nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2015‒01‒19
nineteen papers chosen by
Tommaso Reggiani
Universität zu Köln

  1. The Role of Employee Retention and Employee Productivity on the Performance of Oil & Gas Sector of Pakistan By Hunjra, Ahmed Imran; Raza, Hassan; Munir, Irfan Ullah
  2. Share Capitalism and Worker Wellbeing By Bryson, Alex; Clark, Andrew E.; Freeman, Richard B.; Green, Colin P.
  3. Evaluation of the Teacher Incentive Fund: Implementation and Early Impacts of Pay-for-Performance After One Year: Executive Summary By Jeffrey Max; Jill Constantine; Alison Wellington; Kristin Hallgren; Steven Glazerman; Hanley Chiang; Cecilia Speroni
  4. Evaluation of the Team-Based Goals and Performance-Based Incentives (TBGI) Innovation in Bihar By Evan Borkum; Anu Rangarajan; Dana Rotz; Swetha Sridharan; Sukhmani Sethi; Mercy Manorajini
  5. Labor market transitions after layoffs: the role of occupational skills By Miriam Rinawi; Matthias Krapf; Uschi Backes-Gellner
  6. Unfair Pay and Health By Armin Falk; Fabian Kosse; Ingo Menrath; Pablo Emilio Verde; Johannes Siegrist
  7. Who Performs Better under Time Pressure? Results from a Field Experiment By De Paola, Maria; Gioia, Francesca
  8. Change in police organizations : A study of commitment, communication, culture, leadership and participiation By Rogiest, S.
  9. Early Implementation Experiences of the 2010 Teacher Incentive Fund Grantees By Jeffrey Max; Jill Constantine; Alison Wellington; Kristin Hallgren; Steve Glazerman; Hanley Chiang; Cecilia Speroni
  10. Strategic Incomplete Contracts: Theory and Experiments By Erkal, Nisvan; Wu, Steven Y.; Roe, Brian E.
  11. Human Capital Accumulation in a Federation By Daniele Coen-Pirani
  12. Women Helping Women? Evidence from Private Sector Data on Workplace Hierarchies By Astrid Kunze; Amalia R. Miller
  13. Student Loans and Repayment: Theory, Evidence and Policy By Lance Lochner; Alexander Monge-Naranjo
  14. Paying More Wisely: Effects of Payment Reforms on Evidence-Based Clinical Decision-Making By Timothy K. Lake; Eugene C. Rich; Christal Stone Valenzano; Myles M. Maxfield
  15. Social Capital and Firm’s Productivity in Italy: a Multilevel Approach By Sebastiano Nerozzi; Vito Pipitone; Giorgio Ricchiuti
  16. Financial Work Incentives for Disability Benefit Recipients: Lessons from a Randomised Field Experiment By Bütler, Monika; Deuchert, Eva; Lechner, Michael; Staubli, Stefan; Thiemann, Petra
  17. All Work and No Play? The Effects of Ability Sorting on Students’ Non-school Inputs, Time Use, and Grade Anxiety By Liang Choon Wang
  18. Transfer Incentives for High-Performing Teachers: Results from a Multisite Randomized Experiment By Steven Glazerman; Ali Protik; Bing-ru Teh; Julie Bruch; Jeffrey Max
  19. Paying the Doctor: Evidence-Based Decisions at the Point-of-Care and the Role of Fee-for-Service Incentives By Eugene C. Rich; Timothy K. Lake; Christal Stone Valenzano; Myles M. Maxfield

  1. By: Hunjra, Ahmed Imran; Raza, Hassan; Munir, Irfan Ullah
    Abstract: Purpose: Human resource management practices are essential for managers to be followed that need to be implemented and new processes that continuously be practised by different level of employees. The objective of this study is to examine the association between the employee retention, and employee development along with organizational performance. Methodology: A five point Likert scale was used and 205 responses were processed. Findings: The results of the study show that employee retention as well as employee productivity are significantly related to organizational performance. Recommendations: The employees’ outcomes can serve as a valuable predictor to the employee satisfaction for organization.
