Bosses, Mentors, and Careers
Paper Session
Sunday, Jan. 8, 2023 10:15 AM - 12:15 PM (CST)
- Chair: Kathryn Shaw, Stanford University
Talent Hoarding in Organizations
Abstract
Most organizations rely on managers to identify talented workers for promotions. However, managers who are evaluated on team performance have an incentive to hoard workers. This study provides the first empirical evidence of talent hoarding using novel personnel records from a large manufacturing firm. Temporary reductions of talent hoarding increase workers’ applications for promotions by 123%. By reducing the quality and performance of promoted workers, talent hoarding contributes to misallocation of talent. Because women react to talent hoarding more than men, talent hoarding perpetuates gender inequality in representation and pay at the firm.Potential and the Promotion Gap
Abstract
We show that widely-used subjective assessments of employee ``potential'' contribute to gender gaps in promotion and pay. Using data on 29,809 management-track employees from a large North American retail chain, we find that women receive substantially lower potential ratings despite receiving higher job performance ratings. Differences in potential ratings account for 30-50% of the gender promotion gap. Women's lower potential ratings do not appear to be based on accurate forecasts of future performance or attrition: women subsequently outperform male colleagues with the same potential ratings, both on average and on the margin of promotion, and women are less likely to exit the firm. Despite this, women's subsequent potential ratings remain low, suggesting that firms persistently underestimate the potential of their female employees.Superbosses: Managerial Career Effects of Leaders on Assistant Managers
Abstract
Finkelstein (2016) labels superbosses as talent spawners who have a remarkable ability to spot, train, and develop future generation of leaders. Two primary problems have prevented empirical studies that assesses how the quality of one’s boss influences one’s managerial career. First, corporation and government personnel records exclude those who leave the organization. Second, although the U.S. Census follows workers across their careers, it doesn’t indicate workers’ supervisors. To overcome these obstacles, we use data from labor markets with industry-level personnel records which document managers’ career progression within and between firms. We study three distinct but related markets: the coaching staffs of professional baseball, basketball, and football teams in North America. We find correlational evidence for the superboss hypothesis from professional football: assistants to successful head coaches are more likely to become head coaches themselves and to have higher regular season win percentages. Our results indicate that being an assistant to a head coach whose post-season wins are in the top 10% rather than bottom 10% increases the chance of becoming a head coach by 4.2%. Moreover, being an assistant under a 90th percentile head coach increases regular season win percentage by 27% relative to assistants under a 10th percentile head coach. However, the increased probability of becoming a head coach and improved performance do not translate into longer head coach careers. The probability of being hired as a head coach increases across the first 19 years as an assistant before declining with each subsequent year suggesting a trade-off between talent identification, development, and experience. In order to establish causal links from the assistant-head coach relationship to assistant coaches’ managerial outcomes, we exploit exogenous or quasi-random variation in head coaches (death, serious illness), coaching and front office personnel changes, and institutional changes (league expansions and contractions).Discussant(s)
Wayne A. Grove
,
Le Moyne College
Alan Benson
,
University of Minnesota
Christopher Stanton
,
Harvard University
Ingrid Haegele
,
Ludwig Maximilian University of Munich
JEL Classifications
- M5 - Personnel Economics
- J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers