What’s a good manager worth? 2

As a manager, what are you worth?

Much has been written about the value of CEOs. Companies justify huge bonuses and compensation packages to keep top talent from moving on. But what about middle management, department managers, shift managers? How can their worth be measured?

The National Bureau of Economic Research published a working paper written by Edward P Lazear, Kathryn L. Shaw and Christopher T. Stanton . It is titled The Value of Bosses. What I found exciting is they looked at value from a productivity standpoint.  There were three conclusions:

  1. The choice of boss matters. There is substantial variation in boss quality as measured by the effect on worker productivity. The average boss is about 1.75 times as productive as the average worker
  2. A boss’s primary activity is teaching skills that persist.
  3. Efficient assignment allocates the better bosses to the better workers because good bosses increase the productivity of high quality workers by more than that of low quality workers.

Simply put, you can get more out of your better workers when they are led by a better boss. Better bosses teach. Better bosses inspire.

Better bosses make their employees more efficient. Michael Quinlan as President of McDonald’s Corporation said that “one of the most important aspects of his job-and one at which he spends approximately one-third of his time-was cutting red tape.

Productivity is a wonderful measure of worth. As a manager, you create value for your team (and for yourself) when productivity increases. Every one of us as managers should look at the value we are currently providing and make sure we are doing the things that will continue to show our worth as boss.