    Keywords: Retention, Productivity, Organizational Performance, HRM
    JEL: M1 M12 M16
    Date: 2014–11–02
  2. By: Bryson, Alex (National Institute of Economic and Social Research (NIESR)); Clark, Andrew E. (Paris School of Economics); Freeman, Richard B. (Harvard University); Green, Colin P. (Lancaster University)
    Abstract: We show that worker wellbeing is not only related to the amount of compensation workers receive but also how they receive it. While previous theoretical and empirical work has often been pre-occupied with individual performance-related pay, we here demonstrate a robust positive link between the receipt of a range of group performance schemes (profit shares, group bonuses and share ownership) and job satisfaction. Critically, this relationship remains after conditioning on wage levels, which suggests these pay methods provide utility to workers in addition to that through higher wages. These findings survive a variety of methods aimed at accounting for unobserved individual and job-specific characteristics. We investigate two potential channels for this effect. We first demonstrate that half of the positive effect can be accounted for by employees' tendency to reciprocate in return for the "gift" of share capitalism. Second, we show that these 'share capitalist' modes of pay dampen the negative wellbeing effects of what we typically think of as "bad" aspects of job quality. Finally, share-capitalist pay methods also have positive wellbeing spill-over effects on co-workers.
    Keywords: compensation methods, wages, job satisfaction, working conditions
    JEL: J28 J33 J54 J63 J81 M52
    Date: 2014–12
  3. By: Jeffrey Max; Jill Constantine; Alison Wellington; Kristin Hallgren; Steven Glazerman; Hanley Chiang; Cecilia Speroni
    Abstract: This is the first of four planned reports from a multiyear study focusing on the Teacher Incentive Fund grants awarded in 2010. It examines grantees’ implementation experiences and intermediate educator outcomes near the end of the first year of program implementation, before the first pay-for-performance payouts to teachers and principals.
    Keywords: TIF, Teacher Incentive Fund, Pay-for-Performance, Education
    JEL: I
    Date: 2014–09–16
  4. By: Evan Borkum; Anu Rangarajan; Dana Rotz; Swetha Sridharan; Sukhmani Sethi; Mercy Manorajini
    Abstract: This report summarizes a rigorous randomized evaluation of a teamwork and goal-setting intervention in Bihar, India, that uses incentives and lessons from motivational theory to encourage teams of frontline health workers to improve maternal and child health in their communities.
    Keywords: TBGI Team-Based Goals Performance Based Incentives Bihar
    JEL: F Z
    Date: 2014–02–14
  5. By: Miriam Rinawi (Department of Business Administration, University of Zurich); Matthias Krapf (Faculty of Business and Economics, Université de Lausanne); Uschi Backes-Gellner (Department of Business Administration, University of Zurich)
    Abstract: In this paper, we study the role of occupational skills in individuals’ labor market transitions. Using rich data on skills required in occupations, we introduce a concept of occupation-specific human capital and develop empirical measures for occupational specificity and occupation distance. We find a strong relationship between the degree of occupational specificity and individuals’ mobility patterns and wages. In particular, after layoffs, individuals with more occupation-specific human capital are less likely to find reemployment in a different occupation and are more likely to suffer prolonged periods of unemployment. We also find that, upon reemployment, these individuals receive a wage premium. These results suggest a risk-return tradeoff to educational investments into more specific human capital. In addition, we develop a measure for the distance between occupations and find that individuals who move to occupations with similar skill requirements (i.e. lower distance) suffer smaller wage losses than individuals with more distant moves. Thus, we show that skills are transferable across occupations and that occupational specificity largely determines mobility patterns and wages after layoffs.
    Keywords: Keywords: occupational mobility, layoffs, unemployment, human capital, skills, occupational training.
    JEL: J62 J63 J64 J24
    Date: 2014–12
  6. By: Armin Falk; Fabian Kosse; Ingo Menrath; Pablo Emilio Verde; Johannes Siegrist
    Abstract: This paper investigates physiological responses to perceptions of unfair pay. We use an integrated approach exploiting complementarities between controlled lab and representative field data. In a simple principal-agent experiment agents produce revenue by working on a tedious task. Principals decide how this revenue is allocated between themselves and their agents. Throughout the experiment we record agents' heart rate variability, which is an indicator of stress-related impaired cardiac autonomic control and has been shown to predict coronary heart diseases in the long-run. Using three measures of perceived unfairness our findings establish a link between unfair payment and heart rate variability. Building on these findings, we further test for potential adverse health effects of unfair pay using data from a large representative data set. The analysis includes cross-sectional and dynamic panel estimations. Complementary to our experimental findings we find a strong and highly significant negative association between health outcomes, in particular cardiovascular health, and the perception of unfair pay.
