SMART NEWS

Your Boss Gets Paid More Than You Because They Get More Done

Researchers took a look at the differences in productivity between the big wigs and employees

Contributor

August 22, 2012

Did you get your boss balloons recently? They might deserve them. Image: Editor B

Chances are you don’t love your boss. Even if you don’t hate them, you probably don’t understand why they’re the boss, and you’re not. You’re not going to like the answer: It’s because they really are more productive than you.

Researchers took a look at the differences in productivity between the big wigs and the employees. The results? The Atlantic explains:

Mathematically, taking a boss in the 10th percentile of productivity and replacing them with a supervisor in the 90th percentile was the rough equivalent of adding an extra worker to a nine-person team.

How did they figure that out? It often seems like bosses don’t do anything – and part of that is because what they do is hard to see. They manage people, set goals, and move things along. That’s also hard to quantify, and thus, hard to study. The authors of the paper found a company with about 24,000 workers and 2,000 bosses. The work these employees were doing was a repetitive task assessed and timed by a computer (sound familiar?) and the employees switched managers about every four months. This helped the researchers figure out if it was just a few really high performing bosses, or whether they were all about the same.

So if it seems like these bosses are never doing anything at all, why the effect? The Atlantic:

Either a boss might have been really good at motivating their team (i.e., they were a cheerleader, or maybe a drill sergeant) or they might have taught employees lasting skills (i.e., they were a coach). By looking at how well workers sustained their productivity after switching supervisors, the team concluded that teaching accounted for about two-thirds of a boss’s impact on his workers’ productivity.

At the end of the paper they do some round-about calculations to determine that each boss is worth about 1.75 employees. That’s also about how much more a boss is paid than his or her underlings.

This flies in the face of the Dilbert principal, the idea developed by a comic artist Scott Adams that middle management is where the least competent people go. He explains:

I wrote The Dilbert Principle around the concept that in many cases the least competent, least smart people are promoted, simply because they’re the ones you don’t want doing actual work. You want them ordering the doughnuts and yelling at people for not doing their assignments—you know, the easy work. Your heart surgeons and your computer programmers—your smart people—aren’t in management. That principle was literally happening everywhere.

A similar concept, the Peter Principle, suggests that eventually everyone will be promoted to one step above their level of ability. A 2009 study revisited the Peter Principle to see whether it held up to modeling. Turns out, it does. The study writes, “Here we show, by means of agent based simulations, that if the latter two features actually hold in a given model of an organization with a hierarchical structure, then not only is the Peter principle unavoidable, but also it yields in turn a significant reduction of the global efficiency of the organization.”

The new paper suggests that the Peter Principle doesn’t always hold. Bosses are, in fact, both qualified and effective in their roles, and they get paid accordingly. Yet another reason to hate your boss.