How Many People Is Good Performance Worth? Examining The Tradeoff Between Uncertain Task Performance and Subordinate Failure

Authors:

Abstract: Middle managers play a crucial role in organizations by implementing senior management strategies while directing and motivating their subordinates. Middle managers are critical to the achievement of performance goals, especially during times of change and experimentation. However, encouraging risk-taking and innovation can expose subordinates to potential negative consequences. Thus, middle managers need to balance the efficient completion of organizational tasks while supporting their subordinates. In this simulation-based work, we show that managers experience a crucial tradeoff—better performing subordinate teams come with higher rates of subordinate attrition. We additionally show that middle managers can mitigate this tradeoff by learning from subordinates' early failures. We discuss implications for the literatures on managerial well-being, responsible leadership, and managerial learning.

Track: ORG

Keywords: Middle manager, employee well-being, managerial learning