Study details

For the study, Minni, an assistant professor of economics at the University of Chicago Booth School of Business, analyzed data from 200,000 workers and 30,000 managers across 100 countries over a 10-year period.

To identify high performers, Minni sought out those who "rose through the ranks of the company at a faster pace than their peers," noting that "[e]arly promotion usually goes hand in hand with other markers of merit, such as salary growth and standout 360-degree performance ratings."

She then leveraged the firm's manager rotations to isolate managerial impact. "Let's say two different teams of comparable workers have a regular boss... Then the managers rotate, and one of those two teams gets a top-performing leader while the other team gets another lesser chief," Minni writes. "Since the two teams are otherwise the same, the manager would be responsible for any changes in performance."

The results were striking. Employees who had contact with a high-quality manager were about 40% more likely to make a lateral move within seven years, and these moves "often involved large changes, such as moving between completely different roles at the company." Workers who served under these top managers and changed jobs earned about 13% more within seven years, and their performance metrics were 16% higher.

What this means

Minni argues that the durability of these gains rules out charisma or short-term coaching as explanations. "If a top manager were just a good coach or motivator, employees would show big gains while serving under the top manager, and the gains would fade once the high-performing leader left the scene," she writes. "But worker mobility and pay rose steadily even after the manager departed."

Likewise, if a great manager was "just a good teacher," Minni writes, employee performance might improve in their current jobs, but "they wouldn't necessarily move on to very different roles and thrive there." Yet, that's exactly what happened.

The through line, Minni argues, is talent matching. "Clearly, the managers had a knack for finding workers' unrecognized strengths and aspirations, and steering them toward better-fitting roles," she writes.

Minni recounts examples of managers spotting potential — a supervisor who noticed an employee's interest in graphic design and reassigned them to "lead the design of part of a new campaign," and another who facilitated cross-training to help an employee "move into a new role that was a better fit."

Her prescription for company leaders is clear: "[M]easure and reward managers for developing talent through smart reassignments, not just team output," Minni writes. The bottom line, she says, is that "[p]utting workers in just the right spot is what top managers do best. Companies must recognize that strength and make the most of it."