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

Mitchell Hoffman and Steven Tadelis

Journal of Political Economy, 2021, vol. 129, issue 1, 243 - 285

Abstract: How much do a manager’s interpersonal skills with subordinates, which we call people management skills, affect employee outcomes? Are managers rewarded for having such skills? Using personnel data from 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 several research designs, including those exploiting new workers joining the firm and workers switching managers. However, people management skills do not consistently improve most observed nonattrition outcomes. Better people managers themselves receive higher subjective performance ratings, higher promotion rates, and larger salary increases.

Date: 2021
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Working Paper: People Management Skills, Employee Attrition, and Manager Rewards: An Empirical Analysis (2018)
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