The impact of managerial quality on organizational performance: evidence from German soccer

Although a considerable literature exists on the determinants of managerial compensation, much of it focussing on the role of incentives, there is much less known about the impact of managerial remuneration and quality upon attainment of organizational goals. In this paper we apply two distinct econometric methods to panel data on head coach quality and team performance in Germany's premier soccer league. We find that, given a particular amount of spending on players relative to the rest of the league, a team that hires a better quality head coach can expect to achieve improved performance.