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on Human Capital and Human Resource Management |
| By: | Delfgaauw, Josse (Erasmus University Rotterdam); Dur, Robert (Erasmus University Rotterdam); Non, Arjan (ROA, Maastricht University); Verbeke, Willem (Erasmus University Rotterdam) |
| Abstract: | We conduct a field experiment among 189 stores of a retail chain to study dynamic incentive effects of relative performance pay. Employees in the randomly selected treatment stores could win a bonus by outperforming three comparable stores from the control group over the course of four weeks. Treatment stores received weekly feedback on relative performance. Control stores were kept unaware of their involvement, so that their performance generates exogenous variation in the relative performance of the treatment stores. As predicted by theory, we find that treatment stores that lag far behind do not respond to the incentives, while the responsiveness of treatment stores close to winning a bonus increases in relative performance. On average, the introduction of the relative performance pay scheme does not lead to higher performance. |
| Keywords: | dynamic incentives, relative performance pay, field experiment |
| JEL: | C93 M52 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7652&r=hrm |
| By: | Brian Bell; John Van Reenen |
| Abstract: | We provide new evidence on the growth in pay at the very top of the wage distribution in the UK. Sectoral decompositions show that workers in the financial sector have accounted for the majority of the gains at the top over the last decade. New results are also presented on the pay of CEOs in the UK. We show how improved measurement of pay points to a stronger pay-performance link than previously estimated. This link is stronger, and more symmetric, for those firms in which institutional investors play a larger role. |
| Keywords: | wage inequality, firm performance, CEO compensation, performance pay, management |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepops:34&r=hrm |
| By: | Andrzej, Klimczuk; Magdalena, Klimczuk-Kochańska |
| Abstract: | This paper presents the problem of workers lay off and loss along with their exit from the organization its key competencies - skills and knowledge. Importance of management of key competencies was described. The paper also presents outplacement as a way to maintain core competencies even during reducing the human resources within the enterprises. |
| Keywords: | competencies, downsizing, employment structure, human resources, intellectual capital, key competencies, outplacement, restructuring |
| JEL: | J21 J63 M14 O15 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:50706&r=hrm |
| By: | Kräkel, Matthias; Nieken, Petra |
| Abstract: | We analyze whether incentives from relative performance pay are reduced or enhanced if a department is possibly terminated due to a crisis. Our benchmark model shows that incentives decrease in a severe crisis, but are boosted given a minor crisis since efforts are strategic complements in the former case but strategic substitutes in the latter one. We tested our predictions in a laboratory experiment. The results confirm the effort ranking but show that in a severe crisis individuals deviate from equilibrium significantly stronger than in other situations. This behavior contradicts the benchmark model and leads to a five times higher survival probability of the department. We develop a new theoretical approach that may explain players’ behavior. |
| Keywords: | crisis; incentives; strategic complements; strategic substitutes; tournament |
| JEL: | C9 J3 J6 M5 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:425&r=hrm |
| By: | Luigi Guiso (EIEF and CEPR); Paola Sapienza (Northwestern University, NBER and CEPR); Luigi Zingales (University of Chicago, NBER and CEPR) |
| Abstract: | We study which dimensions of corporate culture are related to a firm’s performance and why. We find that proclaimed values appear irrelevant. Yet, when employees perceive top managers as trustworthy and ethical, firm’s performance is stronger. We then study how different governance structures impact the ability to sustain integrity as a corporate value. We find that publicly traded firms are less able to sustain it. Traditional measures of corporate governance do not seem to have much of an impact. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:eie:wpaper:1327&r=hrm |
| By: | Karine van der Beek (Ben-Gurion University of the Negev); Moshe Justman (Ben-Gurion University of the Negev) |
