nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2012‒03‒08
eleven papers chosen by
Tommaso Reggiani
Universita' di Bologna

  1. Job design with conflicting tasks reconsidered By Schmitz, Patrick W.
  2. Age differences in the reaction to incentives – do older people avoid competition? By Sproten, Alec N.; Schwieren, Christiane
  3. Run For Fun: Intrinsic Motivation and Physical Performance By Filippin, A.; Ours, J.C. van
  4. The Pitfalls of Work Requirements in Welfare-to-Work Policies: Experimental Evidence on Human Capital Accumulation in the Self-Sufficiency Project By Riddell, Chris; Riddell, W. Craig
  5. Pay Dispersion and Work Performance By Alessandro Bucciol; Marco Piovesan
  6. Subjective Performance Evaluations and Employee Careers By Frederiksen, Anders; Lange, Fabian; Kriechel, Ben
  7. Incentives Beyond the Money and Motivational Capital in Health Care Organizations. By Mikel Berdud; Juan M. Cabasés Hita
  8. To Convergence and Beyond? Human Capital, Economic Adjustment and a Return to Growth By FitzGerald, John
  9. Desert and inequity aversion in teams By David, Gill; Rebecca, Stone
  10. Are Ambidextrous Intellectual Capital and HRM Needed for an Ambidextrous Learning? By Mirta Díaz; Susana Pasamar; Ramón Valle
  11. What Are Over-the-Road Truckers Paid For? Evidence from an Exogenous Regulatory Change on the Role of Social Comparisons and Work Organization in Wage Determination By Burks, Stephen V.; Guy, Frederick

  1. By: Schmitz, Patrick W.
    Abstract: A principal wants two sequential tasks to be performed by wealth-constrained agents. When the tasks are conflicting (i.e., when a first-stage success makes second-stage effort less effective), the principal's profit-maximizing way to induce high efforts is to hire one agent to perform both tasks. In this case, the prospect to get a larger second-stage rent after a first-stage success motivates the agent to work hard in the first stage. In contrast, when the tasks are synergistic, the principal prefers to hire two different agents for the two tasks. These results are in contrast to previous studies that consider simultaneous tasks.
    Keywords: moral hazard; limited liability; conflicting tasks; synergies
    JEL: D23 D86 L23 M12 M54
    Date: 2012–02
  2. By: Sproten, Alec N.; Schwieren, Christiane
    Abstract: The “aging employee” has recently become a hot topic in many fields of behavioural research. With the aim to determine the effects of different incentive schemes (competition, social or increased monetary incentives) on performance of young and older subjects, we look at behaviour of a group of younger and older adults on a well-established real effort task. We show that older adults differ from younger adults in their performance in all conditions, but not in the improvement between conditions. The age difference in performance is however driven by women. While we replicate the gender difference in competitiveness found in the literature, we do not find a significant age difference in competitiveness. Social incentives have an at least as strong or even stronger effect on performance than increased monetary incentives. This effect is driven by men; women do not show an increase in performance with social incentives.
    Keywords: aging; competition; social production functions; experiment; incentives
    JEL: C72 C91 J10 J33
    Date: 2012–02–17
  3. By: Filippin, A.; Ours, J.C. van (Tilburg University, Center for Economic Research)
    Abstract: Abstract: We use data from the 24-hours Belluno run which has the unique characteristic that participants are affiliated with teams and run for an hour. This allows us not only to study the individual relationship between age and performance but also to study group dynamics in terms of accessions to and separations from teams in a manner that closely resembles workers and firms when individual productivity would have been perfectly observable. From our analysis we conclude that individual performance goes down with age, although the speed-age gradient is rather at. Group performance goes down with age as well, but interestingly a counterbalancing force emerges, namely team dynamics that are driven by performance of runners who enter and leave.
    Keywords: Age;performance;attrition.
