Good vs. Bad Bosses and How They Affect Employees

Good vs. Bad Bosses and How They Affect Employees

Maybe you haven’t had a boss as crazy as the ones depicted in the Horrible Bosses movie, but chances are we’ve all had our share of bad bosses. The micromanager. The bully. The workaholic. The bad communicator. The credit hog.

According to one study, one in five employees have had their careers hurt by a bad boss. Often times, this is because bad bosses lead to bad performance, experts say, and the effect can linger. But what about good bosses, how much of an effect does the quality of a boss have on employee performance?

Harvard Business School Assistant Professor Christopher Stanton tries to answer that question in The Value of Bosses, a paper recently published in the Journal of Labor Economics. Stanton, who co-wrote the study with Edward Lazear and Kathryn Shaw of the Stanford Graduate School of Business, where he began the research as part of this dissertation in 2011, suggests that good bosses are a great deal better than bad ones. The research found that by replacing a supervisor from the bottom 10-percent of the pool with one from the top 10-percent increases output about as much as adding one worker to a nine member team.

In order to isolate the effects of bosses on workers, Stanton and coauthors worked with “technology-based services” company that tracked all of its workers’ transaction times. Supervisors were rotated on an on-going basis, so workers would have different bosses every few months. It turns out, having a good boss does equate to better job performance.

The main impact effective supervisors have on their employees doesn’t come from motivating or supervising them per se, according to the study, it comes from teaching them better work methods. About two-thirds of the productivity boost from working under a good supervisor persists even after the worker switches bosses. That leads the authors to conclude that “teaching”—imparting better methods or skills—is the biggest part of effective supervision. The good boss effect does decay over time, however, so that after six months only about 18 percent of the boost remains.

The second finding: The most efficient structure is to assign the best workers to the best bosses rather than have the best bosses bring the weakest workers up to speed. “Maximizing the value of bosses requires that the better bosses be assigned to the better workers,” they conclude, because workers increase their output so much when working with star supervisors.

Overall, however, the effects of their study point to the outsized influence that supervisors up and down the chain of command—not just upper managers or C-level executives—can have on worker performance.

“These research suggest the most important peer is your supervisor.”