Determinants of Managerial Quality


What combination of skills and traits make for a good manager, specifically in a manufacturing setting in a developing country? We matched two years’ data on daily, line-level production from 6 garment factories to find out how various managerial traits of a supervisor affect worker productivity.

  • Traits studied were - tenure, cognitive skills, autonomy, personality, control, attention, and relatability to workers.
  • The tenure and cognitive skills of a supervisor are key drivers of a worker's productivity.
  • Traits which are not easily observable, like relatability to workers seem to be undervalued in pay overall.

Partners:
Department for International Development, UK Government | Private Enterprise Development in Low-Income Countries (PEDL) | International Growth Centre | Boston College | University of Michigan | Shahi Exports | Options and Solutions | University of Michigan | Boston College | Harvard University
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TIMELINE

TESTING

Jul-2013

ANALYSIS

Jun-2015

Introduction

How important is managerial quality in determining worker productivity on a garment factory floor? What makes for a 'good' manager? Does the market appropriately price these desirable managerial traits?

  1. We matched two years worth of data on daily, line-level production from 6 garment factories to understand key drivers of productivity.
  2. The managerial traits we observed, through extensive surveys, were - tenure, cognitive skills, autonomy, personality, control, attention, and relatability to workers.
  3. We found that some traits affect the rate of learning of workers much more than others, and the more observable ones figure only partially in the pay of good managers.
  4. These insights add to global discussions on the importance of managerial quality on prouctivity, specifically in a developing country.

Design

We matched two years worth of data on daily, line-level production from 6 garment factories to understand key drivers of worker productivity. The managerial traits we observed, through extensive surveying, were - enure, cognitive skills, autonomy, personality, control, attention, and relatability to workers, through extensive one-on-one surveys.

Data Insights

We found that some qualitative dimensions (e.g., cognitive skills and personality) of the supervisor contribute to initial productivity of the line, but do not significantly impact the rate of learning. On the other hand, production lines with supervisors exercising greater managerial autonomy learn at significantly faster rates, but do not start product runs at higher initial productivity levels. Vocation-specific experience of the supervisor impacts both, initial productivity and the rate of learning of the line. Further, analysis of manager pay shows that easily measured dimensions of managerial quality like tenure, attention, and cognitive skills, though still undervalued in pay, are much more likely to be factored in as opposed to unobservable traits, which are important drivers of productivity as well.

Media Mentions

New foundation promotes soft skills for workers in India

By Michigan News / 21-Mar-2018

Training workers with soft skills like time and stress management, problem solving, communication and teamwork can have big impacts on the productivity of workers and company profits, says a University of Michigan researcher Achyuta Adhvaryu, assistant professor of business economics and public policy at Michigan's Ross School of Business.

Good Business Lab: New foundation promotes soft skills for workers in garment sector

By The Economic Times / 31-Mar-2018

"Our goal with starting a foundation is to study interventions that have the potential to impact worker welfare while also promoting the growth of firms," Adhvaryu said in a statement. "We incubate new ideas and serve as a platform to disseminate findings from our research."

Investing in Worker Welfare Increases Welfare and Firm Productivity: Good Business Lab

By BusinessWorld / 11-Jan-2018

In an exclusive interview with BW Businessworld, the three co-founders of Good Business Lab, Achyuta Adhvaryu: Assistant Professor of Business Economics and Public Policy, University of Michigan, Anant Nyshadham: Assistant Professor of Economics, Boston College and Anant Ahuja: Head of Organizational Development, Shahi Exports discuss the research of Good Business Lab and why it is wise for firms to invest in its workers’ welfare.