How Do You Identify a Good Manager?

Ben Weidmann, Joseph Vecci, Farah Said, Sonia Bhalotra, Achyuta Adhvaryu, Anant Nyshadham, Jorge Tamayo and David Deming

No 2591, RFBerlin Discussion Paper Series from ROCKWOOL Foundation Berlin (RFBerlin)

Abstract: This paper introduces and validates a novel approach to measuring management skills. In a large pre-registered lab experiment we causally identify managerial contributions by randomly assigning managers to multiple teams and controlling for differences in individual skill. We find that manager contributions matter greatly for team success, and that people who want to be in charge perform worse than randomly assigned managers. Managerial performance is strongly predicted by economic decision-making skill, but not by demographic characteristics. LinkedIn data show that participants who succeed in the lab are substantially more likely to receive real-world promotions. We also measure the skills of store managers in a large retail firm and find that they predict store sales and other correlates of productivity, which aligns with our experimental results. 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 (search for similar items in EconPapers)
JEL-codes: C90 C92 J24 M54 (search for similar items in EconPapers)
Date: 2025-11
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Persistent link: https://EconPapers.repec.org/RePEc:crm:wpaper:2591

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