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on Human Capital and Human Resource Management |
| By: | Carpenter, Jeffrey P. (Middlebury College); Dolifka, David (Middlebury College) |
| Abstract: | Empirical studies of the principal-agent relationship find that extrinsic incentives work in many instances, linking rewards to performance increases effort, but that they can also backfire, reducing effort. Intrinsic motivation, the internal drive to work to master a skill or to improve one's self image, is thought to be the key to whether incentives work or not. If the incentives crowd-out intrinsic motivation, and the effect is large enough, the net motivational effect on effort will be negative. We posit that an aversion to being exploited, i.e. being used instrumentally for the benefit of another, is one facet of intrinsic motivation, triggered by the combination of high-powered incentives and egoistic principal intent, that can cause incentives to fail. Using an experiment that provides the material circumstances necessary for exploitation to occur, we find that agent compliance is significantly lower for exploitative principals who use high-powered incentives and have a financial interest to do so, compared to neutral principals who use the same contracts but do not benefit from them. To corroborate our interpretation of the results we show that a surveyed "exploitation aversion" scale moderates this effect. Exploitation averse participants are less likely to comply with the incentives than exploitation tolerant participants when the principal signals an exploitative intent, but they are no less likely to comply with the same incentives when the principal is neutral. Our results have implications for the design and implementation of incentive structures within organizations. |
| Keywords: | financial incentives, intrinsic motivation, crowding, exploitation, experiment |
| JEL: | C92 J33 M52 M55 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7499&r=hrm |
| By: | David Gill; Victoria Prowse; Michael Vlassopoulos |
| Abstract: | We use an online real-effort experiment to investigate how bonus-based pay and worker productivity interact with workplace cheating. Firms often use bonus-based compensation plans, such as group bonuses and firm-wide profit sharing, that induce considerable uncertainty in how much workers are paid. Exposing workers to a compensation scheme based on random bonuses makes them cheat more but has no effect on their productivity. We also find that more productive workers behave more dishonestly. These results are consistent with workers' cheating behavior responding to the perceived fairness of their employer's compensation scheme. |
| Keywords: | Bonus, compensation, cheating dishonesty, lying, employee crime, productivity, slider task, real effort, experiment |
| JEL: | C91 J33 |
| Date: | 2013–07–08 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:666&r=hrm |
| By: | Barnett, Richard (Department of Economics & International Business LeBow College of Business Drexel University); Bhattacharya, Joydeep (Department of Economics Iowa State University); Puhakka, Mikko (Department of Economics University of Oulu) |
| Abstract: | Evidence supports the notion that those who grow up to be patient do better than those who do not. Parents can inculcate the virtue of delayed gratification in their children by taking the right actions. We study a model in which parents, for selfish reasons, invest resources to raise patient children. In the model, patience raises the marginal return to human capital acquisition giving the patient young an incentive to spend more on their own education at the expense of investment in their own progeny’s patience. This dynamic generates intergenerational patience cycles. |
| Keywords: | patience; delayed gratification; preference transmission; human capital |
| JEL: | E20 J24 |
| Date: | 2012–08–24 |
| URL: | http://d.repec.org/n?u=RePEc:ris:drxlwp:2012_007&r=hrm |
| By: | John Bone; Paolo Crosetto; John D Hey; Carmen Pasca |
| Abstract: | This paper reports an experiment designed to elicit social preferences over income compensation schemes, where income differences between subjects have two independent components: one due to chosen effort and the other due to random chance. These differences can be compensated through social dividends, according to principles chosen beforehand by subjects themselves from behind a stylised Rawlsian veil of ignorance, or outside the society on which the principles will be implemented. We test the attractiveness in particular of Luck Egalitarianism, compensating inequalities due to chance but not those due to choice. We find modest but not overwhelming support for these principles, suggesting that subjects’actual preferences are more complex. |
| Keywords: | chance, choice, envy-freeness, fairness, luck, luck egalitarianism, responsibility |
| JEL: | D31 D63 C91 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:13/15&r=hrm |
| By: | Sorger, Gerhard; Stark, Oded; Wang, Yong |
