How Do You Identify A Good Manager?

Ben Weidmann, Joseph Vecci, Farah Said (), Sonia Bhalotra, Achyuta Adhvaryu, Anant Nyshadham, Jorge Tamayo and David Deming
Additional contact information
Ben Weidmann: Harvard Kennedy School
Joseph Vecci: Department of Economics, University of Gothenburg
Achyuta Adhvaryu: University of California San Diego, NBER, J-PAL, BREAD, Good Business Lab
Anant Nyshadham: University of Michigan, NBER, J-PAL, BREAD, Good Business Lab
Jorge Tamayo: Harvard Business School and Digital Reskilling Lab

CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)

Abstract: We introduce and validate a novel approach to identifying good managers. In a pre-registered lab experiment, we causally identify managerial contributions by randomly assigning managers to teams and controlling for individual skill. We find that manager contributions are crucial for team success, and that people who self-select into management roles perform worse than randomly assigned managers. Managerial performance is strongly predicted by economic decision making skill, but not by demographic characteristics. Two validation studies support our experimental results. Participants who succeed in the lab receive more real-world promotions and, in a separate study of retail store managers, skill measures strongly predict store sales. A one standard deviation increase in manager quality increases annual per-store sales by $4.1 million USD (25% increase). Selecting managers on skills rather than demographic characteristics or the desire to lead could substantially improve organizational performance.

Keywords: Management; Teamwork; Skills; Measurement; Experiment JEL Classification: M54; J24; C90; C92 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-exp, nep-hrm, nep-inv and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:cge:wacage:715

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