The Value of Bosses
How and by how much do supervisors enhance worker productivity? Using a company-based data set on the productivity of technology-based services workers, supervisor effects are estimated and found to be large. Replacing a boss who is in the lower 10% of boss quality with one who is in the upper 10% of boss quality increases a team's total output by more than would adding one worker to a nine member team. Workers assigned to better bosses are less likely to leave the firm. A separate normalization implies that the average boss is about 1.75 times as productive as the average worker.
We greatly appreciate the comments of seminar participants at the University of Chicago, Columbia, Yale, Stanford, Harvard, MIT, USC, Northwestern, the AEA meetings, the Society of Labor Economics, the IZA Economics of Leadership Conference, the Utah Winter Business Economics Conference, NBER Personnel Economics and NBER Organizational Economics meetings. We thank our discussants John Abowd, Mitch Hoffman, Casey Ichniowski, and Robert Miller for their thoughtful suggestions. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
- Replacing a bad boss with a good one increases productivity of each subordinate's output by more than 10 percent. One extreme view...
Edward P. Lazear & Kathryn L. Shaw & Christopher T. Stanton, 2015. "The Value of Bosses," Journal of Labor Economics, vol 33(4), pages 823-861.