    Keywords: Fairness, social preferences, inequality, heart rate variability, health, experiments, SOEP
    JEL: D91 D03 D63 I14
    Date: 2014
  7. By: De Paola, Maria (University of Calabria); Gioia, Francesca (University of Edinburgh)
    Abstract: We investigate whether and how time pressure affects performance. We conducted a field experiment in which students from an Italian University are proposed to choose between two exam schemes: a standard scheme without time pressure and an alternative scheme consisting of two written intermediate tests, one of which to be taken under time pressure. Both exam schemes consist of a verbal and a numerical part, each carrying half of the total marks. Students deciding to sustain the alternative exam are randomly assigned to a "time pressure" and a "no time pressure" group. Students performing under time pressure at the first test perform in absence of time pressure at the second test and vice versa. We find that being exposed to time pressure exerts a negative and statistically significant impact on students' performance both at the verbal and at the numerical task. The effect is driven by a strong negative impact on females' performance, while there is no statistically significant effect on males. Gender differences in handling time pressure are relevant only when dealing with the verbal task. Using data on students' expectations, we also find that the effect produced by time pressure on performance was correctly perceived by students. Female students expect a lower grade when working under time pressure, while males do not.
    Keywords: time pressure, time constraints, gender differences, student performance
    JEL: C93 D03 I23 J71
    Date: 2014–12
  8. By: Rogiest, S.
    Abstract: Three studies empirically test the impact of change context, process and individual characteristics on employee commitment. The first study highlights the significance of an involvement-oriented climate when changing an organization. The results show that such a climate increases quality change communication as well as employees’ positive view on change. Additionally, the analyses of change processes confirm the benefits of timely, high-quality communication during change initiatives. With regards to employee participation, in contrast, we found this has a negative effect in a high formalization climate. In the second study, the relation between employee participation and commitment to change is further probed. The results show that for individuals with high development orientation towards leadership, high employee participation during organizational change leads to a rise in affective commitment to change. In contrast, for employees with high dominance orientation, high participation in decision-making reduces their positive attitude towards change. The third study shows that older employees perceive change consequences more positively. The perceived change consequences, in turn, significantly impact commitment to change and to the organization.
    Date: 2014
  9. By: Jeffrey Max; Jill Constantine; Alison Wellington; Kristin Hallgren; Steve Glazerman; Hanley Chiang; Cecilia Speroni
    Abstract: The Teacher Incentive Fund (TIF) provides grants to support performance-based compensation systems for teachers and principals in high-need schools. This snapshot of the program looks at the early implementation experiences of the 2010 TIF grantees.
    Keywords: TIF, Teacher Incentive Fund, Education
    JEL: I
    Date: 2014–09–16
  10. By: Erkal, Nisvan (University of Melbourne); Wu, Steven Y. (Purdue University); Roe, Brian E. (Ohio State University)
    Abstract: We develop a model of strategic contractual incompleteness that identifies conditions under which principals might omit even costlessly verifiable terms. We then use experiments to test comparative statics predictions of the model. While it is well known that verifiability imperfections can limit complete contracting, researchers know less about how the degree of imperfection affects endogenous incompleteness, particularly with repeat trading. In our baseline treatment with perfect verifiability, subjects overwhelmingly used complete contracts to conduct trades, achieving nearly first best outcomes. In our partial verifiability treatment with a reduced set of verifiable performance levels, the results reversed and parties relied heavily on incomplete contracts that omitted even costlessly verifiable terms. However, the efficacy of incomplete contracts in outperforming available complete contracts depends critically on the continuation probability of repeat trading. With a small continuation probability, incomplete contracts did no better than complete contracts while exposing parties to considerable strategic uncertainty.
