Abstract:
Purpose – It is well known that micromanagement - excessive control of employees - is detrimental to the employees’ morale and thus, decreases their productivity. But what if the managers keep people happy - will there still be negative consequences of micromanagement? This is the problem -but simplified - mathematical models of how productivity depends on the working rate. Findings - We show that even in the absence of psychological discomfort, micromanagement is still detrimental to productivity. Interestingly, the negative effect of micromanagement increases as the population becomes more diverse. Originality/value - This is the first paper in which the purely economic consequences of micromanagement - separate from its psychological consequences - are studied in precise mathematical terms, and is the first paper that analyzes the relation between these consequences and diversity of the population.