Working Paper: NBER ID: w24360
Authors: Mitchell Hoffman; Steven Tadelis
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.
Keywords: People management skills; Employee attrition; Manager rewards
JEL Codes: D23; J24; J33; L23; M50
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| People management skills (M54) | Employee attrition (J63) |
| People management skills (M54) | Subjective performance ratings (L25) |
| People management skills (M54) | Promotion rates (J62) |
| People management skills (M54) | Salary increases (J31) |
| People management skills (M54) | Regretted quits (J63) |
| People management skills (M54) | Non-regretted quits (J63) |
| People management skills (M54) | Employee attrition (higher-level positions) (J63) |
| People management skills (M54) | Employee attrition (J63) |
| People management skills (M54) | Employee attrition (J63) |