nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2015‒03‒27
eleven papers chosen by
Tommaso Reggiani
Universität zu Köln

  1. Gender and dynamic agency: theory and evidence on the compensation of top executives By Albanesi, Stefania; Olivetti, Claudia; Prados, María José
  2. Human Capital Formation from Occupations: The ‘Deskilling Hypothesis’ Revisited By Pleijt, Alexandra M. de; Weisdorf, Jacob L.
  3. The impact of Human Capital Management on the Innovativeness of research Center: The Case of Scientific Research Centers in Algeria By Samah SOULEH
  4. The Role and Impact of Education on Workplace Challenges and Performance: a Romanian Perspective By Serban-Oprescu Anca-Teodora; Stefania-Cristina Curea
  6. Testing The Relationship Between Total Quality Management Practices and Performance - An Applied Study at Girne American University By Olgun Çiçek; Hakar Mohammed
  7. Top Management Teams group structure and group dynamics as determinants of companies performance. Evidence from Poland By Małgorzata Marchewka
  8. Women on the board and executive duration: Evidence for European listed firms By Buchwald, Achim; Hottenrott, Hanna
  9. Performance Appraisal Satisfaction in the Brunei's Civil Service: A Structural Equation Modelling Approach By Norfarizal Othman
  10. Incentivizing Cost-Effective Reductions in Hospital Readmission Rates By James C. Cox; Vjollca Sadiraj; Kurt E. Schnier; John F. Sweeney
  11. A case study of peer-rater differences in Hong Kong By Tillotson Li

  1. By: Albanesi, Stefania (Federal Reserve Bank of New York); Olivetti, Claudia; Prados, María José
    Abstract: We document three new facts about gender differences in executive compensation. First, female executives receive a lower share of incentive pay in total compensation relative to males. This difference accounts for 93 percent of the gender gap in total pay. Second, the compensation of female executives displays lower pay-performance sensitivity. A $1 million increase in firm value generates a $17,150 increase in firm-specific wealth for male executives and a $1,670 increase for females. Third, female executives are more exposed to bad firm performance and less exposed to good firm performance relative to male executives. We find no link between firm performance and the gender of top executives. We discuss evidence on differences in preferences and the cost of managerial effort by gender and examine the resulting predictions for the structure of compensation. We consider two paradigms for the pay-setting process, the efficient contracting model and the “managerial power" or skimming view. The efficient contracting model can explain the first two facts. Only the skimming view is consistent with the third fact. This suggests that the gender differentials in executive compensation may be inefficient.
    Keywords: gender differences in executive pay; incentive pay; pay-performance sensitivity
    JEL: G3 J16 J31 J33 M12
    Date: 2015–03–01
  2. By: Pleijt, Alexandra M. de (Utrecht University); Weisdorf, Jacob L. (Utrecht University)
    Abstract: We use HISCLASS to code the occupational titles of over 30,000 English male workers according to the skill-content of their work. We then track the evolution of the sampled working skills across three centuries of English history, from 1550 to 1850. We observe a modest rise in the share of ‘high-quality workmen’ deemed necessary by Mokyr and others to facilitate the Industrial Revolution, including machine erectors and operators. But we also find remarkable growth in the share of unskilled workers, rising from 20% in the late sixteenth century to nearly 40% in the early nineteenth century, caused mainly by falling shares of semi-skilled, blue-collar workers. Close inspection of the occupational structures within the main sectors of production suggest that deskilling occurred in agriculture and industry alike, prompted by land concentration in agriculture and workshop-to-factory changes in industry.
