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The truth about promotions A new study reveals that companies are picking managers in the worst possible way


 A new study reveals that companies are picking managers in the worst possible way.

The Lede

How do you choose the right people to be in charge? It's a question that businesses have wrestled with for as long as corporate hierarchies have existed. The days of blatant nepotism have been replaced, for the most part, by a system that strives for meritocracy. But what if we're still going about it all wrong? That's the conclusion of a new study published by the National Bureau of Economic Research.

Key Details

  • Self-promotion is one of the primary ways companies select managers. However, the study found that the groups in which managers were selected by self-preference performed worse than those in which managers were chosen by lottery.
  • Good supervisors have nearly twice as much impact on team performance — which means companies are losing out on productivity by choosing the wrong managers.
  • What was much better at predicting good managers measuring one's competence at decision-making?

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