Wharton's Matthew Bidwell discusses his research on what happens to an employee's pay and promotion when their boss leaves.

Employees who work for a bad boss may be waiting for the day when that person walks out the door. But new research from Wharton management professor Matthew Bidwell reveals how complicated turnover is for the staffers left behind. His paper, titled “My Manager Moved! Manager Mobility and Subordinates’ Career Outcomes,” examines how manager departures can change the path forward for both employee pay and promotion. The paper was co-authored by JR Keller, human resources professor at Cornell University’s ILR School, and Wharton doctoral student Minseo Baek. It appears in the journal Organization Science.

Bidwell joined Knowledge at Wharton to talk about the study and its findings. Listen to the podcast above or keep reading for an edited transcript of the conversation.

Knowledge at Wharton: People change jobs all the time, especially right now in this tight labor market. But instead of looking at employee mobility, you and your co-authors wanted to focus on what happens when the managers go. Why managers?

Matthew Bidwell: Yes, people move a lot. And in some of my earlier work, I looked at some of the consequences of that mobility – for example when people are hired into firms, how does their pay and performance compare to people who are promoted into similar jobs? We saw some big effects of mobility. So, the question that research spurred is: We know that mobility affects my own career. What effect does it have on other people? When I leave, it presumably also matters for the people around me.

We focus on managers because I think for most people, they’re the single most consequential person in their career. When I think about what happens when the people around me are moving, I look at the manager and say, “OK, if that manager leaves, is that good for me, is it bad for me, what are the effects?” It’s kind of second order relative to my own moves, but we think some of the second-order effects are interesting. It’s our own career, but how we pursue our own career affects those around us as well.

Knowledge at Wharton: In this study you looked at eight years’ worth of data from a major health care company. You were able to strip away some of the subjective variables, like whether a boss is good or bad, and you looked at objective variables about pay and promotion. Can you talk about the key takeaways of the study?

Bidwell: In this data analysis, we’ve got the career trajectories of people in this large health care company. We could see who their manager was at any point, so we could see when their manager changes, how those career trajectories alter.

“It’s our own career, but how we pursue our own career affects those around us as well.”

I think there were three interesting findings. The first one was the material impacts on performance evaluations and pay. When somebody’s manager leaves, they receive smaller pay raises than they would otherwise, smaller bonuses, all related to getting lower performance evaluations than they otherwise would have got. That’s also related to how long they’ve been with their manager. If I have a new manager and they leave, doesn’t matter too much. If I’ve been working with the same manager over a number of years and they leave, that has many more negative implications for my pay.

What we think is going on here is very simple: The longer I work with a manager, the better I get to know him or her. I understand what they need and how to supply it; they understand what I need and how to supply it. We work well together. Also, the manager gets to know me, gets to trust me, and therefore feels they want to provide me with whatever they can. The longer we’ve worked together, the more my manager is helping me. And when we sever that connection, when the manager leaves, I have to go back to starting to build a new relationship with a new manager. That takes time, and I lose some of those benefits of the relationship when that’s happening.

Knowledge at Wharton: It’s something that you mention in the paper as sponsorship, a relationship where the manager is trying to help you succeed.

Bidwell: Yes. The question of sponsorship versus favoritism is an interesting question, right?  But it is this idea that I’m their friend, they’re my friend, and because of that they’re trying to figure out how they get this person rewards. That’s part of it. So when that manager that I know well leaves, I lose those benefits. And that’s bad for me.

The more positive thing we found was that managers leaving was also associated with people being more likely to be promoted into other groups in the organization. What we think is going on here is, if I get on well with my manager, and my manager gets on well with me, we’ve got a lot invested in that relationship. We’re going to be a little reluctant to disrupt it. Obviously, this relationship gets disrupted when my manager leaves. It also gets disrupted when I move. If I’m getting on really well with my manager, I may be a little less motivated to seek out new promotions and new opportunities elsewhere. My manager leaves, I’m not so happy in my job, and I start thinking about other opportunities.

