Seminario CEDE - Alexia Delfino

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Organizations often require employees to collaborate with others who may see the world differently, yet we know little about how misalignment in personal values affects performance within firms. Using survey and administrative data from a world-leading bank, we show that employees whose values diverge from their manager’s perform worse. This effect is not explained by demographic diversity, managerial biases or misalignment with organizational values. The productivity loss of moving from the least to the most misaligned worker is nearly four times larger than that of having a manager of a different gender. Value differences with teammates do not generate similar effects. We provide empirical evidence and a theoretical framework to show that value misalignment with managers can affect performance by discouraging employee-led communication.