Do bosses matter?
Managers don’t rise through the ranks if they lack conviction and a sense of importance, but even the best ask themselves that question at some point.
Turns out managers matter a whole lot, at least according to a study of a large technology firm whose operations, closely monitored by a computer, provided ready measures of productivity. The study, entitled “The Value of Bosses,” was published in August by the Natural Bureau of Economic Research (nber.org).
Daily productivity was measured for 23,878 workers matched to 1,940 bosses over five years. The types of jobs weren’t only defined as “technology-based service jobs.” It stated that jobs like those studied included call center workers.
The primary findings:
Bosses vary greatly in productivity. Going from a boss in the bottom 10 percent of quality to one in the top 10 percent improved productivity among the supervised employees by as much as adding another worker to a nine-member team. More surprising, the boss made his or her biggest impact by teaching more productive skills followed by motivating workers.
Bosses increase output. The average boss adds about 1.75 times as much output as the average worker. Put another way, the average boss produces about 18 transactions per hour in enhanced productivity of that boss’s subordinates. Were no bosses present, the typical team of nine workers would handle 18 fewer transactions per hour on a mean of about 100 transactions. Substitute the words “cold calls” for “transactions” in that statement and the impact of a strong sales manager becomes evident.
The boss’s primary job is teaching skills that persist. It might involve skill transfer or providing the worker with a good work ethic and good work habits. As long as it is persistent, the study states, it is fair to consider what was taught to a worker a skill. (Motivation is defined as that which affects performance today, but does not last.)
The worst bosses are unlikely to be retained. Over a one-year period, bosses in the lowest 10 percent of the quality distribution are 67 percent more likely to leave the firm than bosses in the top 90 percent of the distribution.
Workers and bosses should be matched according to performance. The effect of good bosses on high-quality workers is greater than the effect of good bosses on lower-quality workers, but the effect of sorting is not large.
A copy of the full report is available for $5 from the National Bureau of Economic Research at nber.org/papers/w18317.
