Freakonomics Radio
Why Are There So Many Bad Bosses? (Ep. 495 Replay)
Mar 16, 2023
In this discussion, Katie Johnson, a data scientist, shares her challenging shift from contributing individual work to managing a team. Kelly Hsu, a Yale finance professor, dives into the Peter Principle, explaining how capable employees can falter in managerial roles. Steve Tadellis, an economics professor, discusses the significant impact of managers on employee productivity and satisfaction. Together, they explore the dynamics of ineffective leadership, the pressures of management, and how organizational promotion practices contribute to the prevalence of bad bosses.
49:53
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Quick takeaways
- Promoting based on performance often leads to incompetent managers.
- Technical specialist tracks offer an alternative to the Peter Principle dilemma.
Deep dives
The Peter Principle: How Promoting Top Performers Can Lead to Inadequate Managers
Promoting employees based on past performance motivates workers, offering a strong incentive system cheaper than pay raises. Research found that doubling worker sales increased chances of promotion by 30%. However, top salespersons often struggle as managers, leading to a decline in team performance. Firms aware of this still promote high performers, prioritizing motivation over managerial success.
