nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2015‒11‒01
twelve papers chosen by
Patrick Kampkötter
Universität zu Köln

  1. Do Female Executives Make a Difference? The Impact of Female Leadership on Gender Gaps and Firm Performance By Luca Flabbi; Mario Macis; Andrea Moro; Fabiano Schivardi
  2. Toxic Workers By Michael Housman; Dylan Minor
  3. Female directors, key committees, and firm performance By Colin Green; Swarnodeep Homroy
  4. Grit Trumps Talent? An experimental approach By Gerhards, Leonie; Gravert, Christina
  5. Driving Forces for the Professionalisation of Human Resource Management in South Africa By Nico Schutte
  6. Quit Turnover and the Business Cycle: A Survey By Carillo-Tudela, Carlos; Coles, Melvyn
  7. Prizes versus Contracts as Incentives for Innovation By Yeon-Koo Che; Elisabetta Iossa; Patrick Rey
  8. Human capital and firm?s propensity to relocate: do jobs follow people? By Gintare Morkute
  9. Prejudice and Racial Matches in Employment By Bond, Timothy N.; Lehmann, Jee-Yeon K.
  10. An empirical example of spatial process of productivity growth in NUTS 2 regions By Alicja Olejnik; Jakub Olejnik
  11. Maintenance and enhancement of employees’ employability in the changing public sector By Izabela Marzec
  12. Factors affecting the application of talent management By Emmerentia Nicolene Barkhuizen; Nico Eric Schutte

  1. By: Luca Flabbi (Inter-American Development Bank); Mario Macis (Johns Hopkins University); Andrea Moro (Università Ca’ Foscari di Venezia); Fabiano Schivardi (Bocconi University)
    Abstract: We analyze a matched employer-employee panel data set and find that female leadership has a positive effect on female wages at the top of the distribution, and a negative one at the bottom. Moreover, performance in firms with female leadership increases with the share of female workers. This evidence is consistent with a model where female executives are better equipped at interpreting signals of productivity from female workers. This suggests substantial costs of under-representation of women at the top: for example, if women became CEOs of firms with at least 20% female employment, sales per worker would increase 6.7%.
    Keywords: executives’ gender, gender gap, firm performance, glass ceiling, statistical discrimination
    JEL: M5 M12 J7 J16
    Date: 2015
  2. By: Michael Housman (Cornerstone OnDemand); Dylan Minor (Harvard Business School, Strategy Unit)
    Abstract: While there has been a lot of research on finding and developing top performers in the workplace, less attention has been paid to the question of how to manage those workers who are harmful to organizational performance. In extreme cases, in addition to hurting performance, such workers can generate enormous regulatory and legal liabilities for the firm. We explore a large novel dataset of over 50,000 workers across 11 different firms to document a variety of aspects of workers' characteristics and circumstances that lead them to engage in "toxic" behavior. We also find that avoiding a toxic worker (or converting him to an average worker) enhances performance to a much greater extent than replacing an average worker with a superstar worker.
    Keywords: human resource management, misconduct, worker productivity, ethics, superstar
    Date: 2015–10
  3. By: Colin Green; Swarnodeep Homroy
    Abstract: There is pressure to increase female representation on corporate boards. A number of studies have found no, or in some cases a negative, effect of female representation on boards and firm performance. We demonstrate robust positive and economically meaningful effects on firm performance of female representation on European boards.<br/>Moreover, while previous work has considered female representation broadly, we focus on membership of committees involved explicitly in firm governance. We demonstrate marked, larger, e¤ects on performance of having female representation on these committees. Finally, we reconcile this evidence with prior US and UK evidence and demonstrate a positive performance impact of female committee memberships. Our evidence is supportive of the expansion of female involvement in corporate governance from a financial performance perspective.
    Keywords: Board of directors, Female director, Diversity, Performance
    JEL: G30 G34 J16
    Date: 2015
  4. By: Gerhards, Leonie (Department of Economics and Business Economics, Aarhus University); Gravert, Christina (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Perseverance to accomplish long-term goals, also know as grit, is a crucial determinant for success in life. In the present study we introduce an innovative laboratory design to elicit grit in an incentivized and controlled way. Subjects work on a computerized task to solve anagrams. By observing their decision not to shirk, we measure their grittiness experimentally. We find that the original questionnaire measure of grit developed by Duckworth et al. (2007) is significantly correlated with our new experimental measure - even when controlling for ability and a questionnaire measure of self-control. Moreover, subjects' earnings increase in their experimentally elicited grit.
