nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2013‒12‒29
sixteen papers chosen by
Tommaso Reggiani
University of Cologne

  1. Hidden Benefits of Reward: A Field Experiment on Motivation and Monetary Incentives By Kvaløy, Ola; Nieken, Petra; Schöttner, Anja
  2. Corporate Sports Activity and Work Morale: Evidence from a Japanese Automobile Maker By Sasaki, Masaru; Ohtake, Fumio
  3. The Role of Managerial Work in Market Performance: A Monopoly Model with Team Production By Andreas Hildenbrand; Mihael Duran
  4. What Drives the Urban Wage Premium? Evidence along the Wage Distribution By Matano, Alessia; Naticchioni, Paolo
  5. Looking After Number Two? Competition, Cooperation and Workplace Interaction By Barmby, Tim; Sessions, John G.; Zangelidis, Alexandros
  6. Social Comparisons in Wage Delegation: Experimental Evidence By Charness, Gary; Cobo-Reyes, Ramón; Lacomba, Juan A.; Lagos, Francisco; Pérez, José María
  7. The Spillover Effects of Monitoring: A Field Experiment By Michèle Belot (University of Edinburgh) Marina Schröder (University of Magdeburg)
  8. Measuring the Gap between Wage and Productivity: Wage-Tenure Profile and Productivity-Tenure Profile Cross Twice By Kodama, Naomi; Odaki, Kazuhiko
  9. Work Characteristics and Work Performance of Knowledge Workers: What Goes Hand in Hand? By Tomislav Hernaus; Josip Mikulić
  10. A Note on Moral Hazard and Linear Compensation Schemes By Xiao Yu Wang
  11. Intrinsic motivation, effort and the call to public service By Banuri, Sheheryar; Keefer, Philip
  12. Human capital, social mobility and the skill premium By Konstantinos, Angelopoulos; James, Malley; Apostolis, Philippopoulos
  13. Return and risk of human capital contracts By Kroencke, Tim A.; Muehler, Grit; Sprietsma, Maresa
  14. ChinaÕs Human Resources Development: Recent Evolution and Implications for the Global Market By Andrea Pontiggia; Lala Hu; Marco Savorgnan
  15. STEM Graduates, Human Capital Externalities, and Wages in the U.S. By Winters, John V.
  16. 'The employees are all equal... but some are more equals than others'. Altruism, opportunism and discrimination in family SMEs By Ferrari, Filippo

  1. By: Kvaløy, Ola; Nieken, Petra; Schöttner, Anja
    Abstract: We conducted a field experiment in a controlled work environment to investigate the effect of motivational talk and its interaction with monetary incentives. We find that motivational talk significantly improves performance only when accompanied by performance pay. Moreover, performance pay slightly reduces performance unless it is accompanied by motivational talk. These effects also carry over to the quality of work. Performance pay alone leads to more mistakes. Adding motivational talk makes the difference. In treatments with performance pay, motivational talk increases output by about 20 percent and reduces the ratio of mistakes by more than 40 percent.
    Keywords: Verbal Motivation; Performance Pay; Field Experiment
    JEL: C93 M52 J33
    Date: 2013–12
  2. By: Sasaki, Masaru (Osaka University); Ohtake, Fumio (Osaka University)
    Abstract: This paper estimates the factors affecting the relationship between the wins and losses of corporate sports club teams and the work morale of employees, using an original survey of employees from a selected Japanese automobile maker. We find that corporate sports club teams' performance is an important factor influencing the work morale of older employees and employees who work with colleagues belonging to those teams in the same division. We can say statistically that the impacts of teams' wins and losses on changes in work morale of older employees at the individual level are symmetric; that is, the work morale of employees is significantly raised by own teams' wins but reduced by own teams' losses.
