to nonverbal cues that suggest that things are not really "fine").
2. Poor Performance Management. Your boss may not be able to distinguish the good workers from the bad ones because he or she does not measure or pay attention to performance data. Performance reviews are either rarely done, are biased, or not taken seriously.
SOLUTION: Develop and use a good performance management system. Bosses need to have good measures of performance in place, assess each employee's performance and overall contribution, reward the good performers, and put the poor ones on notice.
3. Incompetence: Plain and Simple. Psychologist Robert Hogan suggests that the majority of managers and even top-level leaders are incompetent (and that most eventually lose their jobs due to it). Sometimes it's lack of ability, sometimes it's because the boss is a "bad guy." Nepotism, cronyism, narcissism means that the wrong people are often put in charge.
SOLUTION: Organizations need to pay more attention to who they hire and promote for supervisory positions at all levels. Managing others is a huge responsibility and should only be awarded to those who deserve it and who have earned the right.
When it's NOT the boss's fault:
4. Toxic Work Environment. Sometimes the system is the problem, not the boss. Your supervisor tries to do the right thing, but the system doesn't reward good performance (neither your boss's nor yours), and it encourages mediocrity, and bad behavior.
SOLUTION: Get out if you can. Once a toxic environment takes hold, it is very difficult to change. Your best course is to explore better options.
Supervising and leading others in the workplace is an awesome responsibility -- one that needs to be taken seriously. There are best practices in managing and leading others, and these need to be followed. Organizations need to carefully select and develop leaders, and ensure that these leaders, and the work systems, support and encourage good performance and a positive organizational climate.