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Middle Managers, Personnel Turnover, and Performance: A Long‐Term Field Experiment in a Retail Chain

Author

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  • Guido Friebel

    (Department of Management and Microeconomics, Goethe University Frankfurt, 60323 Frankfurt/Main, Germany)

  • Matthias Heinz

    (Department of Management, University of Cologne, 50923 Cologne, Germany)

  • Nikolay Zubanov

    (Department of Economics, University of Konstanz, 78464 Konstanz, Germany)

Abstract

In a randomized controlled trial, a large retail chain’s Chief Executive Officer (CEO) sets new goals for the managers of the treated stores by asking them to “do what they can” to reduce the employee quit rate. The treatment decreases the quit rate by a fifth to a quarter, lasting nine months before petering out, but reappearing after a reminder. There is no treatment effect on sales. Further analysis reveals that treated store managers spend more time on human resources (HR) and less on customer service. Our findings show that middle managers are instrumental in reducing personnel turnover, but they face a trade-off between investing in different activities in a multitasking environment with limited resources. The treatment does produce efficiency gains. However, these occur only at the firm level.

Suggested Citation

  • Guido Friebel & Matthias Heinz & Nikolay Zubanov, 2022. "Middle Managers, Personnel Turnover, and Performance: A Long‐Term Field Experiment in a Retail Chain," Management Science, INFORMS, vol. 68(1), pages 211-229, January.
    • Handle: RePEc:inm:ormnsc:v:68:y:2022:i:1:p:211-229
    DOI: 10.1287/mnsc.2020.3905
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    1. Kosfeld, Michael & Haylock, Michael & Kampkötter, Patrick & Von Siemens, Ferdinand, 2023. "Helping and Antisocial Behavior in the Workplace," CEPR Discussion Papers 18154, C.E.P.R. Discussion Papers.
    2. Mitchell Hoffman & Steven Tadelis, 2021. "People Management Skills, Employee Attrition, and Manager Rewards: An Empirical Analysis," Journal of Political Economy, University of Chicago Press, vol. 129(1), pages 243-285.
    3. Guido Friebel & Matthias Heinz & Mitchell Hoffman & Nick Zubanov, 2023. "What Do Employee Referral Programs Do? Measuring the Direct and Overall Effects of a Management Practice," Journal of Political Economy, University of Chicago Press, vol. 131(3), pages 633-686.
    4. Zubanov, Nick & Shakina, Elena, 2023. "Performance Costs and Benefits of Collective Turnover: A Theory-Driven Measurement Framework and Applications," IZA Discussion Papers 16413, Institute of Labor Economics (IZA).
    5. Serra-Sastre, Victoria, 2024. "Workplace violence and intention to quit in the English NHS," LSE Research Online Documents on Economics 121623, London School of Economics and Political Science, LSE Library.

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    More about this item

    Keywords

    organizations; randomized controlled trial (RCT); insider econometrics; goal setting; communication; HR; personnel turnover and firm performance;
    All these keywords.

    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics

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