Journal
JOURNAL OF POLITICAL ECONOMY
Volume 129, Issue 1, Pages 243-285Publisher
UNIV CHICAGO PRESS
DOI: 10.1086/711409
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The study shows that having good people management skills can lower employee turnover rate, while also leading to better performance evaluations, promotion opportunities, and salary increases for the managers themselves.
How much do a manager's interpersonal skills with subordinates, which we call people management skills, affect employee outcomes? Are managers rewarded for having such skills? Using personnel data from a large high-tech firm, we show that survey-measured people management skills have a strong negative relation to employee turnover. A causal interpretation is reinforced by several research designs, including those exploiting new workers joining the firm and workers switching managers. However, people management skills do not consistently improve most observed nonattrition outcomes. Better people managers themselves receive higher subjective performance ratings, higher promotion rates, and larger salary increases.
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