Dive Brief:
- Good managers are essential to a team’s performance, but the people who are most driven to pursue managerial roles may not be the best ones for the job, according to a new international study published in the Quarterly Journal of Economics.
- The impact good managers have on a team’s overall success is so significant that effective leadership could “cause their teams to produce more than the sum of their parts,” per the research. In other words, the overall performance of a manager “matters about as much to team performance as the combined productive capacity of workers.”
- However, people who are eager to become managers tend to underperform in the job. Researchers suggested that the kinds of people who make a clear play for managerial roles may be overconfident and may overestimate their social skills.
Dive Insight:
Most companies promote people to managerial roles based on the recommendations of existing managers, the report said. However, that method doesn’t generally account for biases.
For example, the study found that women don’t pursue managerial roles as often as men, “even though they performed just as well when randomly assigned” to managerial tasks. Companies also pick managers “based on personality traits and cognitive ability,” because these qualities tend to be positively associated with manager performance, the research said.
However, report authors said this wasn’t the best way to choose leaders at work. Instead, researchers said structured, competence-based promotions were the most effective predictors of managerial success.
“Good leadership is often associated with self-confidence, charisma or personality, but our results show that measures that are more closely associated with on-the-job tasks are much stronger indicators of manager success,” Joseph Vecci, an associate professor of economics at the the University of Gothenburg and one of the researchers behind the study, said in a statement.
The study noted that economic decision-making skills and fluid intelligence were the two skills that most accurately determined whether a manager would be good at their jobs.
“These relationships are robust to a wide range of controls, including age, gender, education, work experience, emotional perceptiveness, and personality traits including risk preferences,” the report said. “No other characteristics strongly predict managerial performance.”
Happiness is also a factor. An October report from Glassdoor found that manager satisfaction was connected to higher worker ratings when it came to work-life balance; culture and values; and diversity, equity and inclusion.
But the disconnect between managers and workers is growing. Recent research from human capital management firm Dayforce found that in 2025, only 42% of front-line workers believed that their company’s leaders understood their problems, down 20 percentage points from 2024. In addition, 89% of both front-line workers and managers said shift-level issues negatively affected their well-being, and nearly three-quarters (71%) said that the resulting issues made them think about quitting.
