Harvard Business School‘s blog published a press release about a recent paper co-written by HBS Assistant Professor Christopher Stanton, along with Stanford Graduate School of Business professors Kathryn Shaw and Edward Lazear that examines the effects of better bosses on employees.
The paper, entitled The Value of Bosses, was recently published in the Journal of Labor Economics. Its findings will greatly assist “academics and practitioners alike…[in] constructing the best teams to get the most productivity out of people working together,” according to the press release.
Stanton says it’s often tricky to distinguish between a supervisor’s performance and those of the individual employees being overseen. Stanton and his cohorts worked with a technology-based services company to track transaction times (e.g. “the amount of time it takes for a call center employee to troubleshoot a customer’s problem”) at an anonymous organization. The team subsequently reviewed the data it accumulated over a certain period and the results offered compelling insights.
The data pointed to the “huge effect” that replacing a lackluster supervisor with a more capable boss had on a company’s efficacy—exponentially more than “substituting one worker for another.” Stanton compared the result to “adding another worker to a nine-person team.”
This appears to be the case because better bosses seem to be able to “get more out of each individual worker…up and down the chain of command—not just upper managers or C-level executives.” He adds, “These results suggest the most important peer is your supervisor.”
That said, Stanton cautions about “congestion effects” that could result from ousting underperforming bosses in favor of more qualified candidates who are tasked with supervising more people. Instead, he recommends “longer trial periods to measure performance.” Stanton adds, “You need to have provisional steps in place that allow you to determine whether the person will be a good boss or not.”