nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2014‒06‒14
nine papers chosen by
Tommaso Reggiani
University of Cologne

  1. Are Public Sector Workers Different? Cross-European Evidence from Elderly Workers and Retirees By Tonin, Mirco; Vlassopoulos, Michael
  2. Intrinsic Motivations of Public Sector Employees: Evidence for Germany By Dur, Robert; Zoutenbier, Robin
  3. Organizational Governance: Managerial Discretion, Automatic Rules or Ethics? By Maria Alessandra Antonelli
  4. Human capital accumulation in temporary jobs: specific or general? By Fabio Berton; Francesco Devicienti; Lia Pacelli
  5. Creating Reciprocal Value Through Operational Transparency By Ryan W. Buell; Tami Kim; Chia-Jung Tsay
  6. Cooperation and Personality By Proto, Eugenio; Rustichini, Aldo
  7. A Simple Model of Learning Styles By Gervas Huxley; Mike Peacey
  8. Mergers, managerial incentives, and efficiencies By Jovanovic, Dragan
  9. Pay-for-(Persistent)-Luck: CEO Bonuses Under Relational and Formal Contracting By Jed DeVaro; Jin-Hyuk Kim; Nick Vikander

  1. By: Tonin, Mirco (University of Southampton); Vlassopoulos, Michael (University of Southampton)
    Abstract: The public sector employs a large share of the labor force to execute important functions (e.g. regulation and public good provision) in an environment beset by severe agency problems. Attracting workers who are motivated to serve the public interest is important to mitigate these problems. We investigate whether public and private sector employees differ in terms of their public service motivation, as measured by their propensity to volunteer, using a representative sample of elderly workers from 12 European countries. To overcome potential identification difficulties related to unobservable differences in working conditions (e.g. working time, required effort, job security, career incentives), we also look at retired workers. We find that public sector workers, both those currently employed and those already retired, are significantly more prosocial; however, the difference in prosociality is explained by differences in the composition of the workforce across the two sectors, in terms of (former) workers' education and occupation. Looking across industries and within occupations, we find that former public sector workers in education are more motivated, while there are no differences across the two sectors when considering broad occupational categories. We also investigate other dimensions and find no differences in terms of trust, while there is evidence of some differences in risk aversion, political preferences, life and job satisfaction.
    Keywords: public sector, public service motivation, risk aversion, trust, life satisfaction, volunteering
    JEL: D64 H83 J45
    Date: 2014–06
  2. By: Dur, Robert (Erasmus University Rotterdam); Zoutenbier, Robin (Erasmus University Rotterdam)
    Abstract: We examine differences in altruism and laziness between public sector employees and private sector employees. Our theoretical model predicts that the likelihood of public sector employment increases with a worker's altruism, and increases or decreases with a worker's laziness depending on his altruism. Using questionnaire data from the German Socio-Economic Panel Study, we find that public sector employees are significantly more altruistic and lazy than observationally equivalent private sector employees. A series of robustness checks show that these patterns are stronger among higher educated workers; that the sorting of altruistic people to the public sector takes place only within the caring industries; and that the difference in altruism is already present at the start of people's career, while the difference in laziness is only present for employees with sufficiently long work experience.
    Keywords: public service motivation, altruism, laziness, sorting, public sector employment, personality characteristics
    JEL: H1 J45 M5
    Date: 2014–06
  3. By: Maria Alessandra Antonelli (Sapienza University of Rome)
    Abstract: Economic literature on organizations (Milgrom, 1998; Milgrom and Roberts 1992, 2009) points out that when distributive policies are discretionary realized within firms by managers, the agents working in the organization will undertake "influence activities" with possible negative effects on firm's productivity. Following the Milgrom's model (1988), we define a principal-agent framework analyzing alternative organizational governance methods. The paper shows that managerial discretion can always result in improved firm's performance with a principal complying with the organizational goals. Nevertheless, some reforms, especially in the public organizations, have been addressed to limit managerial discretion introducing more rules to template the mangers' behavior. Disappointing results suggest to invest for a greater development of ethical culture within organizations.
    Keywords: organizations, influence activities, managerial discretion, principal-agent
    JEL: D23 L2
    Date: 2014–05
  4. By: Fabio Berton; Francesco Devicienti; Lia Pacelli
