nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2015‒07‒11
nine papers chosen by
Tommaso Reggiani
Universität zu Köln

  1. Self-Managed Working Time and Employee Effort: Theory and Evidence By Michael Beckmann; Thomas Cornelissen; Matthias Kräkel
  2. Physician Payment Contracts in the Presence of Moral Hazard and Adverse Selection: The Theory and its Application to Ontario By Kantarevic, Jasmin; Kralj, Boris
  3. Managerial Compensation Duration and Stock Price Manipulation By Josef Schroth
  4. Labor Supply and Productivity Responses to Non-Salary Benefits: Do They Work? If So, at What Level Do They Work Best? By Spencer, Marilyn; Gevrek, Deniz; Chambers, Valrie; Bowden, Randall
  5. Agency, Firm Growth, and Managerial Turnover By Ronald W. Anderson; Cecilia Bustamante; Stéphane Guibaud
  6. On The Local Causal Effects of Retirement on Human Capital By Eduardo Fé; Mario Pezzino
  7. The impact of taxes on competition for CEOs By Krenn, Peter
  8. Do Treatment Decisions Depend on Physicians’ Financial Incentives? By Kurt R. Brekke; Tor Helge Holmås; Karin Monstad; Odd Rune Straume
  9. Early smoking, education, and labor market performance By Palali, Ali

