nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2014‒10‒22
seven papers chosen by
Tommaso Reggiani
Universität zu Köln

  1. Optimal effort incentives in dynamic tournaments By Arnd Heinrich Klein; Armin Schmutzler
  4. Income Inequality in Chile and the Rol of Spatial Labor Sorting By Susana Katherine Chacón Espejo; Dusan Paredes Araya
  5. Career Progression, Economic Downturns and Skills By Jérôme Adda; Christian Dustmann; Costas Meghir; Jean-Marc Robin
  6. The impact of diversity on group and individual performance By Swarnodeep Homroy; Kwok Tong Soo
  7. The Merger-Paradox: A Tournament-Based Solution By Fan, Cuihong; Wolfstetter, Elmar G.

  1. By: Arnd Heinrich Klein; Armin Schmutzler
    Abstract: This paper analyzes two-stage rank-order tournaments. A principal decides (i) how to spread prize money across the two periods, (ii) how to weigh performance in the two periods when awarding the second-period prize, and (iii) whether to reveal performance after the … first period. The information revelation policy depends exclusively on properties of the effort cost function. The principal always puts a positive weight on first-period performance in the second period. The size of the weight and the optimal prizes depend on properties of the observation error distribution; they should be chosen so as to strike a balance between the competitiveness of fi…rst- and second-period tour- naments. In particular, the principal sets no …first-period prize unless the observations in period one are considerably more precise than in period two.
    Keywords: Dynamic tournaments, repeated contests, information revelation, effort incentives
    JEL: D02 D44
    Date: 2014–10
  2. By: Lucian Dragos POPESCU (National Defense University „Carol I”); Diana TUTUIANU (National Defense University „Carol I”)
    Abstract: Contemporary organization has to survive in a continuously and rapidly changing environment. Any organization is usually structured according to certain formal principles and therefore it is rigid and quite reluctant to change. Teams, on the other hand, have more reduced dimensions and a higher degree of sensitivity, and that is why they are more inclined towards adapting to change. Organizations that desire to increase their capacity of reaction need to support the ability of teams to perform self-management
    Date: 2013–11
  3. By: Mirela PUSCASU (National Defence University “Carol I”); Radu SILAGHI
    Abstract: Participatory management and leadership can enhance an organization's effectiveness and capacity by the fact that the only asset a manager has are the people. If people show loyalty, and are willing to work at full capacity and to make extra efforts, if they trust their leaders and feel safe, then the results and efficiency will be increased. The more one can delegate the decision-making and responsibilities, the more loyalty and trust one will have from the employees.
    Keywords: participatory management, leadership
    Date: 2013–11
  4. By: Susana Katherine Chacón Espejo (Master in Regional Sciences - Department of Economics, Universidad Católica del Norte - Chile); Dusan Paredes Araya (IDEAR - Department of Economics, Universidad Católica del Norte - Chile)
    Abstract: The spatial income inequality in Latin American countries is a recent academic affair. Particularly, the case of Chile highlights around the world because it has one of the highest individual and spatial inequality rates. This article analyzes the spatial income inequality in Chile during 1992 2011 evaluating the role of the spatial labor sorting through multilevel models. The findings show that human capital doesn't allocate randomly across the space but its spatial concentration at the biggest urban centers impacts significantly the income inequality between counties. These findings motivate the discussion about spatial dimension of the inequality and suggest that policymakers should consider ways to spread human capital throughout the nation as an alternative to reduce spatial inequality.
    Keywords: Spatial income inequality, spatial labor sorting, human capital, multilevel regression.
    JEL: O15 O18 R12 R23
    Date: 2013–04
  5. By: Jérôme Adda (University College London - London's Global University); Christian Dustmann (University College London - London's Global University (UCL)); Costas Meghir (UCL Department of Economics); Jean-Marc Robin (Département d'économie)
    Abstract: This paper analyzes the career progression of skilled and unskilled workers, with a focus on how careers are affected by economic downturns and whether formal skills, acquired early on, can shield workers from the effect of recessions. Using detailed administrative data for Germany for numerous birth cohorts across different regions, we follow workers from labor market entry onwards and estimate a dynamic life-cycle model of vocational training choice, labor supply, and wage progression. Most particularly, our model allows for labor market frictions that vary by skill group and over the business cycle. We find that sources of wage growth differ: learning-by-doing is an important component for unskilled workers early on in their careers, while job mobility is important for workers who acquire skills in an apprenticeship scheme before labor market entry. Likewise, economic downturns affect skill groups through very different channels: unskilled workers lose out from a decline in productivity and human capital, whereas skilled individuals suffer mainly from a lack of mobility.
    Date: 2013–03
  6. By: Swarnodeep Homroy; Kwok Tong Soo
    Abstract: Using data on a student group project in which groups are exogenously formed, we examine the potential productivity gains from employing work-teams which are diverse in terms of gender, nationality and ability. We find no significant effect of diversity on overall team performance, except when the team members are from different socio-cultural backgrounds. More importantly, we find that students who have worked in more diverse teams experience a subsequent improvement in individual productivity. These individual productivity gains hold for both domestic and foreign students, and for students of different levels of ability. Our results suggest a mechanism by which diversity enhances individual and collective performance.
    Keywords: Group composition, diversity, performance
    Date: 2014
  7. By: Fan, Cuihong; Wolfstetter, Elmar G.
    Abstract: According to the well-known “merger paradoxâ€, in a Cournot market game mergers are generally unprofitable unless most firms merge. The present paper proposes an optimal merger mechanism. With this mechanism mergers are never unprofitable, more profitable than in other known mechanism, and in many cases welfare increasing. The proposed mechanism assumes that merged firms continue to operate as independent subsidiaries that are rewarded according to a simple and commonly observed relative performance measure.
    Keywords: Mergers; multi-divisional firms; tournaments; industrial organization.
    JEL: L00 D4
    Date: 2014–08

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