The Value of Bosses

Type:

SIEPR Discussion Paper 12-001

Author(s):

Published:

10/3/12

Abstract:

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 about the same amount as would adding one worker to a nine member team. This implies that the average boss is about 1.75 times as productive as the average worker. Additionally, boss’s primary activity is teaching skills that persist.

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