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CEP discussion paper
Building a productive workforce: the role of structured management practices
Christopher Cornwell, Ian M. Schmutte and Daniela Scur August 2019
Paper No' CEPDP1644:
Full Paper (pdf)

JEL Classification: D22; M11; J31

Tags: labor allocation; managers; management practices; productivity

Firms’ hiring and firing decisions affect the entire labor market. Managers often make these decisions, yet the effects of management on labor allocation remains largely unexplored. To study the relationship between a firm’s management practices and how it recruits, retains and dismisses its employees, we link a survey of firm-level management practices to production and employee records from Brazil. We find that firms using structured management practices consistently hire and retain better workers, and fire more selectively. Good production workers match with firms using structured personnel management practices. By contrast, better managers match with firms using structured operations management practices.