| Abstract: | This paper studies the growth dynamics of a developing country under migration. Assuming that human capital formation is subject to a strong enough, positive intertemporal externality, the prospect of migration will increase growth in the home country in the long run. If the external effect is less strong, there exists at least a level effect on the stock of human capital in the home country. In either case, the home country experiences a welfare gain, provided that migration is sufficiently restrictive. These results, obtained in a dynamic general equilibrium setting, extend and strengthen the results of Stark and Wang (2002) obtained in the context of a static model. -- |
| Keywords: | Overlapping-generations growth model,Intertemporal human capital externalities,Long-run growth effect of the prospect of migration |
| JEL: | F22 I30 J24 J61 O15 O40 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tuewef:58&r=hrm |
| By: | Cuñat, Vicente; Gine, Mireia; Guadalupe, Maria |
| Abstract: | This paper estimates the effects of Say-on-Pay (SoP); a policy that increases shareholder "voice" by providing shareholders with a regular vote on executive pay. We apply a regression discontinuity design to the votes on shareholder-sponsored SoP proposals. Adopting SoP leads to large increases in market value (4.6%) and to improvements in long-term performance: profitability and labor productivity increase, while overheads and investment fall. In contrast, we find limited effects on pay levels and structure. This suggests that SoP operates as a regular vote of confidence, increasing efficiency and market value. |
| Keywords: | Say-on-Pay;Shareholder Voice; Executive Compensation; Firm Performance; Governance |
| JEL: | G34 L20 M12 |
| Date: | 2013–07–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:48489&r=hrm |
| By: | John Thanassoulis |
| Abstract: | This paper analyses the real economy effects of firms having some shareholders with a short investment horizon on their shareholder register. Short-term shareholders cause management to be concerned with the path of the share price as well as its ultimate value. Such shareholders in an economy lead to bubbles in the prices of key inputs, to the misallocation of firms to risky business models, and to increased costs of capital. For individual firms short-term shareholders induce the Board to reduce deferred incentives in CEO pay prompting CEO myopia and reduced investments in the long-run capabilities of the firm. |
| Keywords: | Investor time-horrizons, bubbles, CEO compensation, cost of capital, short-termism, bonuses, shareholder register |
| JEL: | G12 G34 L21 L25 |
| Date: | 2013–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:663&r=hrm |
| By: | Muntean, Mihaela; Cabau, Liviu Gabiel |
| Abstract: | With respect to the project management framework, a project live cycle consists of phases like: initiation, planning, execution, monitoring & control and closing. Monitoring implies measuring the progress and performance of the project during its execution and communicating the status. Actual performance is compared with the planned one. Therefore, a minimal set of key performance indicators will be proposed. Monitoring the schedule progress, the project budget and the scope will be possible. Within a Business Intelligence initiative, monitoring is possible by attaching the key performance indicators to the OLAP cube. In turn, the cube was deployed over a proper data warehouse schema. |
| Keywords: | project management, business intelligence, key performance indicators |
| JEL: | L21 M0 |
| Date: | 2013–03–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:48484&r=hrm |
| By: | Berulava, George |
| Abstract: | The purpose of this paper is to analyze the impact of trust-based relations on firm’s performance in transition economies. The trade credit variable is used as a proxy of trust-based relations and the propensity score matching method is employed to establish casual link between relational governance and business performance in the study. The research is conducted using data from a large survey of firms across 28 transition economies. The results of the study suggest that informal trust-based institutions of contract governance represent an important way for enhancing of business performance. To say distinctly, our findings indicate that in transition economies trade credits positively affect firms’ sales growth. They provide incentives for more intensive innovation activities and ensure higher labor productivity rates. The firms that trust their partners are characterized by larger proportions of reinvested profits as well. The main contribution of this paper is that it provides new empirical insights into the casual link between trust-based relations and business performance of firms in transition economies. |
| Keywords: | Keywords: trust-based relations, trade credit, networks, propensity score matching, business performance, transition economies |
| JEL: | D23 L14 P31 Z13 |
| Date: | 2013–07–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:48430&r=hrm |
| By: | Arlen Guarín; Carlos Medina; Jorge Andrés Tamayo |
