We find … better managers tend to match with worse workers, & vice versa. This stands in contrast to our estimates of the production technology, which reveal that if the firm were to positively sort, productivity would increase by 1 to 4%" https://www.nber.org/papers/w27006
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Replying to @robinhanson
How likely is it that this has something to do with Berkson's Paradox? (Bad workers+bad manager -> somebody gets fired, so only good+good, good+bad, or bad+good exist)
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Replying to @imhinesmi @robinhanson
Good workers plus good managers probably cost more than the productivity bonus, if that's only 4%.
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Replying to @argyriou15 @imhinesmi
The suggestion is just to resort the same people, not hire new people.
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Why would that work? Surely at the level of the firm you have same problem: mixing groups with low prod with other groups with high prod on same project should reduce overall output. The worst performing group can hold up whole project. You really need to sort into diff firms
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worst performing group wont hold up everything, because the other groups will be forced to do their job for them
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Yes, at a cost of productivity. Same thing is true in individual teams. Point is that it's not clear sorting into high and low prod teams is a net benefit if it only means that the high prod teams have to step outside their institutional expertise to do work of other teams.
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the paper cites 1-4% improvement for sorting its paywalled so i cant look at their methods, but presumably the authors were aware that making people work outside their expertise in inefficient
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I don't doubt that you can achieve this gain by sorting across companies but not sure if it would really make sense inside a single small company.
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why is sorting across companies different from sorting within a company?
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