While complaining about bosses is almost a national pastime, new research suggests that good bosses stick around and make their workers more productive, while the worst managers don’t last very long in the workplace.
“The Value of Bosses,” a paper co-authored by Christopher Stanton, an assistant Finance professor at the David Eccles School of Business, was recently conditionally accepted for publication in an upcoming issue of the Journal of Labor Economics.
Stanton and his co-authors from Stanford University, Edward Lazear and Kathryn Shaw, wanted to determine how much supervisors enhanced worker productivity in the workplace. They were able to gather data on the productivity of more than 23,000 workers supervised by nearly 2,000 managers over the course of five years doing technology-based service jobs. Examples of the type of workers studied include retail sales clerks, movie theater concession employees, in-house IT specialists, airline gate agents, call center workers and other jobs where employees are logged into a computer through their shifts.
The results? Replacing a bad boss with a strong one can increase a team’s output by the equivalent of adding a whole worker to a nine-person team. Workers assigned to better bosses also tend to stick around a firm longer, helping the company avoid recruitment and training costs. A separate finding in the study indicated an average boss is worth about 1.75 times as much as an average worker—indicating that most people who find themselves in a supervisory role were promoted with good reason.
“One of the main findings, that I think is a little bit surprising, is that we ended up detecting that there were idiosyncratic effects,” Stanton said. For example, sometimes Worker A worked better with Boss A than Boss B, but Worker B might work better with Boss B than Boss A, “so there is maybe some sort of personality component.
“The most surprising finding, though, is that the company wasn’t really doing much to figure out which worker was a good match with each boss, so work assignments weren’t really systematic. From a company’s perspective, they might want to address those idiosyncratic effects.”
Stanton and Co.’s paper got plenty of media attention well before it was even accepted for publication. When it was still a working paper at the National Bureau of Economic Research, the likes of The Atlantic, Huffington Post and the Freakonomics website all jumped on it to do stories.
One area that the media focused on in those early reports was the role of attrition in the research, Stanton said.
“Bad bosses were not likely to stick around,” he noted. “If you were stuck working for someone who was a horribly incompetent manager, it’s unlikely that one of you were going to be at the firm in the future. Maybe both of you would be gone, because the incompetent manager drives workers away, and is also likely to leave himself.”
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