    Abstract: Theoretical considerations suggest that workers holding temporary contracts should accumulate more general human capital than workers under permanent contracts. Using matched employer-employee data, we find empirical support for this hypothesis, by showing that dismissed temporary workers are more likely to change economic sector than workers losing their open-ended jobs.
    Date: 2014
  5. By: Ryan W. Buell (Harvard Business School, Technology and Operations Management Unit); Tami Kim (Harvard Business School); Chia-Jung Tsay (University College London)
    Abstract: We investigate whether organizations can create value by introducing visual transparency between consumers and producers. Although existing theory posits that increased contact between the two parties can diminish work performance, we conducted two field and two laboratory experiments in food service contexts that suggest that the introduction of operational transparency improves service quality and efficiency. The introduction of reciprocal operational transparency contributed to a 22.5% increase in customer-reported quality and reduced throughput times to 67.5% of standard. Customers who observed employees engaged in labor perceived greater effort, appreciated that effort, and valued the service more. Employees who observed customers felt more appreciated, and in turn, were more satisfied with their work and exerted increased levels of effort. We find that transparency, by visually revealing operating processes to both producers and consumers, generates a positive feedback loop through which value is created for both parties.
    Keywords: operational transparency, service quality, efficiency, customers, employees
    Date: 2014–06
  6. By: Proto, Eugenio (University of Warwick and CAGE); Rustichini, Aldo (University of Minnesota)
    Abstract: Cooperating behavior may be fostered by personality traits re ecting either favorable inclination to others or willingness to comply with norms and rules. We test the relative importance of these two factors in an experiment where subjects provide real mental effort in two treatments with identical task, differing only by whether others' payment is affected. If the rst hypothesis is true, subjects reporting high Agreeableness score should put more effort; if the second is true, reporting higher Conscientiousness should predict more effort. We find experimental support for the second hypothesis but not for the first, as subjects reporting high Altruism do not behave consistently with this statement.
    Keywords: Personality Traits, Cooperation, Effort Provision
    Date: 2014
  7. By: Gervas Huxley; Mike Peacey
    Abstract: Much of the economic literature on education treats the process of learning as a `black box'. While such models have many interesting uses, they are of little use when a college seeks advice about reallocating resources from one input to another (e.g. from lecture hours to seminars). Commenting on such questions requires us to `open up' the black box. This paper shows what one such model would look like by explicitly modelling how students vary in their `learning styles'. We apply this framework to investigate how reforms to higher education (e.g. MOOCs) would affect students with different learning styles.
    Keywords: Human Capital, Education Production Function, Learning Style, Independent Learner, MOOC
    JEL: I20 I23 J24
    Date: 2014–05
  8. By: Jovanovic, Dragan
    Abstract: We analyze the effects of synergies from horizontal mergers in a Cournot oligopoly where principals provide their agents with incentives to cut marginal costs prior to choosing output. We stress that synergies come at a cost which possibly leads to a countervailing incentive effect: The merged firm's principal may be induced to stifle managerial incentives in order to reduce her agency costs. Whenever this incentive effect dominates the well-known direct synergy effect, synergies actually reduce consumer surplus which opposes the use of an efficiency defense in merger control. --
    Keywords: Managerial Incentives,Horizontal Mergers,Merger Control,Productive Efficiency Gains,Synergies,Efficiency Defense
    JEL: D21 D86 L22 L41
    Date: 2014
  9. By: Jed DeVaro (California State University); Jin-Hyuk Kim (University of Colorado at Boulder); Nick Vikander (Department of Economics, Copenhagen University)
    Abstract: This study investigates the structure of optimal incentives in a stochastic environment and provides evidence for the use of self-enforcing relational contracts. We show theoretically that under relational contracting, firms can credibly promise chief executive officers (CEOs) larger bonuses in good states than in bad, in a way that depends crucially on the state's persistence and the firm's discount factor. Formal contracting instead implies the same bonus in both states. Estimating an empirical model using ExecuComp data, we find that CEO annual bonuses are related to "luck" in a manner consistent with relational contracting.
    Keywords: relational contracts, CEO compensation, pay-for-luck
    JEL: C73 D86 J41
    Date: 2014–04–08

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