People Management Skills, Employee Attrition, and Manager Rewards: An Empirical Analysis People Management Skills, Employee Attrition, and Manager Rewards: An Empirical Analysis∗

How much do a manager’s interpersonal skills with subordinates, which we call people management skills, affect employee outcomes? Are managers rewarded for having such skills? Using personnel data from a large, high-tech firm, we show that survey-measured people management skills have a strong negative relation to employee turnover. A causal interpretation is reinforced by research designs exploiting new workers joining the firm and managers moving jobs. However, people management skills do not consistently improve non-attrition outcomes. Better people managers are themselves more likely to receive higher subjective performance ratings and to be promoted. JEL Classifications : M50, J24, J33, D23, L23