    Keywords: work morale, corporate sports, subjective well-being analysis, Japan
    JEL: L62 M52 M54
    Date: 2013–12
  3. By: Andreas Hildenbrand (University of Gießen); Mihael Duran (University of Tuebingen)
    Abstract: A monopolist is treated as a nexus of contracts with team production. It has one ownermanager. The owner-manager is the employer of two employees. A team production problem is present if the employer is a “managerial lemon”. If the team production problem is solved, the employer is a “managerial hotshot”. Both a managerial hotshot and a managerial lemon are found to make profit. Managerial slack can therefore exist in our monopoly market. In the case of a managerial lemon, the profit level is lower. However, the employees’ utility level is higher. Whereas the employer has an incentive to improve management capability in principle, the employees have an incentive to keep management capability low. Moreover, the cost of improving management capability may be prohibitively high. Managerial slack can therefore persist. The predicted behavior of the monopolist is grounded in individual behavior under the assumption of utility maximization.
    Keywords: firm organization, market structure, property rights
    JEL: C7 D2 D4 L1 L2
    Date: 2013
  4. By: Matano, Alessia (University of Barcelona); Naticchioni, Paolo (University of Rome 3)
    Abstract: This paper aims at disentangling the role played by different explanations on the urban wage premium along the wage distribution. We analyze the wage dynamics of migrants from lower to higher density areas in Italy, using quantile regressions and individual data. The results show that unskilled workers benefit more from a wage premium accruing over time, while skilled workers enjoy a wage premium when they migrate as well as a wage increase over time. Further, we find that for unskilled workers the wage growth over time is mainly due to human capital accumulation, consistently with the "learning" hypothesis, while for skilled workers it is the "coordination" hypothesis that matters.
    Keywords: urban wage premium, human capital, spatial sorting, wage distribution, quantile fixed effects
    JEL: J31 J61 R23
    Date: 2013–12
  5. By: Barmby, Tim (University of Aberdeen); Sessions, John G. (University of Bath); Zangelidis, Alexandros (University of Aberdeen)
    Abstract: We build a model of worker interdependence in which two workers can either compete or cooperate and compare performance under either scenario to that of a single worker working in isolation. We show that whilst competition unequivocally reduces performance, cooperation may raise or lower performance. Employing a unique data set in which workgroups are comprised of either one or two workers, we are able to test explicitly for the presence of cooperation. We find empirical support for cooperative behavior.
    Keywords: absence, worker interdependency
    JEL: J33 J41 J54
    Date: 2013–12
  6. By: Charness, Gary (University of California, Santa Barbara); Cobo-Reyes, Ramón (University of Essex); Lacomba, Juan A. (Universidad de Granada); Lagos, Francisco (Universidad de Granada); Pérez, José María (Universidad de Granada)
    Abstract: This article examines whether social comparisons have behavioral effects on workers' performance when a firm can choose workers' wages or let them choose their own. Firms can delegate the wage decision to neither, one or both workers in the firm. We vary the information workers receive, finding that social comparisons concerning both wages and decision rights affect workers' performance. Moreover, the relative effect of discrimination in relation to decision rights is larger than in relation to wage. We find these treatment effects with both stated effort and a real-effort task, suggesting that both approaches may yield similar results.
    Keywords: delegation, gift-exchange, experiment
    JEL: C91
    Date: 2013–12
  7. By: Michèle Belot (University of Edinburgh) Marina Schröder (University of Magdeburg)
    Abstract: We provide field experimental evidence of the effects of monitoring in a context where productivity is multi-dimensional and only one dimension is monitored and incentivised. We hire students to do a job for us. The job consists of identifying euro coins. We study the effects of monitoring and penalising mistakes on work quality, and evaluate spillovers on non-incentivised dimensions of productivity (punctuality and theft). We find that monitoring improves work quality only if incentives are large, but reduces punctuality substantially irrespectively of the size of incentives. Monitoring does not affect theft, with ten per cent of participants stealing overall. Our setting also allows us to disentangle between possible theoretical mechanisms driving the adverse effects of monitoring. Our findings are supportive of a reciprocity mechanism, whereby workers retaliate for being distrusted.
    Keywords: counterproductive behaviour, monitoring, experiment.
    JEL: C93 J24 J30 M42 M52
    Date: 2013–12–19
  8. By: Kodama, Naomi; Odaki, Kazuhiko
    Abstract: This paper proposes a new empirical method to measure the gap between wage and productivity of workers. Our method aggregates Mincer-type human capital function of all workers of a firm and obtains the total labor input. We put it into the Cobb-Douglas production function and estimate the coefficients of gap between wage and productivity. Applying the method to employer-employee matched panel data, we find that wagetenure profile and productivity-tenure profile intersect twice. The wage is higher than the productivity in junior years, then surpassed by the productivity in middle age, and becomes higher again in late career. The results are consistent with both of Becker's firm sponsored training model and Lazear's deferred compensation model.
