DP13125 Middle managers, personnel turnover and performance: A long-term field experiment in a retail chain

Author(s): Guido Friebel, Matthias Heinz, Nick Zubanov
Publication Date: August 2018
Keyword(s): communication, hierarchy, HR, insider econometrics, Managers, organizations, personnel turnover, randomized controlled trial (RCT)
JEL(s): L2, M1, M12, M5
Programme Areas: Labour Economics, Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=13125

In a field experiment, a large retail chain's CEO asked managers of treated stores "to do what they can" to reduce personnel turnover. Turnover decreases by a quarter for nine months; a reminder treatment triggers a similar decrease for a shorter period. Treated managers report shifting their time toward HR; their employees report more managerial attention and support. Store sales are unaffected, indicating that the possible performance increases related to managers spending more time on HR are neutralized by the effects of managers spending less time on customers and goods. The discernible efficiency gains occur at the firm, rather than at the store level.