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How Do You Identify a Good Manager?

Author

Listed:
  • Ben Weidmann
  • Joseph Vecci
  • Farah Said
  • Sonia Bhalotra
  • Achyuta Adhvaryu
  • Anant Nyshadham
  • Jorge Tamayo
  • David Deming

Abstract

This paper introduces and validates a novel approach to measuring management skills. In a large pre-registered lab experiment we causally identify managerial contributions by randomly assigning managers to multiple teams and controlling for differences in individual skill. We find that manager contributions matter greatly for team success, and that people who want to be in charge perform worse than randomly assigned managers. Managerial performance is strongly predicted by economic decision-making skill, but not by demographic characteristics. LinkedIn data show that participants who succeed in the lab are substantially more likely to receive real-world promotions. We also measure the skills of store managers in a large retail firm and find that they predict store sales and other correlates of productivity, which aligns with our experimental results. A one standard deviation increase in manager quality increases annual per-store sales by $4.1 million USD (25% increase). Selecting managers on skills rather than demographic characteristics or the desire to lead could substantially improve organizational performance.

Suggested Citation

  • Ben Weidmann & Joseph Vecci & Farah Said & Sonia Bhalotra & Achyuta Adhvaryu & Anant Nyshadham & Jorge Tamayo & David Deming, 2025. "How Do You Identify a Good Manager?," RFBerlin Discussion Paper Series 2591, ROCKWOOL Foundation Berlin (RFBerlin).
    • Handle: RePEc:crm:wpaper:2591
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    Cited by:

    1. is not listed on IDEAS
    2. David Dorn & Florian Schoner & Moritz Seebacher & Lisa Simon & Ludger Woessmann, 2024. "Multidimensional Skills on LinkedIn Profiles: Measuring Human Capital and the Gender Skill Gap," Papers 2409.18638, arXiv.org, revised May 2025.
    3. Max Coveney & Pilar Garcia-Gomez & Teresa Marreiros Bago d'Uva, 2025. "Gender and Performance in Collaboration: Evidence from Random Student Teams," Tinbergen Institute Discussion Papers 25-032/V, Tinbergen Institute.
    4. Mitchell Hoffman & Christopher T. Stanton, 2024. "People, Practices, and Productivity: A Review of New Advances in Personnel Economics," NBER Working Papers 32849, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

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    JEL classification:

    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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