| Abstract: | We draw on quantitative and descriptive data from Robert Campbell's widely cited manual for prospective apprentices, The London Tradesman (1747), to demonstrate the responsiveness of apprenticeship in mid-eighteenth century London to market forces of supply and demand. We regress apprenticeship premiums on journeymen's wages, set up costs and a selection of employment conditions and requirements across 178 trades, and find a significant elasticity of 0.4 with respect to wages and 0.25 with respect to set-up costs. We interpret this as supporting an economic model that views premiums as bounded from above by the expected benefits of acquiring the skills of the trade (Lane, 1996); bounded from below by the expected net training costs to the master, taking into account the possibility of the apprentice terminating his service prematurely (Wallis, 2008); and reflecting the relative bargaining power of master and parent. This supports the thesis that apprenticeship played an important role in adapting the English workforce to the skill requirements of the Industrial Revolution. Moreover, by demonstrating the internal and external consistency of Campbell's observations, our findings support their further use as a unique, invaluable source of detailed, trade-specific wage data from the early years of the Industrial Revolution. |
| Keywords: | premium, wages, setting-up costs, human capital, industrial revolution, apprenticeship, Campbell, Eighteenth century England |
| JEL: | K31 N33 O15 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2013-14&r=hrm |
| By: | Marco Marini (Department of Computer, Control and Management Engineering, Università "La Sapienza" Roma); Paolo Polidori (Department of Law, University of Urbino “Carlo Bo”); Davide Ticchi (IMT Institute for Advanced Studies Lucca); Désirée Teobaldelli (Department of Law, University of Urbino “Carlo Bo”) |
| Abstract: | One of the standard predictions of the agency theory is that more incentives can be given to agents with lower risk aversion. In this paper we show that this relationship may be absent or reversed when the technology is endogenous and projects with a higher e¢ ciency are also riskier. Using a modi ed version of the Holmstrom and Milgroms (1987) framework, we obtain that lower agents risk aversion unambiguously leads to higher incentives when the technology function linking e¢ ciency and riskiness is elastic, while the risk aversion-incentive relation- ship can be positive when this function is rigid. |
| Keywords: | Principal-agent, Incentives, Risk aversion, Endogenous technolog |
| JEL: | D82 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:urb:wpaper:13_04&r=hrm |
| By: | Heywood, John S. (University of Wisconsin, Milwaukee); Siebert, W. Stanley (University of Birmingham); Wei, Xiangdong (Lingnan University) |
| Abstract: | This field experiment examines output quantity and quality for workers in a data input business. We observe two sets of workers that differ in monitoring intensity as they move from time to piece rates. The application of piece rates increases quantity, and we find that the resultant quality can be improved with sufficient monitoring. "Committed" workers also produce higher quantity and quality, showing the role of worker selection - which appears especially strong under time rates. Our results thus show how a firm can refine its worker selection and monitoring options together with the payment system to deliver its chosen quality-quantity combination. |
| Keywords: | piece rate, monitoring, shirking, quantity and quality trade off, field experiment, worker committment |
| JEL: | D2 J3 L2 M5 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7660&r=hrm |
| By: | Velden R.K.W. van der; Allen J.P.; Levels M. (GSBE) |
| Abstract: | In this paper we develop and test a new set of measures of skill mismatches, based on data on skill levels and skill use in the domains of literacy and numeracy from the PIAAC project. The measures we develop represent the extent of skill use relative to ones own skill level. We test the measures by examining their relation to a number of labour market outcomes. We subsequently examine how mismatches are distributed across and within a large number of countries, and use our results to reflect on possible causes and consequences of mismatches. We find that, in general, higher skill utilization is always beneficial in terms of productivity and job satisfaction, and that overutilization of skills therefore points more towards a fuller use of the available human capital, rather than to a serious skill shortage. We find an asymmetry in returns between literacy and numeracy skills although numeracy skill level appears to pay higher dividends than literacy skill level, shifts in skill utilization within skill levels have greater consequences for literacy than for numeracy. The distribution of mismatches across and within countries is broadly consistent with the expectation that skills will be used more fully under competitive market conditions with few institutional or organizational barriers. Finally, skill mismatches are only quite weakly related to educational mismatches, reflecting the heterogeneity in skill supply and demand that cross-cuts the dividing lines set by formally defined qualification levels and job titles. |
| Keywords: | Analysis of Education; Education and Economic Development; Labor Demand; Human Capital; Skills; Occupational Choice; Labor Productivity; |
