nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2014‒01‒17
six papers chosen by
Tommaso Reggiani
University of Cologne

  1. Examining the Tradeoff between Fixed Pay and Performance-related Pay: A Choice Experiment Approach By Junyi Shen; Kazuhito Ogawa; Hiromasa Takahashi
  2. Private versus Public Feedback - The Incentive Effects of Symbolic Awards By Leonie Gerhards; Neele Siemer
  3. De controller als choice architect By Maas, V.S.
  4. Attitude Change in Arbitrarily Large Organizations By Luis Almeida Costa; Joao Amaro de Matos
  5. Shedding Some Light on the Dark Matter of Competition: Insights from the Strategic Management and Organizational Science Literature for the Consideration of Diversity Aspects in Merger Review By Benjamin Kern; Malte Ackermann
  6. Labor Force Transitions at Older Ages: The Roles of Work Environment and Personality By Marco Angrisani; Michael D. Hurd; Erik Meijer; Andrew M. Parker; Susann Rohwedder

  1. By: Junyi Shen (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan); Kazuhito Ogawa (Faculty of Sociology, Kansai University); Hiromasa Takahashi (Faculty of International Studies, Hiroshima City University)
    Abstract: Previous investigations on performance-related pay have mainly analyzed its relationships with earnings, productivity, and job satisfaction. Less attention has been devoted to the investigations of individuals’ preferences for the performance-related payment system per se and consequently the tradeoff between fixed pay and performance-related pay. In this paper, we first use a choice experiment approach to investigate the tradeoff between fixed pay and performance-related pay, and then link the tradeoff for each individual with their risk preferences. Our main results indicate that individuals’ preferences for the payment system per se and the magnitude of tradeoffs between fixed pay and performance pay are different according to their risk preferences.
    Keywords: fixed pay; performance-related pay; choice experiment; risk preference
    JEL: C35 J33
    Date: 2014–01
  2. By: Leonie Gerhards (Department of Economics and Business, Aarhus University, Denmark); Neele Siemer (Goethe-University Frankfurt)
    Abstract: We experimentally compare the incentive effects of rewarding individuals for outstanding performance publicly versus privately. We implement two real-effort tasks, which differ in how prestigious subjects perceive working on them. In both tasks private and public feedback similarly enhances subjects' performance compared to the control treatment. Also high ability and a positive interim feedback increase performance. Competitive preferences matter only in the less prestigious task. Subjects' gender and overconfidence can in neither of the tasks explain performance. In a supplementary field experiment at a secondary school we furthermore compare the incentive effects of different forms of public recognition.
    Keywords: Private feedback, public feedback, relative performance, competitive preferences, laboratory experiment, field experiment
    JEL: C91 C93 D03 J33 M12
    Date: 2014–01–10
  3. By: Maas, V.S.
    Abstract: Management accountants are choice architects: they provide information that is used in managerial decision making and they have considerable influence on the monetary and non-monetary incentives that drive managers’ decision-making processes. Over the past two decades, our know - ledge of how people make economic decisions has increased tremendously. However, this has had only very little impact on the design of management accounting and control systems in organizations. Consequently, management accounting is (again) at risk of becoming irrelevant. To secure its relevance, management accountants need to become aware of their role as choice architects and need to develop into professionals whose core competence is to provide insight into quantitative information as a product of human decision making and, vice versa, to explain and predict decision-making behavior as a response to quantitative information. Academic management accounting research should facilitate this development. How this can be done is illustrated using three examples of practically relevant research areas: subjective performance evaluation, internal transparency and the design of the control function in organizations.
    Keywords: behavioral economics, choice architecture, controller, controlling, financial management, management accountant, management accounting
    JEL: M41
    Date: 2012–10–05
  4. By: Luis Almeida Costa; Joao Amaro de Matos
    Abstract: The alignment of collective goals and individual behavior has been extensively studied by economists under a principal-agent framework. Two main solutions have been presented: explicit incentive contracts and monitoring. These solutions correspond to changes in the objective situation faced by individuals. However, an extensive literature in social psychol- ogy provides evidence that behavior is influenced, not only by situational constraints, but also by attitudes. Therefore, an important aspect of organization is to choose the struc- tures and procedures that best contribute to the dissemination of the desired attitudes throughout the organization. This paper studies how the initial configuration of attitudes and the size of the organization affect the optimal organizational structure and the timing of information flows when the objective is to align the members' attitudes. We identify and characterize three factors that affect the optimal organizational structures and procedures and the degree of alignment of attitudes: (1) clustering effects; (2) member cross-influence effects; and (3) leader cross-influence effects. JEL codes:
    Keywords: Organizational Structure, Timing of Information Flows, Attitude Change, Infuence
    Date: 2013
  5. By: Benjamin Kern (University of Marburg); Malte Ackermann (University of Marburg)
    Abstract: A merger between two innovation competitors is often suspected to reduce the variety of heterogeneous entities which are currently undertaking R&D or which are well situated to undertake R&D in a certain field. The consequential reduction of “diversity” can be detrimental to innovation because it reduces the number of independent sources for possible future innovations and might furthermore lead to an alignment of formerly different R&D programs. However, if “diversity” indeed benefits innovative performance, even merged firms should have an incentive to maintain it in-house. Therefore, this article aims to bring to light whether firms can indeed be expected to create or maintain “diversity” post-merger. By focusing on the strategic management and organizational science literature we will demonstrate that the creation/maintenance of independent entities is indeed considered as an important determinant for the innovativeness and general performance of firms. Nevertheless, we will also show that this strategy has several grave implementation problems and might be hampered by certain trade-offs. As a consequence, competition authorities cannot presume that a reduced “inter-firm diversity” will get substituted by an increased “intra-firm diversity” without fail.
    JEL: B52 K21 L4 M1 O31 O32
    Date: 2014
  6. By: Marco Angrisani (University of Southern California and RAND Corporation); Michael D. Hurd (RAND Corporation); Erik Meijer (University of Southern California and RAND Corporation); Andrew M. Parker (RAND Corporation); Susann Rohwedder (RAND Corporation)
    Abstract: Besides compensation and financial incentives, several other work-related factors may affect individual retirement decisions. Specifically, job characteristics such as autonomy, skill variety, task significance and difficulty, stress and physical demands, peer pressure and relations with co-workers, play a crucial role in determining psychological commitment to work at older ages. While financial preparedness for retirement and health shocks are often cited as main predictors of the choice to exit the labor force, there exists relatively little research documenting the extent to which the work environment itself and its interaction with economic variables influence retirement decisions. We document that job characteristics are associated with labor force transitions at older ages, in particular transitions to retirement and part-time employment. Additionally, we show that while personality traits do not directly drive labor force transitions, the effect of job characteristics on labor supply outcomes varies with the “intensity” of personality traits. We also document that job characteristics themselves are strongly related to personality traits. This suggests that, depending on their personality, individuals may select into specific jobs, whose characteristics ultimately shape their retirement paths.
    Date: 2013–09

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