Middle Managers, Personnel Turnover and Performance: A Long-Term Field Experiment in a Retail Chain

Abstract

In an RCT, a large retail chain's CEO sets new goals for the managers of the treated stores by asking them "to do what they can" to reduce the employee quit rate.The treatment decreases the quit rate by a fifth to a quarter, lasting nine months before petering out, but reappearing after a reminder. There is no treatment effect on sales.Further analysis reveals that treated store managers spend more time on HR and less on customer service. Our findings show that middle managers are instrumental in reducing personnel turnover, but they face a tradeoff between investing in different activities in a multitasking environment with limited resources. The treatment does produce efficiency gains. However, these occur only at the firm level.

What Do Employee Referral Programs Do? Measuring the Direct and Overall Effects of a Management Practice

“…Section 4.1 compares the impact of these treatments to our results. Controlling for a store's treatment status in Friebel et al (2018) does not affect any of our results.…”

“…15 Beyond the information provided, workers in R50, R90, and R120 received e15 after the referral was hired to provide an immediate reward. The remainder of e50, e90, or e120 (i.e., an additional e35, e75, e105) was paid if the referrer and referral reducing turnover (Friebel et al, 2018). Section 4.1 compares the impact of these treatments to our results.…”

What Do Employee Referral Programs Do? Measuring the Direct and Overall Effects of a Management Practice

“…The pre-RCT period is 2014m2-2015m10 (excluding 2015m11 since the RCT began midway through that month). The two treatments from Friebel et al (2018) are also balanced across the treatments here, with p-values of 0.87 (column 6) and 0.61 (column 8) for one treatment and 0.77 (column 6) and 0.82 (column 8) for the other treatment. * significant at 10%; ** significant at 5%; *** significant at 1% Notes: Standard errors clustered at the store level.…”

How Costly Is Turnover? Evidence from Retail

“…Friebel et al (2018) is the only field experiment we know of that attempts to manipulate turnover rates. While their intervention did reduce turnover, it also caused a re-allocation of middle managers' time that directly affected productivity.…”