    Keywords: Grit; perseverance; laboratory experiment; real-effort task
    JEL: C91 D03 J24 M50
    Date: 2015–10
  5. By: Nico Schutte (Department of Public Administration, North-West University)
    Abstract: The debate regarding the status of human resource management in South Africa and its standing as a managerial profession has been a burning issue for practitioners over the last decade. Research evidence suggests that South African Human Resources practitioners are convinced that their value-added status as HR `professionals' will only transpires through the reinvention of the South African human resources management profession. This article examines how South African HR managers and practitioners interpret professionalisation and whether the internalization of this ideal results in an increase in professional identity. The findings suggest that while many HR practitioners and managers gain greater self-worth and understanding of professional identity, this does not equate to a broader acceptance by the broader community as a member of a `profession'. This paper concludes with a framework to guide the professionalisation of HR practitioners in the South African workplace.
    Keywords: Human resource practitioners, Professionalisation, Work identity
    JEL: J24
  6. By: Carillo-Tudela, Carlos (University of Essex, CEPR, CESifo and IZA); Coles, Melvyn (University of Essex)
    Abstract: Workers might change jobs for many reasons. They might fall out with the boss and so decide to change employer, or learn that the job is not really for them, or they might accept a poorly paid job as being preferable to being unemployed - say gathering work experience improves one's CV - and continue search for something better while employed. A slightly different reason is that some firms may hit a sticky patch and, fearing the risk of layoff, employees quit to more permanent employment elsewhere. A competitive labor market ensures such quit turnover is efficient: it reallocates workers from less to more productive matches. In non-competitive labor markets, however, firms always have the incentive to increase profit by paying a wage below marginal product while, in the absence of slavery contracts, employees always retain the option of quitting to better paid employment. The interaction between these two forces need not generate efficient outcomes. The focus of this chapter is to consider new develpments in the search and matching literature where wages, quit turnover and unemployment are endogenously determined in economies with aggregate shocks. The aim of the discussion is not only to highlight possible market failures but also to explain how on-the-job search and employee turnover fundamentally affect our understanding of fluctuations in aggregate employment.
    Date: 2015–10
  7. By: Yeon-Koo Che (Department of Economics, Columbia University); Elisabetta Iossa (DEF and CEIS,University of Rome Tor Vergata, CEPR, IEFE-Bocconi and EIEF); Patrick Rey (Toulouse School of Economics, GREMAQ, IDEI and CEPR)
    Abstract: The procurement of an innovation involves motivating a research effort to generate a new idea and then implementing that idea efficiently. If research efforts are unverifiable and implementation costs are private information, a trade-off arises between the two objectives. The optimal mechanism resolves the tradeoff via two instruments: a monetary prize and a contract to implement the project. The optimal mechanism favors the innovator in contract allocation when the value of innovation is above a certain threshold, and handicaps the innovator in contract allocation when the value of innovation is below that threshold. A monetary prize is employed as an additional incentive but only when the value of innovation is sufficiently high.
    Keywords: Contract rights, Inducement Prizes, Innovation, Procurement and R&D.
