Value Dissonance at Work

Organizations often require employees to collaborate with others who may see the world differently, yet we know little about how misalignment in personal values affects performance within firms. Using survey and administrative data from a world-leading bank, we show that employees whose values diverge from those of their manager perform worse. This effect is not explained by demographic diversity or misalignment with organizational values. The productivity loss from moving from the least to the most misaligned worker is nearly four times larger than that associated with having a manager of a different gender. In contrast, value differences with teammates do not generate similar effects. We show, both empirically and theoretically, that the performance costs of value misalignment with managers can be explained by a decline in employee-led communication: fear of misunderstanding suppresses voice and information-seeking, increasing uncertainty about managerial expectations and lowering output.