nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2015‒09‒11
fourteen papers chosen by
Patrick Kampkötter
Universität zu Köln

  1. Decision Initiation, Decision Implementation, and the Allocation of Decision Rights By Randolph Sloof; Ferdinand A. von Siemens
  2. The Neglected Ethical and Spiritual Motivations in the Workplace By Manuel Guillén; Ignacio Ferrero; W. Michael Hoffman
  3. Does it matter which effort task you use? A comparison of four effort tasks when agents compete for a prize By Emanuela Lezzi; Piers Fleming; Daniel John Zizzo
  4. Team Incentives and Performance: Evidence from a Retail Chain By Friebel, Guido; Heinz, Matthias; Krüger, Miriam; Zubanov, Nikolay
  5. Team Production and the Allocation of Creativity across Global and Local Sectors By NAGAMACHI Kohei
  6. Advancing the Human Capital Perspective on Value Creation by Joining Capabilities and Governance Approaches By Mahoney, Joseph T.; Kor, Yasmine
  7. Unfair Wage Perceptions and Sleep: Evidence from German Survey Data By Pfeifer, Christian
  8. Human Capital-Economic Growth Nexus: A Causality Analysis for Pakistan By Khan, Jangraiz; Khattak, Naeem Ur Rehman Khattak; Khan, Amir
  9. Third-Party vs. Second-Party Control: Disentangling the role of autonomy and reciprocity. By Gabriel Burdin; Simon Halliday; Fabio Landini
  10. The determinants of the existence of a critical mass of women on boards: A discriminant analysis By Amélie Charles; Etienne Redor; Constantin Zopounidis
  11. The Response of Deferred Executive Compensation to Changes in Tax Rates By Aspen Gorry; Kevin A. Hassett; R. Glenn Hubbard; Aparna Mathur
  12. Does Public Sector Inefficiency Constrain Firm Productivity: Evidence from Italian Provinces By Raffaela Giordano; Sergi Lanau; Pietro Tommasino; Petia Topalova
  13. Quality provision and reporting when health care services are multi-dimensional and quality signals imperfect By Katharina Huesmann; Wanda Mimra
  14. “. . . Do it with joy!†– Subjective well-being outcomes of working in non-profit organizationsGerman laser industry By Martin Binder

  1. By: Randolph Sloof (University of Amsterdam, the Netherlands); Ferdinand A. von Siemens (Goethe University Frankfurt, Germany)
    Abstract: Organizations must not only take the right decisions, they must also ensure that these decisions are effectively implemented. Fama and Jensen (1983) argue that the same members of many organization are often responsible for both decision initiation and implementation. If these have social preferences, they might thus sabotage both project choices and implementation to express their discontent with the allocation of decision rights. How decisions come about also affects implementation if workers have reciprocal fairness concerns. Our experimental evidence demonstrates that the possibility to sabotage implementation leads to more delegation, but only if workers have high costs of obstructing informed decisions. We further find that the allocation of authority as such affects implementation.
    Keywords: Delegation; Implementation; Procedural Preferences; Reciprocity
    JEL: C91 D23 D86 L20
    Date: 2015–09–01
  2. By: Manuel Guillén (University of Valencia); Ignacio Ferrero (University of Navarra); W. Michael Hoffman (Bentley University)
    Abstract: Managing other people's work is filled with challenges, and among them, understanding what motivates people is essential. In order to pursue organizational objectives effectively and to develop skills and virtues that lead to flourishing in the workplace, motivation has to be properly understood and explained. This paper contends that the classical and most popular taxonomies describing employee motives and needs have either neglected or minimized the importance of the ethical and spiritual dimensions of motivation, resulting in a model of a person as self-interested, amoral and nonâ€spiritual. In this article, the authors attempt to overcome this idea through an integration of the areas of psychology, ethics and theology, offering an expanded taxonomy of motivation, focusing especially on the workplace, which explicitly includes morality and spirituality. This effort is a significant step toward articulating a more complete and accurate description of motivation that brings out the full dimensions of being human, which is conduciveto improved management practices leading to flourishing in the workplace, and fostering ethically healthier organizations.
    Date: 2014–10–01
  3. By: Emanuela Lezzi (University of Insubria); Piers Fleming (University of East Anglia); Daniel John Zizzo (Newcastle University)
    Abstract: Effort tasks are commonly used to assess individual investment and performance in an experimental setting. Although the tasks used are diverse, they are typically intended to be equivalent as far as they aim to generalize beyond the specific task. We compare an induced value effort task and three real effort tasks in a contest game. Results show that there is no equivalence across tasks in relation to how risk attitude, anxiety and gender predict performance.