    Keywords: Productivity, Human capital, Production function, Wage
    JEL: D24 J24 L23
    Date: 2013–12
  9. By: Tomislav Hernaus (Faculty of Economics and Business, University of Zagreb); Josip Mikulić (Faculty of Economics and Business, University of Zagreb)
    Abstract: The aim of the paper was to investigate the interplay among a wide range of work characteristics and knowledge workers’ performance outcomes. Specifically, we examined the nature of relationships between various task-, knowledge- and social characteristics of work design and both task and contextual performance. Using an adapted Work Design Questionnaire and applying PLS-SEM modelling technique, we analysed cross-sectional and cross-occupational sample of 512 Croatian knowledge workers from 48 organizations. Our findings confirmed the existence and importance of interaction between work characteristics and work outcomes. However, the results suggest that only knowledge characteristics of work design exhibit a significant effect on both distinct dimensions of work behaviour, while task and social characteristics showed different effects on task and contextual performance, respectively.
    Keywords: work design, work characteristics, task performance, contextual performance, PLS-SEM
    JEL: M12 M50 J81
    Date: 2013–12–23
  10. By: Xiao Yu Wang
    Abstract: This note identifies a moral hazard environment in which a piecewise linear compensation scheme is optimal. Both the principal and the agent have CARA utility, mean output is increasing in the agent's non-contractible input, and output is distributed according to a Laplace distribution, which resembles a normal distribution (e.g. it is symmetric about the mean), but has fatter tails. The key property of the Laplace distribution is that the likelihood ratio is a piecewise constant, where the discontinuity occurs at the mean. The value of this approach is twofold: First, a tractable, empirically-observed wage scheme emerges as the equilibrium in a simple static contracting model. Second, the optimal piecewise linear scheme cleanly separates insurance and incentive provision. The linearity at output levels away from the mean captures insurance, while the jump at the mean captures incentive provision. Hence, this model is well-suited for studying a wide variety of principal-agent problems in risky environments subject to moral hazard, such as the effect of risk and moral hazard considerations on employment relationships in developing economies.
    Keywords: principal agent problems, moral hazard, linear incentive schemes, insurance, incentives
    JEL: C70 D86 O12
    Date: 2013
  11. By: Banuri, Sheheryar; Keefer, Philip
    Abstract: Pay schemes in the public sector aim to attract motivated, high-ability applicants. A nascent literature has found positive effects of higher pay on ability and no or slightly positive effects on motivation. This paper revisits this issue with a novel subject pool, students destined for the private and public sectors in Indonesia. The analysis uses dictator games and real effort tasks to examine wage effects on a measure of motivation that exactly matches the mission of the public sector task. The model and experimental design allow for precisely measuring (1) the distribution of ability over the effort task; (2) the distribution of motivational preferences for public sector missions; and (3) outside options when choosing to work for public sector missions. Three novel conclusions emerge. First, more pro-social workers do, in fact, exert higher effort in a pro-social task. Second, in contrast to previous research, motivated individuals are more likely to join the public sector when public sector pay is low than when it is high. Third, real public sector workers exhibit greater pro-sociality than private sector workers, even for entrants into the Indonesian Ministry of Finance.
    Keywords: Public Sector Economics,Public Sector Management and Reform,Educational Sciences,Intergovernmental Fiscal Relations and Local Finance Management,Economic Stabilization
    Date: 2013–12–01
  12. By: Konstantinos, Angelopoulos; James, Malley; Apostolis, Philippopoulos
    Abstract: This paper develops a dynamic general equilibrium model to highlight the role of human capital accumulation of agents differentiated by skill type in the joint determination of social mobility and the skill premium. We first show that our model captures the empirical co-movement of the skill premium, the relative supply of skilled to unskilled workers and aggregate output in the U.S. data from 1970-2000. We next show that endogenous social mobility and human capital accumulation are key channels through which the effects of capital tax cuts and increases in public spending on both pre- and post-college education are transmitted. In particular, social mobility creates additional incentives for the agents which enhance the beneficial effects of policy reforms. Moreover, the dynamics of human capital accumulation imply that, post reform, the skill premium is higher in the short- to medium-run than in the long-run.
