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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…
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.