| Abstract: | Based on individual data on the population of those arrested in Medellín, we assess whether the change in punishment at age 18, mandated by law, has a deterrent effect on arrests. No deterrent effect was found on index, violent or property crimes, but a deterrence effect was found on non-index crimes, specifically those related to drug consumption and trafficking. This implies an elasticity of arrests with respect to punishment that varies between -1.0 and -6.7 percent. The number of days that arrested individuals take to recidivate is 300, higher for index crimes if they are arrested right after, rather than before, reaching 18 years of age, in which case they are less likely to recidivate in any type of crime. The change in criminal penalties at 18 years of age does not explain future differences in human capital formation among the population that had been arrested immediately after versus immediately before reaching 18 years of age. There is no evidence that the longer length of time to recidivate on the part of individuals arrested for the first time immediately after reaching 18 implies future differences in human capital formation. This suggest that our estimated incapacitation effect would not be explained by the impossibility of the arrested population to recidivate due to their having been imprisoned, but rather by a specific deterrence effect resulting from the harsher experience while in prison of those arrested right after, rather than before, reaching 18. |
| Keywords: | Crime, Deterrence, Regression Discontinuity. Classification JEL: K42, H56, C21 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:bdr:borrec:774&r=hrm |
| By: | Grau, Corinna; Moormann, Jürgen |
| Abstract: | Managing the business processes of a company is a task which has emerged as a top priority across all industries. However, business process management (BPM) is not just a set of structured methods and technologies which can simply be assigned to employees. In contrary, the success of any process initiative is interwoven with the culture of the respective company. In addition, in most cases there is not only one organizational culture but often a range of subcultures within an organization due to previous mergers, existing subsidiaries etc. Despite its importance, the interrelation between BPM and organizational culture has been only sparsely explored. This paper analyzes and determines the status quo of academic literature concerning the interrelation between BPM and organizational culture. The results reveal considerable differences in the perception of the interface between both fields. Furthermore, our analysis shows that the organizational psychological perspective has been widely neglected in process management literature. To the best of our knowledge, this is the first literature review written from both a process management and an organizational psychological perspective. As such, it strives to contribute to a comprehensive and thorough understanding of this interrelation. Based on the review we develop a framework, serving as a basis for a deeper understanding of the interdependency and providing avenues for future research. -- |
| Keywords: | Business Process Management (BPM),Organization,Organizational culture,Organizational psychology,Process |
| JEL: | L20 M10 M14 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fsfmwp:200&r=hrm |
| By: | Suhaeniti (International University of University); Sangyub Ryu (International University of University) |
| Abstract: | By applying Moore (1995) concept of distinctive managerial functions - managing upward, downward, and outward -, this study attempts to understand the impacts of middle-level management functions on organizational performance; and tries to investigate gender impacts on the middle-level management and performance linkages. This study employs Indonesian Family Life Survey 4 (IFLS4) crosssectional data and applies Weighted Least Squares (WLS) method to analyze some hypotheses constructed. The results indicate the significant impacts of managing downward negatively and managing outward positively on organization performance. Meanwhile, managing upward does not give the significant impact on organization performance. On the other hand, gendered managing outward effects on organization performance are strongly positive significant for female managers and strongly negative significant for males. For both male and female managers, managing downward gives significant positive impacts on organization performance, but males' effect is much greater than females. Lastly, the gendered managing upward effect is not significant related with organization performance. Therefore, it can be concluded that public managers need to give more efforts on managing outward by creating more networking to increase the organization performance. In contrast, the principals may need to modify their strategy to manage their subordinates because current managing downward strategy gives negative impacts on the organization performance. |
| Keywords: | managing upward, managing downward, managing outward, management, gender, performance, school, Indonesia |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:iuj:wpaper:ems_2013_08&r=hrm |