People who are good at their jobs routinely get promoted into bigger jobs they’re bad at. We explain why firms keep producing incompetent managers — and why that’s unlikely to change.
SOURCES:Nick Bloom • , professor of economics at Stanford University. Katie Johnson • , freelance data and analytics coach. Kelly Shue • , professor of finance at the Yale University School of Management. Steve Tadelis • , professor of economics at the University of California, Berkeley Haas School of Business.
RESOURCES: • “ People Management Skills, Employee Attrition, and Manager Rewards: An Empirical Analysis • ,” by Mitchell Hoffman and Steven Tadelis ( Journal of Political Economy, • 2021). • “ Promotions and the Peter Principle • ,” by Alan Benson, Danielle Li, and Kelly Shue ( The Quarterly Journal of Economics, • 2019). • “ Bosses Matter: The Effects of Managers on Workers’ Performance • ,” by Kathryn L. Shaw (IZA World of Labor, 2019). • “ The Value of Bosses • ,” by Edward P. Lazear, Kathryn L. Shaw, and Christopher T. Stanton ( Journal of Labor Economics, • 2015). The Peter Principle: Why Things Always Go Wrong, • by Laurence J. Peter and Raymond Hull (1969).
EXTRAS: • “ The Secret Life of C.E.O.s • ” series by Freakonomics Radio. • “ What Does a C.E.O. Actually Do? • ” by Freakonomics Radio • (2018).
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