    JEL: J14 J24 J31
    Date: 2012
  4. By: Riddell, Chris (Cornell University); Riddell, W. Craig (University of British Columbia, Vancouver)
    Abstract: This paper investigates whether policies that encourage recipients to exit welfare for full-time employment influence participation in educational activity. The Self-Sufficiency Project ('SSP') was a demonstration project where long-term welfare recipients randomly assigned to the treatment group were offered a generous earnings supplement if they exited welfare for full-time employment. We find that treatment group members were less likely to upgrade their education along all dimensions: high-school completion, enrolling in a community college or trade school, and enrolling in university. Thus, 'work-first'; policies that encourage full-time employment may reduce educational activity and may have adverse consequences on the long-run earnings capacity of welfare recipients. We also find that there was a substantial amount of educational upgrading in this population. For instance, among high-school dropouts at the baseline, 19% completed their diploma by the end of the demonstration. Finally, we simulate the consequences of the earnings supplement in the absence of adverse effects on educational upgrading. Doing so alters the interpretation of the lessons from the SSP demonstration.
    Keywords: welfare policy, human capital, experimental methods, earnings supplementation
    JEL: I38 J08 J24
    Date: 2012–02
  5. By: Alessandro Bucciol (University of Verona); Marco Piovesan (Harvard Business School)
    Abstract: The effect of intra-firm pay dispersion on work performance is controversial and the empirical evidence is mixed. High pay dispersion may act as an extra incentive for employees' effort or it may reduce motivation and team cohesiveness. These effects can also coexist and the prevalence of one effect over the other may depend on the use of different definitions of what constitutes a "team." For this paper we collected a unique dataset from the men's major soccer league in Italy. For each match we computed the exact pay dispersion of each work team and estimated its effect on team performance. Our results show that when the work team is considered to consist of only the players who contribute to the result, high pay dispersion has a detrimental impact on team performance. Several robustness checks confirm this result. In addition, we show that enlarging the definition of work team causes this effect to disappear or even become positive. Finally, we find that the detrimental effect of pay dispersion is due to worst individual performance, rather than a reduction of team cooperation.
    Keywords: Team productivity, Incentives, Pay dispersion.
    JEL: J31 J33 J44
    Date: 2012–02
  6. By: Frederiksen, Anders (Aarhus School of Business); Lange, Fabian (Yale University); Kriechel, Ben (ROA, Maastricht University)
    Abstract: Firms commonly use supervisor ratings to evaluate employees when objective performance measures are unavailable. Supervisor ratings are subjective and data containing supervisor ratings typically stem from individual firm level data sets. For both these reasons, doubts persist on how useful such data are for evaluating theories in personnel economics and whether findings from such data generalize to the labor force at large. In this paper, we examine personnel data from six large companies and establish how subjective ratings, interpreted as ordinal rankings of employees within narrowly defined peer-groups, correlate with objective career outcomes. We find many similarities across firms in how subjective ratings correlate with earnings, base pay, bonuses, promotions, demotions, separations, quits and dismissals and cautiously propose these as empirical regularities.
    Keywords: subjective performance ratings, personnel data, employee careers, career outcomes, incentives, employer learning
    JEL: M5
    Date: 2012–02
  7. By: Mikel Berdud (Departamento de Economía-UPNA); Juan M. Cabasés Hita (Departamento de Economía-UPNA)
    Abstract: This paper explores the conditions that characterize the optimality for a principal (health manager) to undertake investments to motivate agents (doctors). In the model, doctors are intrinsically motivated and can have different identities. We develop a principal agent dynamical model with moral hazard, which captures the possibility of affecting doctors’ intrinsic motivation and identity through contracts offered by the health manager. Identity and intrinsic motivation of the doctor can be undermined (crowding-out) or enhanced (crowding-in) by incentive policies and monetary rewards. When motivations beyond the money play a role in the agents behaviour, the optimality of the equilibrium outcomes may be altered. Intrinsic motivation is defined as doctor’s experienced enjoyment from doing her work and commit toward a mission. By “full” identity we mean a situation in which the doctor shares the organizational objectives and views herself as a part of the organization. We assume that “full” identity can be achieved when health managers include mission supportive investments in contracts. This also crowds in intrinsic motivation. However, crowding out occurs when the health manager uses only pure monetary rewards to incentivize doctors with the goal of drive their actions in his own interest. Solving the model, we are allowed to make comparative statics and discuss the conditions under which spending resources to invest in motivational capital, is optimal for the health organization’s manager. Our results may help to inform policy-makers about optimal policy design and optimal management of health organizations. For instance, we conclude that investing in motivational capital is more likely to be profitable in the long run whereas mere monetary incentives are more likely to be optimal in the short run.