    Keywords: Deskilling, HISCLASS, Human Capital, Industrial Revolution, Occupations
    Date: 2015
  3. By: Samah SOULEH (University of Biskra -Algeria)
    Abstract: Nowadays, we are moving towards a knowledge economy where the competitiveness of firms is mainly based on their capacity of innovation, and on the management of their intellectual capital. Moreover, it is widely accepted that firm’s innovation capabilities are more closely linked to their intellectual capital than to their fixed assets. The importance of intellectual capital for innovation has attracted researchers interested in determining its elements and the process by which enhances the innovative capabilities and performance of firms (Carmen Cabello-Medina et al, 2011).There is a multi-faceted description of intellectual capital as proposed by intellectual capital theorists. A study by Sveiby (1987), for example, proposed that knowledge-based assets could be found in three places: the competencies of organization members, its internal structure; such as: patents, models, computer and administrative assets, and external structure such as brands, reputation and relationships with customers (Rosmah et al, 2008). As a general perception, intellectual capital has three components: human capital, structural capital and relational capital (Suciu, 2000).The human capital has been emphasized as one of the key success factors of a company. It can be assumed that most successful companies have organized or at least they should have organized their management of the human capital systematically. The management of human capital can be put into practice by applying competence management and knowledge management practices. Numerous studies of competence and knowledge management have been carried out but the practices of this area are still not very well known (Hannula et al, 2003). Moreover, Subramaniam and Youndt (2005) found that the combination of human and social capital positively affected firms’ innovative capabilities (T.T. Selvarajan et al, 2007). This research aims at examining the impact of human capital management on the innovativeness of Scientific Research Centers through competencies and knowledge management approach. The study was applied to the case of Scientific Research Centers in Algeria; such as: (CREAD, CRSTRA, CDTA, CDER, CERIST, CRBt, CRAPC, CSC, CRSTDLA, and CRASC). The data of the study was collected through interviews and a questionnaire during 2011-2013, and it was analyzed using SPSS 18.0 to determine the interaction between the various factors. The findings broadly support the hypothesis and suggest a number of insights about future studies.
    Keywords: Human Capital Management, Knowledge Management , Competencies Management , innovativeness, Scientific Research Centers in Algeria.
    JEL: O15 M10 O15
    Date: 2014–05
  4. By: Serban-Oprescu Anca-Teodora (Bucharest University of Economic Studies); Stefania-Cristina Curea (Bucharest University of Economic Studies)
    Abstract: „This paper was co-financed from the European Social Fund, through the Sectorial Operational Programme Human Resources Development 2007-2013, project number POSDRU/159/1.5/S/138907 "Excellence in scientific interdisciplinary research, doctoral and postdoctoral, in the economic, social and medical fields -EXCELIS", coordinator The Bucharest University of Economic Studiesâ€. This paper provides a review of theoretical studies linking university education and developed sense of adaptability and performance in a business oriented career. The study starts with a review of field literature connecting education to career development and work insertion, details the role of education on developing workplace abilities and aptitudes and contextualizes theory into an empirical study that uses exploratory interviews with business people and students from Romania in order to highlight how education interferes and impacts workplace requirements and performance standards in the present Romanian job market.
    Keywords: education, university schooling, workplace performance, selection
    JEL: A00 I20 I21
    Date: 2014–12
  5. By: Suzana Demyen (West University of Timisoara); Ion Lala Popa (West University of Timisoara)
    Abstract: The phenomenon of migration is widely spread throughout the world, as long as more and more individuals choose to work abroad in the idea of gaining a better payment. Also the process of globalization and the decreasing of demographic aspects manifest their influence upon the evolution of business environment generally. We also witness a general gap between men and women in terms of payment, a salary difference through the whole Europe, but also a general gap between the wage levels among countries. The paper proposes an analysis of the current situation regarding wage gaps in Romania, the research being developed in mainly a qualitative one and the results are analyzed in accordance to the data provided by official institutions. Often, the way managers perceive aspects of organizational performance in general and HR performance differs from the results reflected by the economic and financial indicators. Therefore, it becomes interesting to perform a comparison of the results expressed in official reports, through a content analysis, but also by conducting own surveys.
    Keywords: salaries; gender disparities; human resource management; emigration, performance assessment
    JEL: J21 L25 M54
    Date: 2014–10
  6. By: Olgun Çiçek (Girne American University); Hakar Mohammed (Girne American University)
    Abstract: Universities and institutions of higher education have not had transaction of competing for market share. However more recently, the trend is changing and to survive both private and public institutions must not only attract and retain a sizable number of students and staff but also provide qualitative educational services. In order to survive in the market, Total Quality Management practices already being applied in the corporate world is gradually finding its way into higher education management. This empirical research examines the relationship between total quality management (TQM) practices and performance at Girne American University (GAU). Five determinates of TQM practices were identified which includes Leadership, Strategic quality planning, Customer focus, Training, and Employee Involvement. The quantitative data were obtained through a survey of 118 students at GAU. This study supports the hypotheses that there is a different in outcomes when TQM is adopted at university. In addition, there is a positive relationship between TQM practices and university performance level.
