nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2013‒12‒20
nine papers chosen by
Tommaso Reggiani
University of Cologne

  1. Reference Points, Performance and Ability: A Real Effort Experiment on Framed Incentive Schemes By Katharina Hilken; Stephanie Rosenkranz; Kris De Jaegher; Marc Jegers
  2. Human resource management: how much do firms really need? By Alex Bryson; Michael White
  3. Managing the Family Firm: Evidence from CEOs at Work By Oriana Bandiera; Andrea Prat; Raffaella Sadun
  4. The Costs of Recruiting Apprentices: Evidence from German Firm-Level Data By Samuel Muehlemann; Harald Pfeifer; Felix Wenzelmann
  5. How selective are real wage cuts? A micro-analysis using linked employer-employee data By Hirsch, Boris; Zwick, Thomas
  6. Education policy, student migration, and brain gain By Haupt, Alexander; Krieger, Tim; Lange, Thomas
  7. Make or buy? Human capital accumulation strategies in European club football By Yusuf Emre Akgunduz; Marcel van den Berg
  8. Temporary Workers Are Not Free-Riders: An Experimental Investigation By D. Dragone; F. Galeotti; R. Orsini
  9. Has job polarisation squeezed the American middle class? By Michael Boehm

  1. By: Katharina Hilken; Stephanie Rosenkranz; Kris De Jaegher; Marc Jegers
    Abstract: The paper investigates the effect of four differently framed payment contracts on the agent's effort provision and performance in a real effort experiment. The four incentive payments are framed as a base wage and bonuses (one immediately pays bonuses, the other only after an initial performance-independent part), penalties or a combination of bonuses and penalties. The base wage that is offered, induces the reference point. The participants provide real effort and are paid for finding pairs in a customized Memory game. The bonus-only frame elicits the highest effort, whereas frames with penalties lag behind. Ability positively complements the effect of effort on performance. The combination of penalties and bonuses minimises the costs of the principal only for low levels of performance employing heterogeneous agents. For higher performance levels, framing a base wage with bonuses is cost-effective.
    Keywords: Real Effort Experiment, Optimal Payment Scheme, Principal-Agent Relationship, Ability, Bonus, Penalty
    JEL: M52 J33 C91
    Date: 2013–11
  2. By: Alex Bryson; Michael White
    Abstract: More complete systems of human resource management (HRM) could deliver really extensive gains in employee motivation, according to an analysis of representative data from British workplaces by Michael White and Alex Bryson. Their research explores whether the introduction of 'high-performance work systems' really make a difference to business performance and whether it is possible for firms to have 'too little' or 'too much' HRM. They find that workplace attitudes become steeply and progressively more positive once a threshold of HRM practices has been reached. But in terms of employee attitudes, it might be better to have no HRM than just a little. At present, a half of British workplaces are experiencing slightly depressed employee attitudes.
    Keywords: Human resource management, high performance, organizational commitment
    JEL: J28 L23 M12 M54
    Date: 2013–12
  3. By: Oriana Bandiera; Andrea Prat; Raffaella Sadun
    Abstract: CEOs affect the performance of the firms they manage, and family CEOs seem to weaken it. Yet little is known about what top executives actually do, and whether it differs by firm ownership. We study CEOs in the Indian manufacturing sector, where family ownership is widespread and the productivity dispersion across firms is substantial. Time use analysis of 356 CEOs of listed firms yields three sets of findings. First, there is substantial variation in the number of hours CEOs devote to work activities, and longer working hours are associated with higher firm productivity, growth, profitability and CEO pay. Second, family CEOs record 8% fewer working hours relative to professional CEOs. The difference in hours worked is more pronounced in low-competition environments and does not seem to be explained by measurement error. Third, difference in differences estimates with respect to the cost of effort, due to weather shocks and popular sport events, reveal that the observed difference between family and professional CEOs is consistent with heterogeneous preferences for work versus leisure. Evidence from six other countries reveals similar findings in economies at different stages of development.
    Keywords: CEO, Time, Family firms, Competition, Productivity
    JEL: M12 L2 D24
    Date: 2013–12
  4. By: Samuel Muehlemann (University of Bern & IZA Bonn); Harald Pfeifer (Federal Institute for Vocational Education and Training (BIBB) Bonn & Research Centre for Education and the Labour Market (ROA) Maastricht); Felix Wenzelmann (Federal Institute for Vocational Education and Training (BIBB) Bonn)
    Abstract: In this paper, we use firm-level data to analyse a firmÕs costs of recruiting apprentices in Germany. We find that recruitment costs amount on average to 600 Euros per hire (approximately one month of apprentice pay), but costs are heterogenous across firms and vary strongly with the training occupation. Our results suggest that shortages in the local supply of apprentices and a high degree of competition among training firms in the region increase recruitment costs. Furthermore, we find that firms with a works council or an investment-oriented training strategy incur higher recruitment costs. Finally, marginal recruitment costs first increase but eventually decrease for firms hiring a large number of apprentices. Our results are important in light of the increasing firm competition for talented school leavers induced by demographic change.