    Keywords: incomplete contract, relational contract, endogenous incompleteness, informal incentives, experimental economics
    JEL: C73 C91 D86 J41 L14 L24 M52
    Date: 2014–12
  11. By: Daniele Coen-Pirani (University of Pittsburgh)
    Abstract: More than half of the variation across U.S. school districts in real K-12 education expenditures per student is due to differences between, rather than within, states. I study the welfare implications of redistribution of education expenditures by the Federal government, using an analytically tractable model of human capital accumulation with heterogeneous agents and endogenous state policies. The net welfare effect of Federal redistribution depends on a trade-off between the positive effect of redistributing resources toward poorer states and the negative effect resulting from misallocation of population across states. Federal redistribution increases welfare in a calibrated version of the model.
    Keywords: human capital, education expenditures, redistribution, federal, local, state governments, geographic mobility
    JEL: E24 H70 I20 J60
    Date: 2014–12
  12. By: Astrid Kunze; Amalia R. Miller
    Abstract: This paper studies gender spillovers in career advancement using 11 years of employer-employee matched data on the population of white-collar workers at over 4,000 private-sector establishments in Norway. Our data include unusually detailed job information for each worker, which enables us to define seven hierarchical ranks that are consistent across establishments and over time in order to measure promotions (defined as year-to-year rank increases) even for individuals who change employers. We first find that women have significantly lower promotion rates than men across all ranks of the corporate hierarchy, even after controlling for a range of individual characteristics (age, education, tenure, experience) and including fixed effects for current rank, year, industry, and even work establishment. In measuring the effects of female coworkers, we find positive gender spillovers across ranks (flowing from higher-ranking to lower-ranking women) but negative spillovers within ranks. The finding that greater female representation at higher ranks narrows the gender gap in promotion rates at lower ranks suggests that policies that increase female representation in corporate leadership can have spillover benefits to women in lowers ranks.
    JEL: J13 J31 J62 J7 K31 M14 M51
    Date: 2014–12
  13. By: Lance Lochner (University of Western Ontario); Alexander Monge-Naranjo (Federal Reserve Bank of St. Louis and Washington University at St. Louis)
    Abstract: Rising costs of and returns to college have led to sizeable increases in the demand for student loans in many countries. In the U.S., student loan default rates have also risen for recent cohorts as labor market uncertainty and debt levels have increased. We discuss these trends as well as recent evidence on the extent to which students are able to obtain enough credit for college and the extent to which they are able to repay their student debts after. We then discuss optimal student credit arrangements that balance three important objectives: (i) providing credit for students to access college and finance consumption while in school, (ii) providing insurance against uncertain adverse schooling or post-school labor market outcomes in the form of income-contingent repayments, and (iii) providing incentives for student borrowers to honor their loan obligations (in expectation) when information and commitment frictions are present. Specifically, we develop a two-period educational investment model with uncertainty and show how student loan contracts can be designed to optimally address incentive problems related to moral hazard, costly income verification, and limited commitment by the borrower. We also survey other research related to the optimal design of student loan contracts in imperfect markets. Finally, we provide practical policy guidance for re-designing student loan programs to more efficiently provide insurance while addressing information and commitment frictions in the market.
    Keywords: Human Capital; Borrowing; Student Loans; Default; Repayment; Income-Contingent; Credit Constraint
    JEL: D14 D82 H21 H52 I22 I24 J24
    Date: 2014
  14. By: Timothy K. Lake; Eugene C. Rich; Christal Stone Valenzano; Myles M. Maxfield
    Abstract: This article reviews the recent research, policy, and conceptual literature on the effects of payment policy reforms on evidence-based clinical decision making by physicians at the point of care. Payment reforms include recalibration of existing fee structures in fee-for-service, pay-for-quality, episode-based bundled payments and global payments. The authors review the advantages and disadvantages of these reforms in terms of their effects on physicians’ and patients’ use of evidence in clinical decisions related to the diagnosis, testing, treatment, and management of disease. They conclude with a recommended pathway for improving payment incentives to better support evidence-based decision making.