    Keywords: effort tasks, experimental methodology, contests, induced value
    JEL: C72 C90 C91
    Date: 2015–04
  4. By: Friebel, Guido (Goethe University Frankfurt); Heinz, Matthias (University of Cologne); Krüger, Miriam (Goethe University Frankfurt); Zubanov, Nikolay (Goethe University Frankfurt)
    Abstract: We test the effectiveness of team incentives by running a natural field experiment in a retail chain of 193 shops and 1,300 employees. As a response to intensified product market competition, the firm offered a bonus to shop teams for surpassing sales targets. A bonus to teams rather than individuals was a natural choice because the firm does not measure individual performance and relies on flexible task allocation among employees. On average, the team bonus increases sales and customer visits in the treated shops by around 3%, and wages by 2.3%. The bonus is highly profitable for the firm, generating for each bonus dollar an extra $3.80 of sales, and $2.10 of operational profit. The results show the importance of complementarities within teams and suggest that improved operational efficiency is the main mechanism behind the treatment effect. Our analysis of heterogeneous treatment effects offers a number of insights about the anatomy of teamwork. The firm decided to roll out the bonus to all of its shops, and the performance of treatment and control shops converged after the roll-out.
    Keywords: management practices, randomized controlled trial (RCT), natural field experiment, insider econometrics
    JEL: J3 L2 M5
    Date: 2015–08
  5. By: NAGAMACHI Kohei
    Abstract: This paper introduces team production into a two-sector Ricardian comparative advantage model having two types of agents, high-skilled and low-skilled, each with comparative advantage in one of the two sectors under self-production. A team is an organization in which one high-skilled agent manages low-skilled workers, allowing the latter to use their manager's knowledge, and thus resulting in a more efficient outcome than self-production. This paper conducts a comparative statics analysis to understand how the allocation of the high-skilled agents in a sector in which they do not have comparative advantage under self-production is affected by team production in that sector. The analysis provides two implications: First, team production changes the nature of comparative advantage, possibly leading to reallocation of the high-skilled agents from the sector for which they initially have comparative advantage to the other sector where the environment of team production improves. Second, the likelihood of shift is limited, and, in the case of shift, non-monotonic dynamics are likely to occur; namely, if a shift occurs, then redispersion follows.
    Date: 2015–09
  6. By: Mahoney, Joseph T. (University of IL); Kor, Yasmine (University of SC)
    Abstract: This paper elaborates on how the human capital perspective on value creation can be advanced by joining the capabilities and governance approaches. Investments in firm-specific human capital can be an important pathway to building and enhancing a firm's core competencies. Thus, it is vital to build mechanisms and systems that encourage the development and safeguarding of these human capital-based capabilities. Our paper unpacks the notion of firm-specific human capital and presents a view on why this form of human capital especially matters in today's business context. We review pitfalls and shortcomings of a traditional shareholder model and its likely impacts on investments in firm-specific human capital. Finally, we discuss mechanisms by which the firm-specific human capital development process can be stimulated and protected.
    Date: 2014
  7. By: Pfeifer, Christian (Leuphana University Lüneburg)
    Abstract: The author uses large-scale German survey data for the years 2009, 2011 and 2013 in order to analyze the nexus between the individual perception of being unfairly paid and measures for quantity and quality of sleep, namely, hours of sleep during workweek and during weekend, happiness with sleep, and sleep disorders diagnosed by a doctor. Main findings of the regression analysis are that workers, who perceive their own wage as unfair, sleep significantly less during the workweek (1.2 to 2.5 percent), are significantly less satisfied with their sleep (1 to 5 percent) and are significantly more likely to have sleep disorders (7 to 36 percent). Moreover, workers with more weekly working hours sleep significantly less during the workweek (0.1 to 0.2 percent per hour) and are significantly less satisfied with their sleep (0.1 to 0.2 percent per hour). The size of the hourly wage is however not significantly correlated with any of the sleep outcomes and the household income seems also of minor importance, even though the estimated coefficients have the expected signs implied by substitution and income effects. The overall results suggest that unfair wage perceptions, which are related to stress, negatively affect workers' sleep and, consequently, their health.
    Keywords: fairness, health, income, sleep quantity, sleep quality, wage, working hours
    JEL: I12 J22 J31
    Date: 2015–08
  8. By: Khan, Jangraiz; Khattak, Naeem Ur Rehman Khattak; Khan, Amir
    Abstract: This paper concentrates on the role of human capital in economic growth of Pakistan during the period 1971-2012.Granger Causality test has been used as analytical technique for this purpose. The study used research and development (R&D), education and health as proxies for human capital. The results confirm the role of human capital in the economic growth of the study area. The results show that human capital in form of research and development (R&D) Granger caused economic growth during the study period. Moreover, unidirectional causal relationships exist among different levels of education, physical capital, R&D and economic growth. Realizing the significance of human capital for sustained economic growth of the country, it is suggested to increase investment in R&D, health and education sector of Pakistan.