    Keywords: Recruitment costs, apprenticeship training, human capital investment, local labour markets, local training markets, demographic change
    JEL: J24 J32 J63 M53
    Date: 2013–12
  5. By: Hirsch, Boris; Zwick, Thomas
    Abstract: Using linked employer-employee panel data for Germany, this paper investigates whether firms implement real wage reductions in a selective manner. In line with insider-outsider and several strands of efficiency wage theory, we find strong evidence for selective wage cuts with high-productivity workers being spared even when controlling for permanent differences in firms' wage policies. In contrast to some recent contributions stressing fairness considerations, we also find that wage cuts increase wage dispersion among peers rather than narrowing it. Notably, the same selectivity pattern shows up when restricting our analysis to firms covered by collective agreements or having a works council. -- Unter Verwendung verknüpfter Arbeitgeber-Arbeitnehmer-Paneldaten für Deutschland untersucht diese Studie, ob Reallohnkürzungen selektiv vorgenommen werden. Im Einklang mit der Insider-Outsider-Theorie und mehreren Varianten der Effizienzlohntheorie finden wir deutliche Hinweise auf selektive Lohnreduktionen zugunsten hochproduktiver Arbeitnehmer, selbst wenn für unbeobachtete permanente Unterschiede in den Lohnpolitiken der Firmen kontrolliert wird. Im Widerspruch zu jüngeren Arbeiten, die Fairnessüberlegungen ins Zentrum stellen, finden wir zudem, dass selektive Lohnkürzungen die Lohndispersion innerhalb von Peergruppen erhöhen. Bemerkenswerterweise zeigen sich die gleichen Selektivitätsmuster auch für die Subgruppen tarifgebundener Firmen und solcher mit einem Betriebsrat.
    Keywords: real wage rigidity,real wage cuts,selectivity,Germany
    JEL: J30 J31
    Date: 2013
  6. By: Haupt, Alexander; Krieger, Tim; Lange, Thomas
    Abstract: In this paper, we analyse how increasing student migration from a less developed to a developed country alters education policy in the developed country, and how it affects human capital and welfare in the two countries. We argue that a higher permanent migration probability, i.e., a higher probability that international students continue to stay in their host country after graduation, incentivises the host country to improve its education quality. A higher education quality in turn raises the human capital of all students, including returning students. As long as the permanent migration probability is not too large, this positive quality effect increases human capital and welfare in both the less developed country (LDC) and the developed host country. Thus, a brain gain to the LDC occurs. A decline in the taxes on labour income in the two countries can reinforce this brain gain, although the developed country then raises the tuition fees. --
    Keywords: brain gain,education,human capital,mobility,return migration
    JEL: F22 I28 H52
    Date: 2013
  7. By: Yusuf Emre Akgunduz; Marcel van den Berg
    Abstract: When it comes to discussing club football emotions tend to get heated quite easily across the globe. This heterogeneity in likes and dislikes is not only reflected in name or financial possibilities, but also in the clubs approach to building a team. We analyze whether clubs' strategies regarding buying or cultivating players have a discernable effect on their success on the pitch. For the analysis we employ match level data covering five seasons of play in top-flight Dutch and English club football leagues. The results suggest that players' tenure has a positive and significant effect on the probability of winning, but only in the English Premier League. The positive effect we find for the Premier League aligns with theories of firm specific human capital. We hypothesize the lack of significant effects in the Dutch league to be tied to clubs' inability to keep successful players with the club or buy replacements of equal quality on the transfer market, because the club-specific human capital component takes time to accumulate.
    Keywords: Football, human capital, tenure, winning probability
    JEL: D22 J24 L83
    Date: 2013–12
  8. By: D. Dragone; F. Galeotti; R. Orsini
    Abstract: We conduct an artefactual field experiment to study whether the individual preferences and propensity to cooperate of temporary workers differ from permanent contract workers. We find that temporary and permanent contract workers have different other-regarding preferences, but display similar contribution patterns in an anonymous Public Good Game. Students, instead, are more selfish and contribute less than temporary and permanent workers.
    JEL: C72 C93 D23 H41 J54
    Date: 2013–12
  9. By: Michael Boehm
    Abstract: Job polarisation has had strong effects on US workers' relative wages, according to research by Michael Boehm. His study examines whether the decline in manufacturing and clerical jobs has been responsible for the lagging wages of middle-skill workers in the United States. Comparing the occupational choices and earnings of survey respondents in the 1980s and today, he shows that labour market returns to middle-skill jobs have declined relative to high- and low-skill jobs.
    Keywords: Job polarization, wage inequality, talent allocation, Roy model
    JEL: J21 J23 J24 J31
    Date: 2013–12

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