Improving Management through Worker Evaluations: Evidence from Auto Manufacturing

Using a randomized experiment with an automobile manufacturing firm in China, we measure the effects of letting workers evaluate their managers on worker and firm outcomes. In the treatment teams, workers evaluate their supervisors monthly, and their score directly affects in a small way the monthly bonus pay of managers. We find that providing feedback and incentivizing managers in this way leads to significant reductions in worker turnover and increases in team-level productivity. In addition, workers report higher levels of happiness and positive mood.

• Economic Development Seminar
• Shing-Yi Wang