  1. By: Michael Beckmann; Thomas Cornelissen; Matthias Kräkel
    Abstract: This paper theoretically and empirically examines the impact of self-managed working time (SMWT) on employee effort. As a means of increased worker autonomy, SMWT can theoretically increase effort via intrinsic motivation and reciprocal behaviour, but can lead to a decrease of effort due to a loss of control. Based on German individual-level panel data, we find that SMWT employees exert higher effort levels than employees with fixed working hours. Even after accounting for observed and unobserved characteristics there remains a modest positive effect. This effect is mainly driven by employees who are intrinsically motivated, suggesting that intrinsic motivation is complementary to SMWT. However, reciprocal work intensification does not seem to be an important channel of providing extra effort.
    Keywords: Self-managed working time, worker autonomy, employee effort, reciprocity, intrinsic motivation, complementarity
    JEL: J24 J81 M50
    Date: 2015
  2. By: Kantarevic, Jasmin (Ontario Medical Assocation); Kralj, Boris (Ontario Medical Assocation)
    Abstract: We develop a stylized principal-agent model with moral hazard and adverse selection to provide a unified framework for understanding some of the most salient features of the recent physician payment reform in Ontario and its impact on physician behavior. These features include: (1) physicians can choose a payment contract from a menu that includes an enhanced fee-for-service contract and a blended capitation contract; (2) the capitation rate is higher and the cost-reimbursement rate is lower in the blended capitation contract; (3) physicians sort selectively into the contracts based on their preferences; and (4) physicians in the blended capitation model provide fewer services than physicians in the enhanced fee-for-service model.
    Keywords: physician remuneration, moral hazard, adverse selection, Ontario
    JEL: I10 I12 I18
    Date: 2015–06
  3. By: Josef Schroth
    Abstract: I build a model of optimal managerial compensation where managers each have a privately observed propensity to manipulate short-term stock prices. It is shown that this informational asymmetry reverses some of the conventional wisdom about the relationship between reliance on short-term pay and propensity to manipulate. The optimal compensation scheme features a negative relationship between pay duration and manager manipulation activity, reconciling theory with recent empirical findings (Gopalan et al., 2014). Further, the model predicts that managers who spend more resources manipulating short-term stock prices also put more effort into generating longterm firm value.
    Keywords: Economic models, Labour markets, Recent economic and financial developments
    JEL: D82 G14 G30 M12
    Date: 2015
  4. By: Spencer, Marilyn (Texas A&M University Corpus Christi); Gevrek, Deniz (Texas A&M University Corpus Christi); Chambers, Valrie (Stetson University); Bowden, Randall (Texas A&M University Corpus Christi)
    Abstract: This study explores the impact of a particular low marginal-cost employee benefit on employees' intended retention and performance. By utilizing a unique data set constructed by surveying full-time faculty and staff members at a public university in the United States, we study the impact of this employee benefit on faculty and staff performance and retention. We focus on the impact of reduction in dependent college tuition at various levels on employees' intentions to work harder and stay at their current job by using both OLS and Ordered Probit models. We also simulate the direct opportunity cost (reduction in revenue) in dollars and as a percent of total budgeted revenue to facilitate administrative decision making. The results provide evidence that for institutions where employee retention and productivity are a priority, maximizing or offering dependent college tuition waiver may be a relatively low-cost benefit to increase intended retention and productivity. In addition, the amount of the tuition waiver, number of dependents and annual salary are statistically significant predictors of intended increased productivity and intent to stay employed at the current institution. Employee retention and productivity is a challenge for all organizations. Although pay, benefits, and organizational culture tend to be key indicators of job satisfaction, little attention is given to specific types of benefits. This study is the first comprehensive attempt to explore the relationship between the impact of this low-cost employee benefit and employee performance and retention in a higher education institution in the United States.
    Keywords: higher education, retention, employee satisfaction, productivity, job satisfaction, fringe benefits
    JEL: J22 J32 J45 M52
    Date: 2015–06
  5. By: Ronald W. Anderson (London School of Economics and Political Science (LSE)); Cecilia Bustamante (London School of Economics and Political Science (LSE)); Stéphane Guibaud (London School of Economics and Political Science (LSE))
    Abstract: We study managerial incentive provision under moral hazard in a firm subject to stochastic growth opportunities. In our model, managers are dismissed after poor performance, but also when an alternative manager is better able to grow the firm. The optimal contract may involve managerial entrenchment, such that growth opportunities are foregone after good performance. Firms with better growth prospects have higher managerial turnover and more front-loaded compensation. The use of golden parachutes is suboptimal, unless the firm needs to incentivize its managers to truthfully report the arrival of growth opportunities. By ignoring the externality of the dismissal policy onto future managers, the optimal contract may imply excessive retention.
    Keywords: Agency; Firm growth; Managerial turnover
    Date: 2013–12
  6. By: Eduardo Fé; Mario Pezzino
    Date: 2015
  7. By: Krenn, Peter
    Abstract: This paper tries to answer the question how taxation of corporate and individual income affects competition among firms for highly-skilled human resources like CEOs. It shows that individual income taxes can perform a substantial impact on the outcome of such a competition if marginal tax rates are different like in an international labor market. Additionally, it presents the surprising result that in a local labor market for CEOs observed gross fixed salaries should decline in the individual income tax rate. The effects of taxation in a market for CEOs is in particular an interesting topic because recent developments with respect to compensation practices of top-level managers have opened a public debate about the use of instruments for regulating compensation of those managers. The investigation follows an analytical economics-based approach by extending an LEN type model of moral hazard with elements of competition and income taxation. It investigates the impact of differential taxation on the competition between two firms for the exclusive service of a unique, highly-skilled CEO.
    Keywords: CEO,taxes,competition for talents,skilled human resources
    JEL: D82 H24 H25 J31 J33 L13
    Date: 2015
  8. By: Kurt R. Brekke (Department of Economics, Norwegian School of Economics); Tor Helge Holmås (Uni Rokkan Centre and Health Economics Bergen); Karin Monstad (Uni Rokkan Centre and Health Economics Bergen); Odd Rune Straume (Universidade do Minho - NIPE)
    Abstract: We study whether and how physicians respond to financial incentives, making use of detailed register data on the health-care services provided to patients by general practitioners (GPs) in Norway over a six-year period (2006-11). To identify GPs' treatment responses, we exploit that specialisation in general medicine entitles the GPs to a higher consultation fee, implying a change in total and relative fee payments. To control for demand and supply factors related to becoming a specialist, we estimate a GP fixed effect model focusing on a narrow time window around the date of specialist certification. Our results show a sharp response by the GPs immediately after obtaining specialist certification and thus a higher consultation fee: the number of visits increase, while the treatment intensity (prolonged consultations, lab tests, medical procedures) decline. These findings are consistent with a theory model where (partly) profit-motivated GPs face excess demand and income effects are sufficiently small. Finally, we find no evidence for adverse health effects (measured by emergency care centre visits) on patients due to the change in GPs treatment behaviour after becoming a specialist.
    Keywords: General Practitioners; Fee-for-service; Profit-motivation
    JEL: H42 H51 I11 I18
    Date: 2015
  9. By: Palali, Ali (Tilburg University, Center For Economic Research)
    Abstract: This study investigates the effects of early smoking on educational attainment and<br/>labor market performance. The results show that early smoking adversely affects educational attainment and initial labor market performance, but only for males. The effect of early smoking on initial labor market performance is indirect through educational attainment. Moreover, for males only, early smoking has a negative effect on current labor market performance even after conditioning on education. For females neither education nor labor market performance is affected by early smoking.
    Keywords: early smoking; education; labor market performance; Mixed Proportional Hazards model; discrete factor approach
    JEL: C41 I19 J24 J31
    Date: 2015

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