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

43 Pages Posted: 28 Feb 2018 Last revised: 5 Mar 2021

See all articles by Mitchell Hoffman

Mitchell Hoffman

University of Toronto - Rotman School of Management; National Bureau of Economic Research (NBER)

Steven Tadelis

University of California, Berkeley - Haas School of Business; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

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Date Written: February 2018

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 research designs exploiting new workers joining the firm and manager moves. However, people management skills do not consistently improve most observed non-attrition outcomes. Better people managers themselves receive higher subjective performance ratings, higher promotion rates, and larger salary increases.

Suggested Citation

Hoffman, Mitchell and Tadelis, Steven, People Management Skills, Employee Attrition, and Manager Rewards: An Empirical Analysis (February 2018). NBER Working Paper No. w24360, Available at SSRN: https://ssrn.com/abstract=3131139

Mitchell Hoffman (Contact Author)

University of Toronto - Rotman School of Management ( email )

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Toronto, Ontario M5S 3E6 M5S1S4
Canada

National Bureau of Economic Research (NBER) ( email )

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Steven Tadelis

University of California, Berkeley - Haas School of Business ( email )

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Berkeley, CA 94720
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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