    Keywords: TQM, TQM and Higher Education, TQM Practices, University Performance
    JEL: M19 I23
    Date: 2014–05
  7. By: Małgorzata Marchewka (Cracow University of Economics)
    Abstract: In traditional approach, company performance is related to Top Management Team (TMT) group characteristics, such as board size and composition, board tenure, age, experience, education, and competences. Initially, TMT characteristics were considered to have crucial significance for group effectiveness and organization performance. However, there is no consensus as to what extend and which TMT demographic features lead to which outcomes. The conclusion reached after numerous studies suggests that the relation between company performance, TMT effectiveness and TMT characteristics is indirect and more complex.As studies based on TMT characteristics fail to explain company performance, the role of group dynamic is becoming more and more significant in analyzing board’s functioning. Dynamic models based on group processes, such as cognitive conflict, ability to use knowledge and skills, and effort norms, indirectly link group characteristics with company performance. According to the concept of group dynamics, team may be described by its static, i.e. structural, characteristics, as well as by group processes such as process of becoming a group member, acquiring and development of group norms, group cohesion, and group effectiveness. TMT effectiveness is understood as boards’ ability to perform their roles: strategic and operational role, control role, and service role. TMT effectiveness, directly depending on group processes and indirectly on boards’ structure, affects company performance. The aim of the article is to analyze the relations between TMT structural and dynamic characteristics, and their impact on companies performance, basing on the research conducted in Poland among 291 domestic companies listed on the main market of Warsaw Stock Exchange from 2010 to 2013. The project was funded by the National Science Centre (Poland) allocated on the basis of the decision number UMO-2011/01/N/HS4/02166.
    Keywords: Top Management Team, supervisory board, management board, effectiveness, group dynamics, group processes, company performance, Top Management Team structure, Poland
    Date: 2014–10
  8. By: Buchwald, Achim; Hottenrott, Hanna
    Abstract: The participation of women in top-level corporate boards (or rather the lack of it) is subject to intense public debate. Several countries are considering legally binding quotas to increase the share of women on boards. Indeed, research on board diversity suggests positive effects of gender diverse boards on corporate governance and even firm performance. The mechanism through which these benefits materialize remain however mostly speculative. We study boards of directors in a large sample of listed companies in 15 European countries over the period 2003-2011 and find that female representation on firms' non-executive boards is associated with reduced turnover and an increase in tenure of executive board members. An increase in the performance-turnover sensitivity of executives suggests that this effect may be explained by better monitoring practices rather than by less effective control or a 'taste for continuity'.
    Keywords: Corporate Governance,Executive Turnover,Gender,TMT Diversity
    JEL: G34 J24 J63 L25 M00
    Date: 2015
  9. By: Norfarizal Othman (Institute for Development Policy and Management, University of Manchester)
    Abstract: Even though performance appraisal satisfaction is the most frequently measured appraisal reaction, however, there is hardly any meta-analysis study that link determinants of performance appraisal system to employee satisfaction. The focus of this research is to empirically examine the attributes of the performance appraisal satisfaction used in evaluating individual employee performance in the public sector of Brunei with data collected among public sector employees. The conceptual framework highlighted the various determinants of performance appraisal satisfaction by exploring the unique effects of sub-factors such as goal setting and purposes of performance appraisal; alignment of personal objectives with organisational goals; fairness of appraisal system; types of performance evaluation measures; format of rating scales; appraiser-appraisee relationship and credibility of appraiser as well as pay-for-performance variables. The conceptual framework is then tested in order to determine the extent towards which western developed theories can be applied in a developing country context. Data for this research was gathered across ten government ministries in Brunei. This research study utilizes quantitative data, supported by qualitative data. The main study employed a pre-tested survey questionnaire with 355 samples. Quantitative data was analysed using descriptive analysis and exploratory factor analysis run on Statistical Software for Social Sciences (SPSS). In subsequent analysis, confirmatory factor analysis, path analysis and structural equation modelling (SEM) are employed using Analysis of Moment Structure (AMOS) to assess the model fit of the study and hypotheses testing. SEM was chosen because it is one of the most appropriate analytic approaches when dealing with issues of specifying directionality among variables of interest and generating flexibility with which to test causal relationship. The main goal of the analysis will be to assess the plausibility of the model as a whole and later decide whether the model is a good or poor fit model. This is employed through fit indices such as absolute fit, incremental fit and parsimony fit indices. Results indicated that latent variables were positively and significantly correlated to employee satisfaction. The results also showed that the goodness of fit indices offered an acceptable fit to Brunei’s data. This study provides empirical evidence for performance appraisal and employee satisfaction at the individual level in the public sector. This study contributes theoretically by highlighting the unique effects of sub-factors on employee performance appraisal satisfaction and also contributes methodologically through the examination of the conceptual framework using structural equation modelling.
