nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2013‒02‒08
seven papers chosen by
Tommaso Reggiani
University of Cologne

  1. Bidimensional Screening with Intrinsically Motivated Workers By F. Barigozzi; N. Burani
  2. The importance of intrinsic and extrinsic motivation for measuring IQ By Bas ter Weel; Lex Borghans (Maastricht University)............ Huub Meijers (Maastricht University)
  3. Asking About Wages: Results from the Bank of Canada’s Wage Setting Survey of Canadian Companies By David Amirault; Paul Fenton; Thérèse Laflèche
  4. How taxes and welfare distort work incentives: static lifecycle and dynamic perspectives By Mike Brewer; Monica Costa Dias; Jonathan Shaw
  5. Employment Policies, Hiring Practices and Firm Performance By Sylvie Blasco; Barbara Pertold-Gebicka
  6. The upward spirals in team processes: Examining dynamic positivity in problem solving teams By Nale Lehmann-Willenbrock; Ming Ming Chiu; Zhike Lei; Simone Kauffeld
  7. Teacher evaluations and pupil achievement: Evidence from classroom observations By Marc van der Steeg; Sander Gerritsen

  1. By: F. Barigozzi; N. Burani
    Abstract: We study optimal contracts with bidimensional screening. A principal (a firm) needs to hire a worker to produce output. The worker has private information on her productive ability and on her intrinsic motivation, where intrinsic motivation is interpreted as the worker’s enjoyment of her personal contribution to the firm’s outcome or as a non-monetary benefit accruing to the worker when performing a certain task. We solve the discrete case with two ability levels and two degrees of motivation and completely characterize the optimal contracts. According to the magnitude of intrinsic motivation relative to ability, four different classes of fully participating and fully separating equilibria exist, which always dominate equilibria with some pooling and/or exclusion. We prove that truthful revelation is less distorsive when the difference in ability is higher than the difference in motivation, but the latter is sufficiently high.
    JEL: D82 D86 J31 M55
    Date: 2013–02
  2. By: Bas ter Weel; Lex Borghans (Maastricht University)............ Huub Meijers (Maastricht University)
    Abstract: This research provides an economic model of the way people behave during an IQ test. We distinguish a technology that describes how time investment improves performance from preferences that determine how much time people invest in each question. We disentangle these two elements empirically using data from a laboratory experiment. The main findings is that both intrinsic (questions that people like to work on) and extrinsic motivation (incentive payments) increase time investments and as a result performance. The presence of incentive payments seems to be more important than the size of the reward. Intrinsic and extrinsic motivation turn out to be complements.
    JEL: J20 J24
    Date: 2013–01
  3. By: David Amirault; Paul Fenton; Thérèse Laflèche
    Abstract: The Bank of Canada conducted a Wage Setting Survey with a sample of 200 private sector firms from mid-October 2007 to May 2008. Results indicate that wage adjustments for the Canadian non-union private workforce are overwhelmingly time dependent, with a fixed duration of one year, and are clustered in the first four months of the year, suggesting that wage stickiness may not be constant over the year. Ad hoc adjustments between these fixed dates are rare, but when they do occur they are almost always upward and often in response to tight labour markets. The market wage rate is the most important factor managers consider when setting wages for their employees. Depending on firm size, different strategies are used to gain information about the market wage. Other important factors taken into account when setting wages include the firm’s profitability, its difficulty in attracting staff and workers’ productivity. While many managers acknowledge a link between the wage decision and inflation, very few use formal wage indexation rules such as a cost-of-living adjustment. Rather, most describe an informal backward-looking link. Survey results also suggest that managers are very reluctant to cut nominal base wages in times of weak demand. Managers are more likely to cut incentive pay, which would allow some flexibility in total compensation even if base pay is inflexible, or reduce the quantity of labour inputs (hours and employees).
    Keywords: Labour markets; Transmission of monetary policy
    JEL: E24 J33 M52
    Date: 2013
  4. By: Mike Brewer (Institute for Fiscal Studies and ISER, Essex University); Monica Costa Dias (Institute for Fiscal Studies and Institute for Fiscal Studies); Jonathan Shaw (Institute for Fiscal Studies)
