People Management Skills, Employee Attrition and Manager Rewards: An Empirical Analysis

Mitchell Hoffman and Steven Tadelis

NBER Working Paper No. 24360

2018

How much do a manager’s interpersonal skills with subordinates, what we call people management skills, affect employee outcomes? Are managers rewarded for having such skills? Using personnel data and surveys of employees about their managers at a large, high-tech firm, we show that survey-measured people management skills have a strong negative relation to employee turnover. A causal interpretation is reinforced by research designs exploiting new workers joining the firm and manager moves. However, people management skills do not consistently improve non-attrition outcomes. Better people managers are themselves more likely to receive higher subjective performance ratings and to be promoted.

Econometric and Statistical Methods and Methodology: General, Bayesian Analysis: General, Hypothesis Testing: General, Estimation: General, Semiparametric and Nonparametric Methods: General, Statistical Simulation Methods: General, Methodological Issues: General, Econometric and Statistical Methods: Other, Single Equation Models, Single Variables: General, Single Equation Models, Single Variables: Cross-Sectional Models, Spatial Models, Treatment Effect Models, Quantile Regressions, Single Equation Models, Single Variables: Time-Series Models, Dynamic Quantile Regressions, Dynamic Treatment Effect Models, Diffusion Processes, Single Equation Models, Single Variables: Panel Data Models, Spatio-temporal Models, Single Equation Models, Single Variables: Truncated and Censored Models, Switching Regression Models, Threshold Regression Models, Single Equation Models, Single Variables: Discrete Regression and Qualitative Choice Models, Discrete Regressors, Proportions, Probabilities, Single Equation Models: Single Variables: Instrumental Variables (IV) Estimation, Organizational Behavior, Transaction Costs, Property Rights, Human Capital, Skills, Occupational Choice, Labor Productivity, Organization of Production, Personnel Economics: Training, Socialist Systems and Transitional Economies: Prices, Socialist Systems and Transitional Economies: National Income, Product, and Expenditure, Money, Inflation

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