The Value of Bosses
Edward P. Lazear
Stanford Graduate School of Business; National Bureau of Economic Research (NBER); Institute for the Study of Labor (IZA)
Kathryn L. Shaw
Stanford Graduate School of Business; National Bureau of Economic Research (NBER)
NBER; London School of Economics; University of Utah - Department of Finance
June 13, 2014
How and by how much do supervisors enhance worker productivity? Using a company-based data set on the productivity of technology-based services workers, supervisor effects are estimated and found to be large. Replacing a boss who is in the lower 10% of boss quality with one who is in the upper 10% of boss quality increases a team’s total output by more than would adding one worker to a nine member team. Workers assigned to better bosses are less likely to leave the firm. A separate normalization implies that the average boss is about 1.75 times as productive as the average worker.
Number of Pages in PDF File: 44
Date posted: August 18, 2012 ; Last revised: June 14, 2014
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