    Keywords: structural equation modelling; factor analysis; performance appraisal satisfaction
    JEL: C38 C12
    Date: 2014–06
  10. By: James C. Cox; Vjollca Sadiraj; Kurt E. Schnier; John F. Sweeney
    Abstract: The recent regulatory changes enacted by the Centers for Medicare and Medicaid Services (CMS) have identified hospital readmission rates as a critical healthcare quality metric. This research focuses on the utilization of pay-for-performance (P4P) mechanisms to cost effectively reduce hospital readmission rates and meet the regulatory standards set by CMS. Using the experimental economics laboratory we find that both of the P4P mechanisms researched, bonus and bundled payments, cost-effectively meet the performance criteria set forth by CMS. The bundled payment mechanism generates the largest reduction in patient length of stay (LOS) without altering the probability of readmission. Combined these results indicate that utilizing P4P mechanisms incentivizes cost effective reductions in hospital readmission rates.
    Keywords: Pay-for-Performance (P4P), Healthcare, Experiment
    JEL: C91 D81 I10
    Date: 2015–03
  11. By: Tillotson Li (Tung Wah College)
    Abstract: Assessing student performance in higher education has never been easy. Pedagogy to engage students in learning and make them own their learning has become increasingly popular. The paradigm of teaching has switched from teacher-centered to student-centered. Likewise, students’ involvement in assessments (self- and peer-assessments) is becoming more common. Self- and peer-assessment have widely been researched and evidenced in enhancing and motivating student learning. Differences in assessment results between peers and instructor have been found insignificant. However, differences among peers have not been studied much. The purpose of this paper is to investigate differences among peer raters. Do friends rate more leniently and not-so-friendly peers rate more stringently? Data were collected from a business communication course delivered at a Hong Kong private higher education institute for fall 2013. The course had 108 students in 3 sections, and 28 groups were formed to work on a case study. Students were required to orally present their case studies. Presentation was graded by both peer-rater groups and the instructor. For inter-rater differences, 22 of the 28 groups were rated significantly differently (P < 0.05) by their peers. However, the Cronbach’s alpha for all groups (n = 28) is 0.952 indicating high inter-rater reliability. When the 28 groups were analyzed separately, a total of 19 (67.86%) groups had Cronbach’s alpha below the benchmark 0.7 reliability threshold, but only three (10.71%) of them were significant (p < 0.05). Among the 94 anonymous questionnaires collected from students after the process, 18 students (19.15%) admitted they had awarded more marks to friendly groups; and 10 (10.64%) had awarded less marks to unfriendly groups. Six students have both awarded more and less marks to peers due to personal relationship. Discriminatory rating by individual students existed, but it was uncertain if final grades were affected.Seventy-one (75.53%) students agreed that observing other students’ presentation helped, and sixty-seven (71.28%) students agreed that the exercise trained their critical thinking skills.Peer-assessment not only enhances and motivates students’ learning, but also makes evaluation of student performance more transparent. This may reduce grade dispute between teacher and students. To reduce impact on final grade from favoritism and/or hostile grading among peers, instructors may consider removing the highest/lowest marks from peer-rater groups and reducing the weight of peer-assessment on the final grade. What is more important is what students learn from the process.
    Keywords: Peer-assessment, discriminatory grading, peer raters.
    Date: 2014–06

This nep-hrm issue is ©2015 by Tommaso Reggiani. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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