    Keywords: Causality, Human Capital, Research and Development, Physical Capital, Economic Growth
    JEL: E24 J2 J21 O32 O47 O49
    Date: 2015–04
  9. By: Gabriel Burdin (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Simon Halliday (Smith College (United States). Department of Economics); Fabio Landini (Bocconi University (Italy). Department of Political Science)
    Abstract: This paper studies the role of autonomy and reciprocity in explaining control averse responses in principal-agents interactions. While most of the social psychology literature emphasizes the role of autonomy, recent economic research has provided an alternative explanation based on reciprocity. We propose a simple model and an experiment to test the relative strength of these two motives. We compare two treatments: one in which control is exerted directly by the principal (second-party control); and the other in which it is exerted by a third party enjoying no residual claimancy rights (third-party control). If control aversion is driven mainly by autonomy, then it should persist in the third-party treatment. Our results, however, suggest that this is not the case. Moreover, when a third party instead of the principal exerts control, control results in a greater expected profit for the principal. The implications of these results for organizational design are discussed.
    Keywords: third-party, second-party, control aversion, autonomy, principal-agent game, social preferences, trust, reciprocity
    JEL: C72 C91 D23 M54
    Date: 2015–09
  10. By: Amélie Charles (Audencia Recherche - Audencia); Etienne Redor (Audencia Recherche - Audencia); Constantin Zopounidis (Audencia Recherche - Audencia)
    Abstract: This article contributes to the literature by examining the determinants of the existence of a critical mass of women on boards. As critical mass theory suggests, the mere presence of women on boards may not be sufficient to bring significant change to the boardroom and to improve corporate governance. While studying the determinants of female presence on boards is useful, it may be helpful to study what are the characteristics of firms that have a sufficient number of women to enhance governance. In this paper, we study the predictors of the existence of a critical mass of women on S&P 100 boards between 1995 and 2010. We show that firms with at least three female directors have larger boards, are larger, are more likely to be run by a female CEO and have a greater proportion of non-Caucasian directors. On the contrary, we were not able to show significant differences in firm performance and board independence between firms with and without a critical mass of women on their boards.
    Date: 2015–08
  11. By: Aspen Gorry; Kevin A. Hassett; R. Glenn Hubbard; Aparna Mathur
    Abstract: Given the increasing use of stock options in executive compensation, we examine how taxes influence the choice of compensation and document that income deferral is an important margin of adjustment in response to tax rate changes. To account for this option in the empirical analysis, we explore deferral by estimating how executives’ choice of compensation between current and deferred income depends on changes in tax policy. Our empirical results suggest a significant impact of taxes on the composition of executive compensation.
    JEL: G30 H24 H32 J33
    Date: 2015–09
  12. By: Raffaela Giordano; Sergi Lanau; Pietro Tommasino; Petia Topalova
    Abstract: This paper studies the effect of public sector efficiency on firm productivity using data from more than 400,000 firms across Italy’s provinces. Exploiting the large heterogeneity in the efficiency of the public sector across Italian provinces and the intrinsic variation in the dependence of industries on the government, we find that public sector inefficiency significantly reduces the labor productivity of private sector firms. The results suggest that raising public sector efficiency could yield large economic benefits: if the efficiency in all provinces reached the frontier, output per employee for the average firm would increase by 9 percent.
    Keywords: Italy;public sector efficiency, firm productivity, public, public sector, government, General
    Date: 2015–07–21
  13. By: Katharina Huesmann (University of Cologne, Germany); Wanda Mimra (ETH Zurich, Switzerland)
    Abstract: We model competition for a multi-attribute health service where patients observe attribute quality imprecisely before deciding on a provider. High quality in one attribute, e.g. medical quality, is more important for ex post utility than high quality in the other attribute. Providers can shift resources to increase expected quality in some attribute. Patients rationally focus on attributes depending on signal precision and beliefs about the providers’ resource allocations. When signal precision is such that patients focus on the less important attribute, any Perfect Bayesian Nash Equilibrium is inefficient. Increasing signal precision can reduce welfare, as the positive effect of better provider selection is overcompensated by the negative effect that a shift in patient focusing has on provider quality choice. We discuss the providers’ strategic reporting incentives and reporting policies. Under optimal reporting, signals about the important attribute are always published. However, banning reporting on less important attributes might be necessary.
    Keywords: multi-attribute good, quality signals, focusing, reporting
    JEL: I11 D83 L10
    Date: 2015–09
  14. By: Martin Binder (Martin BinderBard College Berlin, Platanenstr. 24, 13156 Berlin, Germany)
    Abstract: Working in non-profit organizations has been shown to be good for individuals'satisfaction with their jobs despite lower incomes. This paper explores the impact of non-profit work on life satisfaction more general for the British Household Panel Survey (BHPS) and finds a significant positive impact the size about more than a fourth of that of getting widowed. This effect is quite uniform across the subjective well-being distribution, and thus exists also for those who are already happy. Shadow prices peg this effect at around 22.000 GBP p.a., nearly the average amount of equivalent net household income in the sample analyzed (which is roughly 27.000 GBP p.a.). The positive effect can be explained by third sector workers enjoying their day-to-day activities more, being more happy (affectively) and feeling that they are playing a useful role in their lives.
    Keywords: subjective well-being, non-profit organization, life satisfaction, BHPS, job satisfaction
    JEL: I31
    Date: 2015–09–09

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