Labor Seminars Amsterdam

Matthias Heinz (University of Cologne, Germany)
Tuesday, 11 October 2016

Middle managers are the backbone of modern organizations. Can they be persuaded to improve performance outcomes without additional direct incentives? We conduct a field experiment in a retail chain of 238 stores that was struggling with high employee turnover. On behalf of the CEO, we asked the managers in randomly selected stores to do what they can to reduce turnover. The treatment effect is one-third of the baseline quit rate and persisted for nine months. Employee and manager interviews reveal that managers in the treated stores increased their efforts to tackle turnover; in particular, they communicated more with their employees.