We all have our boss horror stories. The underminer. The bad communicator. The credit hog. The snake. Then again, if we're lucky, we've all had those amazing bosses as well. The supervisor who encourages all employees to take their work up to the next level; the manager who makes everyone around them look better.
By Michael Blanding www.forbes.com 
We all have our boss horror stories. The underminer. The bad communicator. The credit hog. The snake. Then again, if we’re lucky, we’ve all had those amazing bosses as well—the supervisor who encourages all employees to take their work up to the next level; the manager who makes everyone around them look better.
But how much of an effect does a good or bad boss have on workers, really? Harvard Business School Assistant Professor Christopher Stanton sets out to ask that question in The Value of Bosses , a paper recently published in the Journal of Labor Economics —and finds out the answer is, quite a lot.
Academics and practitioners alike are interested in how to construct the best teams to get the most productivity out of people working together. But comparatively little attention has been placed on those people supervising teams. In part, that’s because it’s difficult to separate the performance of the boss from the performance of the individual workers he or she oversees.
‘Bosses may get lucky and have subordinates who can do their job well—or, in other settings, they can get really unlucky and have one person who poisons the whole bunch,’ says Stanton, who co-wrote the study with Edward Lazear and Kathryn Shaw of the Stanford Graduate School of Business, where he began the research as part of his dissertation in 2011.
In order to isolate the effects of bosses on workers, Stanton and coauthors worked with a technology-based services company that tracked all of its workers’ transaction times. Importantly, supervisors were rotated on an ongoing basis, so workers would have different bosses every few months. Looking at the company’s data, Stanton and colleagues discovered a wide range of worker performance.
‘There was tremendous variety in the productivity of workers doing the same task compared to other workers who looked similar at the start,’ Stanton says. But for particular workers, their individual performance fluctuated in a predictable pattern according to which boss they worked with at a given time—with some bosses just clearly better than others. ‘In our setting, idiosyncratic effects of bosses on certain workers were quite small—on average, Boss A was uniformly better than Boss B for everyone.’
Measuring Boss Quality
To measure boss quality, the researchers looked at transaction times for the workers under them on any given day (due to confidentiality agreements, he can’t say what the transaction is—but a good analogy is the amount of time it takes for a grocery clerk to ring up a customer; or a call center employee to troubleshoot a customer’s problem). To a lesser extent, they also looked at the amount of time employees actually spent with customers compared to other duties; and customer surveys of worker quality.
When they examined all of this data, they concluded that replacing a boss who was in the bottom 10% of the distribution with a boss who was in the top 10% had the same effect as adding another whole worker to a nine-person team—a huge effect for such a small variation in quality.