| JEL: | I25 I21 J23 J24 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umagsb:2013061&r=hrm |
| By: | Levels M.; Velden R.K.W. van der; Levels M.; Allen J.P. (ROA) |
| Abstract: | In this paper we develop and test a new set of measures of skill mismatches, based on data on skill levels and skill use in the domains of literacy and numeracy from the PIAAC project. The measures we develop represent the extent of skill use relative to ones own skill level. We test the measures by examining their relation to a number of labour market outcomes. We subsequently examine how mismatches are distributed across and within a large number of countries, and use our results to reflect on possible causes and consequences of mismatches. We find that, in general, higher skill utilization is always beneficial in terms of productivity and job satisfaction, and that overutilization of skills therefore points more towards a fuller use of the available human capital, rather than to a serious skill shortage. We find an asymmetry in returns between literacy and numeracy skills although numeracy skill level appears to pay higher dividends than literacy skill level, shifts in skill utilization within skill levels have greater consequences for literacy than for numeracy. The distribution of mismatches across and within countries is broadly consistent with the expectation that skills will be used more fully under competitive market conditions with few institutional or organizational barriers. Finally, skill mismatches are only quite weakly related to educational mismatches, reflecting the heterogeneity in skill supply and demand that cross-cuts the dividing lines set by formally defined qualification levels and job titles. |
| Keywords: | Analysis of Education; Education and Economic Development; Labor Demand; Human Capital; Skills; Occupational Choice; Labor Productivity; |
| JEL: | I21 I25 J23 J24 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umaror:2013017&r=hrm |
| By: | Dornbusch, Friedrich; Neuhäusler, Peter |
| Abstract: | It is generally claimed that universities provide the scientific basis for future technological progress. Still, empirical evidence of the impact of direct links between universities and firms remains weak and is often at least inconsistent. This paper aims at contributing to the literature by analyzing how direct academic involvement affects the output of inventive activities of research teams in different organizational backgrounds. By applying a unique dataset of German academic and corporate patents, we find that boundary-spanning knowledge production with academic inventors raises the innovative performance of SMEs and MNEs. Furthermore, geographical proximity between team members is generally shown to be valuable for team performance in terms of the influence on future technological developments. At the same time, the results indicate that academic involvement helps inventor teams to profit from spatially distant knowledge sources. -- |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fisidp:37&r=hrm |
| By: | Borghans, Lex (Maastricht University); Golsteyn, Bart H.H. (Maastricht University); Stenberg, Anders (SOFI, Stockholm University) |
| Abstract: | This paper reports evidence that an individual meeting with a study counselor at high school significantly improves the quality of choice of tertiary educational field, as self-assessed 18 months after graduation from college. The results are strongest among males and those with low educated parents. To address endogeneity, we explore the variation in study counseling practices between schools. Tentative analyses also indicate that counselors reduce students' uncertainty about their own individual preferences at least to the same extent as uncertainty about objective measures such as employment prospects. |
| Keywords: | uncertainty, human capital, educational choice, study counseling |
| JEL: | I2 J24 J31 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7649&r=hrm |
| By: | Brian Bell; John Van Reenen |
| Abstract: | The pay of financial sector workers ("bankers") is a focus of public concern especially since the onset of the financial crisis. We document the remarkable rise in the share of aggregate pay going to those at the very top of the distribution over the last decade in the UK and highlight the role of the financial sector. Rising bonuses paid to bankers accounted for around two-thirds of the increase in the national wage bill ("earnings pie") taken by the top one percent of workers since 1999. Surprisingly, even after the crisis bankers took at least as large a share of the earnings pie in 2011 as they did at the peak of the boom in 2007 and saw no worsening in their employment outcomes relative to other similar workers. Having described the scale of bankers' pay, we discuss the policy responses that have been proposed to address the issue such as transparency, numerical bonus targets, bonus clawbacks and taxation. |
| Keywords: | wage inequality, financial services, bonuses |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepops:35&r=hrm |