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 analyzed in this paper.
Design/methodology/approach: To analyze our problem, we use general -- 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 the first paper that analyzes the relation between these consequences and diversity of the population.