Generally, we tend to think relationships are good. But some people also talk about a dark side of relationships in various different ways, and one of those ways is this kind of inertia. We’re comfortable where we are, so we don’t go and look for something better. What we think is going on here is that when I’m working with the same manager over a number of years, I’m happy. I’m not wondering about what comes next. When I get this kind of push — my manager is leaving and I don’t know this new person so well — then I’m more likely to think about new opportunities, and some of those could actually be things that are better for me.

That’s the second thing we found. The third thing is kind of buried in the paper, but I found it really interesting. You mentioned in the lead-in that if I don’t like my manager, it’s going to be great when they leave. As I presented early drafts of this paper, that question came up a lot from people. It was like, “Well, surely it depends, right?” If I’m doing well under my manager, I don’t want them to go. If I’m doing poorly under my manager, then I’d be pretty happy.

We don’t have any good measures of exactly how much people like their manager, but what we can look at it is people’s performance evaluations — how well they’re being rated under the old manager. If some of my rating is [because] this particular manager happens to like me, then when that manager leaves, it should be a lot worse for me than if I’m getting a low rating. Because part of that low rating is probably also that the old manager doesn’t like me, and I get a new chance with a new manager.

“If I’m getting on really well with my manager, I may be a little less motivated to seek out new promotions and new opportunities elsewhere.”

We also saw these manager moves as a way of getting at how much of my performance relates to my idiosyncratic fit with my manager. The fact that I happen to click with this manager rather than a different manager. If we see a lot of my performance relates to that, then a change of manager should really change the rankings within the group. People who are doing well under the old manager should do less well under the new manager; people who are doing poorly under the old manager should do less poorly under the new manager.

One thing we found that surprised me is that how well you were doing under the old manager played very little role in shaping how well you did under the new manager. You would like to think, in some ways, getting a new manager is an opportunity for a reset for poor performance. We didn’t find that. It suggests that if you’re already doing well under the old manager, then having a new manager may not be such a threat.

That made me think a little bit about how idiosyncratic favoritism, the fact I happen to click with one manager, really plays a role in shaping my performance and my rewards. And [the study] suggested that the role of that idiosyncratic favoritism was maybe less than I would have guessed.

Knowledge at Wharton: What were the limitations of this research?

Bidwell: Like any research, there are all sorts of limitations. It’s only one organization, but I think most of the features are representative. We should see these effects of manager mobility more when managers have more discretion over rewards, so my relationship with my manager affects my pay.

One thing that we spent a lot of time worrying about in this paper is there are probably reasons why some managers move and some managers don’t ­­­– what the economists might call the endogeneity problem. That’s a big deal. But one thing we did look at is – we can see [in the data] all of the different reasons that managers leave. Do they get promoted, do they move laterally, do they leave the organization, do they get fired? We looked at consistency of effects across those, and it seemed to be reasonably consistent across the different reasons people left. Particularly, it didn’t look like you only saw these negative consequences when it was bad managers who left.

Knowledge at Wharton: What do you want managers to get from this paper and apply when they’re thinking about developing relationships with their subordinates?

Bidwell: Obviously, it takes a while to get to know people, and these relationships grow over time. At the higher levels of the organization, one of the questions is how much you want to move managers around? These are quite disruptive processes for the manager, for the organization, but for the people involved as well.

You probably have happier work groups where you have more stable manager relationships. One of the things we don’t go into here, but we know from other research, is also when managers move, subordinates are more likely to leave as well. Again, we sever these relationships, and as a subordinate, I start thinking more about what’s going to happen and what else I might be doing.

There’s research in other companies that the more frequent the reorganizations, the more likely people are to leave. There is this sort of double-edged sword for subordinates, which is, “I do well when I have this strong relationship, but maybe occasionally it makes me a little more complacent in my career.” I think for organizations too much disruption is not good. Maybe a little bit of disruption is OK.