We all know that bosses can be jerks. Now economists think they understand why — although the reason may surprise you.
As it turns out, most companies end up promoting their best-performing employees, giving them responsibility for supervising others workers. The problem, new research shows, is that the skills that made employees succeed at their initial jobs don’t help when it comes to supervising others — and may actually hurt.
“You might have been successful because of your independence and autonomy,” says the study’s co-author, Alan Benson, from the University of Minnesota. But supervising others requires a totally different set of skills — like the ability to collaborate and share credit. “You can’t do everything yourself when you are a manager,” he adds.
Benson, along with colleagues from Yale and MIT, used data collected by sales management software to examine track records for salespeople and managers at 214 different U.S. and international companies. They found that that top performers were regularly rewarded for their good work: Successful salespeople increased their chances of winning a promotion by about 14% each time they doubled their sales.
Once they were in their new higher-ranking jobs, however, these stars frequently struggled. Subordinate salespeople working under newly promoted managers saw their own performance decline 7.5% for every doubling in the manager’s pre-promotion performance.
By contrast, new managers who were promoted despite their own poor or middling sales performance tended to improve performance in subordinates.
Indeed, the researchers found that “sales collaboration experience” correlated with being a good manager — but not with earning the promotions in the first place.
So will a wave of promotions for the nice-guy-who-finished-last suddenly sweep corporate America? Don’t count on it.
Firms do appear to be paying a hefty price for filling their ranks with bad bosses. The study estimated that subordinates’ performance could be boosted by up 30% if their companies promoted the best potential managers into leadership roles.
Yet the researchers were quick to point out that employers may not want to change. After all, nothing gets workers cracking like the prospect of winning a big promotion.
The upshot: Many companies may simply have decided that a badly run organization full of hungry strivers gunning for the top will ultimately outperform one that’s less motivated, if but better managed.