Managerial Ability and Employee Productivity ^*

Abstract

Purpose – This study examines how managerial ability relates to employee productivity using a broad and generalized sample of US firms.

Methodology – This study employs a generalized sample of firm-years from all industries between 1980 and 2013.

Findings – By contending that managers differ in their ability to synchronize management processes and human capital in ways that enhance employee productivity, the authors provide evidence showing that more-able managers are associated with higher employee productivity. In addition, the authors find that high-ability managers moderate the negative relation between uncertain environments (high-technology firms) and employee productivity. Furthermore, the authors decompose employee productivity into employee efficiency components and employee cost components. The authors find a significant positive association between managerial ability and the employee efficiency component, but do not see a significant association between managerial ability and the employee cost component.

Value – The results contribute to the understanding of employee productivity by showing the relation between managerial ability and employee productivity.

Citation

Ghosh, D., Huang, X.(. and Sun, L. (2020), "Managerial Ability and Employee Productivity ^* ", Burney, L.L. (Ed.) Advances in Management Accounting (Advances in Management Accounting, Vol. 32), Emerald Publishing Limited, Leeds, pp. 151-180. https://doi.org/10.1108/S1474-787120200000032006