Middle Managers, Personnel Turnover, and Performance: A Long‐Term Field Experiment in a Retail Chain

In a randomized controlled trial, a large retail chain’s Chief Executive Officer (CEO) sets new goals for the managers of the treated stores by asking them to “do what they can” to reduce the employee quit rate. The treatment decreases the quit rate by a fifth to a quarter, lasting nine months befor...

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Bibliographic Details
Published in:Management science 2022-01, Vol.68 (1), p.211-229
Main Authors: Friebel, Guido, Heinz, Matthias, Zubanov, Nikolay
Format: Article
Language:English
Subjects:
Chief executive officers
Clinical trials
communication
Employee turnover
goal setting
HR
Human resource management
Human resources
insider econometrics
Managers
Middle managers
organizations
personnel turnover and firm performance
Quality of service
randomized controlled trial (RCT)
Sales
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Summary:In a randomized controlled trial, a large retail chain’s Chief Executive Officer (CEO) sets new goals for the managers of the treated stores by asking them to “do what they can” to reduce the employee quit rate. The treatment decreases the quit rate by a fifth to a quarter, lasting nine months before petering out, but reappearing after a reminder. There is no treatment effect on sales. Further analysis reveals that treated store managers spend more time on human resources (HR) and less on customer service. Our findings show that middle managers are instrumental in reducing personnel turnover, but they face a trade-off between investing in different activities in a multitasking environment with limited resources. The treatment does produce efficiency gains. However, these occur only at the firm level. This paper was accepted by Joshua Gans, business strategy.
ISSN:0025-1909
1526-5501
DOI:10.1287/mnsc.2020.3905