    Keywords: contracts, moral hazard, intrinsic motivation, crowding effects, mission, motivational capital
    JEL: C32 E30
    Date: 2012
  8. By: FitzGerald, John
    Abstract: This paper considers the impact on growth and convergence in the EU over the last 20 years of investment in human capital. It examines the current adjustment of a range of economies to the external imbalances at the beginning of the current crisis. Finally it considers how the adjustments under way will contribute to a return to long-term growth.
    Keywords: growth/human capital/investment
    Date: 2012–01
  9. By: David, Gill; Rebecca, Stone
    Abstract: Teams are becoming increasingly important in work settings. We develop a framework to study the strategic implications of a meritocratic notion of desert under which team members care about receiving what they feel they deserve. Team members find it painful to receive less than their perceived entitlement, while receiving more may induce pleasure or pain depending on whether preferences exhibit desert elation or desert guilt. Our notion of desert generalizes distributional concern models to situations in which effort choices affect the distribution perceived to be fair; in particular, desert nests inequity aversion over money net of effort costs as a special case. When identical teammates share team output equally, desert guilt generates a continuum of symmetric equilibria. Equilibrium effort can lie above or below the level in the absence of desert, so desert guilt generates behavior consistent with both positive and negative reciprocity and may underpin social norms of cooperation.
    Keywords: Desert; Deservingness; Equity; Inequity aversion; Loss aversion; Reference-dependent preferences; Guilt; Reciprocity; Social norms; Team production
    JEL: D63 J33
    Date: 2012–02
  10. By: Mirta Díaz; Susana Pasamar; Ramón Valle (Department of Business Administration, Universidad Pablo de Olavide)
    Abstract: Organizational learning has become increasingly important for strategic renewal. Ambidextrous organizations are specially succesfull in current environment, where firms require efficiency and adaptation to changes. Organizational ambidexterity is still in the process of developing into a new research paradigm in organizational research. In this study, we discuss arguments about the ambidextrous character, we identify the intellectual capital characteristics that better support learning types, the HRM practices adequate for the components of intellectual capital, and if the organizational intellectual capital plays any mediating role in the relationship between HRM practices and organizational learning.
    Keywords: ambidextrous learning, organizational learning, intellectual capital, HRM practices
    Date: 2012–03
  11. By: Burks, Stephen V. (University of Minnesota, Morris); Guy, Frederick (Birkbeck College, University of London)
    Abstract: Using evidence from recent work on truckers and disaggregated older data prior researchers did not have, we revisit a classic topic and find some new answers. We focus on differentials in average annual earnings at the firm level among mileage-paid over-the-road tractor-trailer drivers ("road drivers") employed by US for-hire trucking companies, before and after economic deregulation. Road driver output is individualized, and pay is on the basis of a piece rate (mileage). However, road drivers work under two distinct logistical systems – less-than-truckload [LTL], and truckload [TL] – associated with two different forms of work organization. We find that – contrary to the predictions of Rose (1987) – not only are road drivers for LTL companies paid more than those for TL companies, but in LTL the union earnings premium was maintained following deregulation and union coverage fell slowly, while in TL both the union differential and union coverage fell sharply. We review relevant theoretical explanations: payment for cognitive abilities or non-pecuniary disamenities; standard efficiency wage models based on independent utilities; sharing of product market rents; equity concerns resulting from social comparisons between employee groups; and differences in work organization as a source of union rents or quasi-rents. Only equity concerns, for the LTL earnings differential, and quasi rents (but not a union threat effect, contrary to Henrickson and Wilson (2008)), for union coverage and premium in LTL, are consistent with our empirical results. Both earnings differentials are based on differences in work organization, rather than differences in the workers or the work itself.
    Keywords: fair wage, equity, compensating differential, cognitive ability, quasi-rent, rent-sharing, work organization, trucking, trucker, less-than-truckload (LTL), truckload (TL), regulation, deregulation, union premium
    JEL: J31 J42 L92
    Date: 2012–02

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