How do managers matter?
Updated: Jul 12, 2019
The relationship between managers and employees is fundamental to the operation of firms. What is it that managers do? How much do managers matter?
The authors, Hoffman and Tadelis, measure "manager quality" and "manager characteristics" using employees' survey responses about their manager, and then see to what extent these responses correlate with employee outcomes at the firm.
They find that different manager characteristics matter for different worker outcomes, but one fairly important one seems to be managers setting clear expectations. While managers with better scores appear to improve employee outcomes, such managers appear to reap little reward either in compensation or promotion rates.
Reference: Hoffman, M., & Tadelis, S. (2017). How do managers matter? evidence from performance metrics and employee surveys in a firm. mimeo, University of Toronto.