We all know the old saying: People don’t quit bad jobs, they quit bad bosses. But how much is a good boss really worth?
A new working paper from the National Bureau of Economic Research attempts to quantify just that. The paper, written by Edward Lazear, Kathryn Shaw and Christopher Stanton, found that removing a poorly performing boss and replacing him or her with a top performing manager is roughly equal, in terms of productivity, to adding an extra person to the team. This implies, the researchers say, that the average boss is about 1.75 times as productive as the average worker.
That’s not all that surprising, of course. Everyone knows that a great boss can have a multiplying effect on the performance of his or her team. But it’s apparently a phenomenon that’s rarely been studied in a real environment. The researchers, based at the business schools at Stanford University and the University of Utah, write that “the literature has modeled the relationship between boss and worker at an abstract level and has not pushed beyond to examine what is likely to be the most important relationship in the workplace.”
They say past research has focused on CEOs (rather than front-line supervisors) and managers in highly specific fields, such as education, sports or law. “Although we take as given that managers matter, neither the mechanisms through which they affect productivity nor the actual size of the effects have been documented previously.”
The trio’s study looked at 23,878 actual workers, matched to 1,940 bosses, at a very large, service-oriented company between 2006 and 2010. While they do not specify the company or what the workers’ jobs actually were, they say they performed “technology-based services” that could be monitored by a computer for productivity, such as retail sales clerks, in-house IT specialists or call-center workers.
Several of their primary findings would not come as a surprise to anyone, such as the idea that boss quality varies greatly (duh). The study also found that top managers enhance their workers’ output by 1.3 units per hour more than those in the bottom tier.
But quantifying how much good bosses actually do affect performance—especially outside of an experimental setting—could help managers make smarter decisions. More people need to understand that they’re better off firing a poorly performing boss and replacing him or her with a better performing one, rather than adding more workers to their staffs. Once that happens, the productivity push should shift from getting more out of people on the front lines to first getting more out of the ones who lead them.
Another finding—that “the effect of good bosses on high-quality workers is greater than the effect of good bosses on lower quality workers”—should help leaders set priorities, too. All too often, the instinct is to try to “fix” the performance of a poorly performing worker by pairing them up with a great manager. But if that is done at the expense of pairing a good worker with a great manager, the report finds, everyone suffers.
Especially, as that old saying goes, if that high quality worker decides to quit.
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