    Abstract: Personal taxes and benefits affect the incentive to work over the lifecycle by altering income-age profiles, insuring against adverse shocks, and changing the returns to human capital. Previous work investigating the impact of taxes and benefits on work incentives has tended to ignore these dynamic considerations. In this paper, we use a dynamic model to show how a lifecycle perspective alters our impression of the effect of the tax and benefit system on female work incentives. We describe how work incentives change over the life and show how they depend on lifecycle circumstances. We also devise a forward-looking measure of work incentives that incorporates all the dynamic considerations likely to affect work decisions at any given age. We find that individuals experience considerable variability in work incentives across life that outweighs the variability across individuals. Changes pattern of family types across life is key to explaining these patterns: work incentives vary dramatically depending on family composition, and most women experience a number of different family types during the course of their lives. We also find that differences in family type are an important explanation for why static and forwardlooking PTRs diverge, though this is more to do with differences in how women in families with different compositions behave.
    Keywords: female labour supply, lifecycle, work incentives, taxes
    JEL: H24 I24 I38 J22
    Date: 2013–01
  5. By: Sylvie Blasco (CREST); Barbara Pertold-Gebicka (Aarhus Université)
    Abstract: In this paper we investigate how active labour market policy programmes affect firms' hiring strategies and, eventually, firms' performance. We focus on counseling and monitoring which may reduce search costs for employers, but which may have ambiguous effect on the employer- employee matching quality and thus on firms' performance. Using a large scale experiment which was conducted in Denmark in 2005-2006 and induced a greater provision of activation, we find that small firms hiring in the districts where the social experiment was conducted changed their hiring practices in favor of unemployed workers and experienced greater turnover than the other firms. Treated firms also experienced no change or a marginal reduction in value added and total factor productivity during the first years after the experiment. These results are consistent with the idea that monitoring creates compulsion effects which counteract the possible improvement in the matching process expected from job search assistance.
    Keywords: active labour market programmes, counseling and monitoring,hiring decisions,firms performance
    JEL: C21 J63 J68
    Date: 2012–11
  6. By: Nale Lehmann-Willenbrock (VU University Amsterdam); Ming Ming Chiu (University at Buffalo – SUNY); Zhike Lei (ESMT European School of Management and Technology); Simone Kauffeld (Technische Universität Braunschweig)
    Abstract: Positivity in the workplace has been heralded to produce individual, social and organizational benefits. Although we know more about how positivity “broadens” and “builds” within individuals, little research has explicitly studied how positivity naturally occurs and dynamically unfolds in the flow of team interactions. This study aims to address this research gap by integrating existing knowledge on team processes with the notions of emotional cycles and “energy-in-conversation.” We observed meeting interactions of 43 frontline problem solving teams and analyzed a sample of 43,139 coded individual utterances from these teams. Using statistical discourse analysis (SDA) to model multi-level dynamics over time, we found that early positive and solution-focused interactions could send teams down a path of eliciting more “upward spirals”, thus more positivity. We also found that speaker switches added more positivity to team interactions both directly and by strengthening the positive effects of early positive and solution-focused interactions on subsequent positivity occurring in team interactions. Additionally and importantly, we found that overall positivity has positive implications for team performance. We discuss both theoretical and managerial implications of our findings.
    Keywords: dynamic positivity, team processes, team interactions, problem-solving, dynamic multi-level modeling, statistical discourse analysis
    Date: 2013–02–04
  7. By: Marc van der Steeg; Sander Gerritsen
    Abstract: This paper investigates the relationship between teacher evaluations, conducted by trained evaluators, and pupil performance in primary education in a large city in the Netherlands. Teacher evaluations are based on a detailed rubric containing 75 classroom practices considered to be crucial for effective teaching. We obtain a set of estimates that suggests that the score on this rubric significantly predicts pupil performance gains. Estimated test score gains are in the order of 0.4 standard deviations in math and grammar if a pupil is assigned to a teacher from the top quartile instead of the bottom quartile of the distribution of the evaluation rubric. These are relatively large differences in pupil outcomes, suggesting that evaluations based on the rubric measure teacher practices that matter for pupil performance. This suggests that the rubric seems to have potential for teacher evaluations and teacher effort.
    JEL: I2
    Date: 2013–01

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