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Hiring the right people is essential to the success of any business, and promoting the right people may be even more important. A good boss is 1.75 times more productive than the people he or she supervises, according to a recent study by Edward Lazear and Kathryn L. Shaw at Stanford and Christopher Stanton at University of Utah.
The researchers wanted to find out if the “extreme view” that bosses are irrelevant was valid and studied 20,000 American workers and their bosses over a period of five years.
They found that good bosses were incredibly productive and more valuable than the average employee:
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. Using a normalization, this implies that the average boss is about 1.75 times as productive as the average worker. Second, boss’s primary activity is teaching skills that persist. Third, 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.
And the bad supervisors tended to take care of themselves: they were 70 per cent more likely to leave the firm within a year.
Good supervisors are vital to the success of business, and are well-worth the money.
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