On the Allocation and Impacts of Managerial Training

Achyuta Adhvaryu, Emir Murathanoglu and Anant Nyshadham

No 31335, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study the allocation and productivity consequences of training production line supervisors in soft skills via a randomized controlled trial. Consistent with standard practice for training investments within firms, we asked middle managers -- who sit above supervisors in the hierarchy -- to nominate members of their supervisory team for training. Program access was randomized within these recommendation rankings. Highly recommended supervisors experienced no productivity gains; in contrast, less-recommended supervisors' productivity increased 12% relative to controls. This was not due to poor information or favoritism. Instead, consistent with the fact that supervisor turnover comes at a large effort cost to middle managers due to gaps in coverage and onboarding, middle managers prioritized retention over productivity impacts. Indeed, treated supervisors were 15% less likely to quit than controls; this gain was most pronounced for highly recommended supervisors. Misallocation of training can help explain the persistence of low managerial quality in firms.

JEL-codes: J24 L23 M53 (search for similar items in EconPapers)
Date: 2023-06
New Economics Papers: this item is included in nep-exp, nep-hrm and nep-lma
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