    Keywords: social mobility, skill premium, tax and education policy,
    Date: 2013
  13. By: Kroencke, Tim A.; Muehler, Grit; Sprietsma, Maresa
    Abstract: Human capital contracts give private investors the right to share of students' future earnings in return for a financial contribution during their studies. Although still rarely used, human capital contracts could not only help to completement limited public funding for higher education but might also be an alternative to traditional financial assets. Using a dataset covering 1% of German households for the period 1995-2009, we analyse the return and risk properties that can be expected from human capital contracts. We find that funds of human capital contracts provide low risk exposures to stocks and bonds. As a result, risk-adjusted returns of funds of human capital contracts are signicantly positive under fairly weak conditions. Thus, human capital contracts potentially offer large diversification benefits for investors and might be a way to improve the state's educational budget --
    Keywords: human capital returns,human capital contracts,risk and return of non-traded assets,mean-variance spanning tests
    JEL: I21 J24 G11 G12
    Date: 2013
  14. By: Andrea Pontiggia (Dept. of Management, Università Ca' Foscari Venice); Lala Hu (Dept. of Management, Università Ca' Foscari Venice); Marco Savorgnan (Polins Center for Innovation Studies)
    Abstract: Our purpose in this article is to develop a framework for studying organizational arrangements used by Chinese Global firms in allocating work and managing human resources in the international context. Our framework based on human capital theory, transaction cost economics, and resource-based view of the firm investigate four factors: institutional, demographic, legislative, and educational changes in China, drawing some of the main challenges in Human Resources Management (HRM) for both Chinese and foreign firms. The paper contains a brief review of literature concerning the role of human capital in economic growth, then it focuses on the recent evolution of the Chinese labor market, and finally, it draws some implications for human capital management in China from global point of view. Our general framework contribute: first, to the formulation of research hypothesis of convergence (or divergence) of HRM practices in global markets, second, it emphasizes the relationship between the institutional and country's specificities of labor market and the HRM, and last it shows some effects of institutional policies and reforms on the quality and the availability of human capital China. These three points seem to support a broad idea of competitiveness based on labor market efficiency and how the internationalization strategies depend on the sources of human capital.
    Keywords: Chinese Labor Market; Labor Market Regulations and Laws; Human Resources Management Strategies; Human Capital Development and Leverage.
    JEL: J24 J41 J82 L22 M12 M54
    Date: 2013–12
  15. By: Winters, John V. (Oklahoma State University)
    Abstract: Previous research suggests that the local stock of human capital creates positive externalities within local labor markets and plays an important role in regional economic development. However, there is still considerable uncertainty over what types of human capital are most important. Both national and local policymakers in the U.S. have called for efforts to increase the stock of college graduates in science, technology, engineering, and mathematics (STEM) fields, but data availability has thus far prevented researchers from directly connecting STEM education to human capital externalities. This paper uses the 2009-2011 American Community Survey to examine the external effects of college graduates in STEM and non-STEM fields on the wages of other workers in the same metropolitan area. I find that both types of college graduates create positive wage externalities, but STEM graduates create much larger externalities.
    Keywords: human capital externalities, STEM, wage growth, agglomeration
    JEL: J24 R23
    Date: 2013–12
  16. By: Ferrari, Filippo
    Abstract: This article provides empirical evidence to support the Agency Theory as applied to small and medium-sized family firms. The research, conducted on a sample of SMEs (N = 88), has investigated the main elements of the Agency Theory ( type of contract, agent autonomy, mechanisms of resource distribution, the match between job assignment and worker skills, the overall level of perceived organizational justice), using a qualitative method. The literature suggests that altruism of the Principal as a parent and widespread opportunistic behavior by the Agent are confirmed phenomena typical of family SMEs. In addition, the research highlights the implications in terms of agency costs and perceived organizational justice on the part of employees who are not members of the family
    Keywords: Family Business; Agency Theory; Organizational justice; Opportunistic Behavior.
    JEL: M1 M12
    Date: 2013–12–20

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