Hideo Owan

(Waseda University)

will give a presentation on 

People Management Skills, Senior Leadership Skills and the Peter Principle

Abstract: 

This study examines how managers’ skills affect the performance and retention of the subordinates and how those skills are rewarded. We first develop a theoretical model in which the firm chooses between performance-based promotion and competency-based promotion in order to balance providing incentives and assigning right people to senior positions. The assumption is that one set of skills affects current performance, while the other is useful for higher-level positions. Then, using personnel records from a Japanese management consulting company, we identify two managerial skills: people management skills (PMS), which are mainly observed by subordinates, and senior leadership skills (SLS), which are mainly observed by superiors. Our analysis reveals that (1) PMS observed by subordinates positively predict subordinates’ performance; (2) PMS of managers and their SLS, such as coordination and information gathering skills, predict the retention of subordinates; (3) managers’ PMS predict their own performance evaluations but do not predict promotions; and (4) managers with higher SLS tend to be promoted. The results are consistent with the competency-based promotion policy.

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