    Keywords: Comparative Effectiveness Research, Evidence-Based Decision-Making, Incentive Physician Payment Reform
    JEL: I
    Date: 2013–05–30
  15. By: Sebastiano Nerozzi; Vito Pipitone; Giorgio Ricchiuti (Dipartimento di Scienze per l'Economia e l'Impresa)
    Abstract: Matching and merging different databases, we study how firm’s productivity is affected by individual characteristics and provincial context conditions in Italy. Mainly, we focus on the relation between social capital, in its different forms and dimensions and calculated at provincial level and firms’ productivity, calculated using the non-parametric DEA approach. We find that exporting, self-financing firms, and firms belonging to groups, are more productive. In particular, Cooperative firms are more productive than limited company. Moreover, the variables capturing the social capital show strong positive correlation with firms’ productivity, indicating that a widespread civism intended as pro-social behavior independent of specific interpersonal bounds, seems to create an economic environment which is more favorable to entrepreneurship and collaboration among firms, since it increases interpersonal trust, lowers transaction costs, enhances the compliance of formal or informal rules of fairness and fosters a more transparent, impartial and efficient working of the public administration.
    Keywords: DEA, productivity, social capital, inequality, multilevel approach
    JEL: C19 D24 R10
    Date: 2014
  16. By: Bütler, Monika (University of St. Gallen); Deuchert, Eva (University of St. Gallen); Lechner, Michael (University of St. Gallen); Staubli, Stefan (University of Calgary); Thiemann, Petra (University of Southern California)
    Abstract: Disability insurance (DI) beneficiaries lose part of their benefits if their earnings exceed certain thresholds (“cash-cliffs”). This implicit taxation is considered the prime reason for low DI outflow. We analyse a conditional cash program that incentivises work related reductions of disability benefits in Switzerland. 4,000 randomly selected DI recipients receive an offer to claim up to CHF 72,000 (USD 71,000) if they expand work hours and reduce benefits. Initial reactions to the program announcement, measured by call-back rates, are modest; individuals at cash-cliffs react more frequently. By the end of the field phase, the take-up rate amounts to only 0.5%.
    Keywords: disability insurance, field experiment, financial incentive, return-to-work
    JEL: H55 J14 C93 D04
    Date: 2014–12
  17. By: Liang Choon Wang
    Abstract: How students’ non-school inputs respond to ability grouping may explain the currently mixed findings in the literature about the impacts of tracking. Using data from South Korea, where students are randomized into middle schools under the country’s equalization policy, but sorted into different high schools on the basis of achievement in some non-equalization policy areas, I find that under ability sorting, students’ demand for private tutoring, self-study time, and grade anxiety levels are lower, and their hours of sleep and leisure are higher. The effects on private tutoring are particularly significant for high achievers, while the effects on self-study and leisure hours are strong for low achievers. The results potentially help reconcile the mixed findings in the ability grouping and tracking literature.
    Keywords: Tracking; shadow education; leisure; time use; anxiety; Korea.
    JEL: I21 I28 I31 J22 J24
    Date: 2014–09
  18. By: Steven Glazerman; Ali Protik; Bing-ru Teh; Julie Bruch; Jeffrey Max
    Abstract: Many education policy experts have raised concerns that disadvantaged students do not have the same access to highly effective teachers as other students. To address this issue, IES sponsored an evaluation of an intervention known to study participants as the Talent Transfer Initiative (TTI). TTI offered a financial incentive to the teachers with the highest scores year after year on value-added measures (estimates of their ability to raise test scores, after accounting for differences between students) if they would transfer to a low-achieving school in the same district and remain there for at least two years. About 22 percent of the selected teachers applied for the transfer, and 5 percent (81 teachers) ultimately transferred. These teachers filled 88 percent of the targeted teaching vacancies in low-performing schools.
    Keywords: TTI, Teacher Transfer Incentives, High-Performing Schools, Multisite Randomized Experiment
    JEL: I
    Date: 2013–11–07
  19. By: Eugene C. Rich; Timothy K. Lake; Christal Stone Valenzano; Myles M. Maxfield
    Abstract: This article dvelops a framework for understanding how financial and nonfinancial incentives can complicate point-of-care decision making by physicians, leading to the over- or under-use of health care services. The analysis highlights contributing factors that promote and impede evidence-based decision making, using examples from the “Choosing Wisely†program. The authors discuss how the existing fee-for-service payment system can contribute to the problems of over- and under-testing, diagnosis, and treatment.
    Keywords: Comparative Effectiveness Research, Evidence-Based Decision-Making, Incentive, Physician Payment Reform
    JEL: I
    Date: 2013–05–30

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