    JEL: D44 H57 D82 O31 O38 O39
    Date: 2015–10–22
  8. By: Gintare Morkute
    Abstract: This paper examines the role that human capital plays in firm?s strategic decisions. It focuses on long-distance corporate relocations which present certain trade-offs in terms of human capital and modifies firms? relationship with the labour force. It is assessed to what extent having (an access to) employees with desired characteristics can deter firm?s relocation and to what extent the relocating firms upgrade their (access to) workforce. Based on literature analysis, three aspects of human capital are identified as creating value to the firm: 1) skill level of employees, 2) quality of job matches, characterised by firm-specificity and embeddedness of human capital, 3) accessibility of external labour force. The role of all three aspects as both keep and pull factors is tested using register data on single-plant firms in the Netherlands in 2006-2011. The results demonstrate that firms show a strong attachment to the employees and retaining labour force is an important consideration of relocating firms. Long-distance relocations are infrequent and they happen predominantly among firms that have very long commuting and hiring distances already before the relocation, which indicates low dependence on the local labour markets and enables long moves with little increase to the employees? commutes. Firms are neither kept put by having employees with high skill level nor do they use relocation to upgrade the skill level. The quality of job matches and access to external workforce affect firm?s relocation decisions, but only as keep factors. The asymmetry between their role in keeping firms put and attracting firms is indicative of footloose firms being indifferent to local differentials pertaining to human capital rather than being motivated by them. It also suggests that (access to) human capital primarily has an anchoring role as the complex relationships linking firms to both internal and external labour force cannot be easily replicated elsewhere or well estimated before the relocation. The paper is concluded by noting that in the case of firm relocation human capital differentials do not contribute to redistribution of employment; rather it is one of the forces that maintain the present job distribution. Firms are rooted due to the human capital they have; they tend not to search opportunistically for greener pastures. Skill level of the employees has no bearing on this rootedness, rather it is determined by the culture and human resource practices of the firm itself as well as by its dependence on the local labour markets. The findings suggest that in understanding how human capital creates value more attention should be paid not only to cognitive/physical/other abilities of an individual, but also the context-specific possible uses for them.
    Keywords: firm relocation; mobility; human capital; human resources; do jobs follow people
    JEL: J23 J24 R12 R30
    Date: 2015–10
  9. By: Bond, Timothy N.; Lehmann, Jee-Yeon K.
    Abstract: We develop a search model in which some employers hold unobservable racial prejudice towards black workers. Prejudiced employers may refuse to hire and may terminate black workers based on their prejudice. Workers do not observe employer prejudice, but they observe the race of their potential supervisor at the firm, which serves as a signal of the employer's prejudice. Jobs in firms with black supervisors hold higher option value for black workers, because they are less likely to face prejudice-based termination. Hence, black workers are willing to accept employment with lower expected match quality from firms with black supervisors. We derive theoretical predictions on differences in observed wages and job stability across supervisor race and prejudice levels. We find empirical support for our predictions using a unique longitudinal dataset with information on the worker's supervisor race matched with state-level measures of prejudice.
    Keywords: prejudice; discrimination; supervisor race
    JEL: J64 J7 J71
    Date: 2015–10–28
  10. By: Alicja Olejnik; Jakub Olejnik
    Abstract: This paper is an attempt to explain variations across EU regions in productivity growth and takes into consideration the important structure of the age-productivity relation of Human Capital. The study is fundamentally based on the theory of Fingleton?s model which analyses the spatial process of productivity growth on the on the foundations of the theory of New Economic Geography. The applied specification links manufacturing productivity growth to the growth of manufacturing output by the means of Verdoorn?s law. The model incorporates productivity-adjusted human capital understood as Total Human Capital Productivity corrected with age structure with the use of productivity as a function of age. Moreover, a new approach to defining the age-productivity curve has been introduced. Based on the previous studies found in the literature the age-productivity function has been interpolated by the means of Radial Basis Function method with thin-plate spline. The age-productivity function allows to describe how the work performance differs over the life period and thus allows for differences in age structure of employees in regions under research. This study covers 261 NUTS 2 regions of EU excluding some French, Portuguese and Spanish regions due to their isolated position and Croatia because of the lack of comparable data. All data used in the empirical part of this study are published by Eurostat and refer to the years 2000-2013. The regional productivity is explained by the quotient of regional GDP and the number of Economically Active Population. The productivity growth is approximated by the exponential change of regional productivity in these years to regional productivity in the year 2000. The regional GDP is expressed in millions of Euro in constant prices (year 2000), where Economically Active Population is in thousands of people 15 years or over. The Human capital is defined by the Employment in Technology and Knowledge-intensive Sectors as a percentage of Economically Active Population. The model has been tested through implemented methodology, namely a spatial panel model with fixed effects. The model presented provides evidence of the importance of increasing returns to scale for regional economic growth, which lead to divergence effects for EU regions. Similar implications can be observed in the case of regionally differentiated human capital. Furthermore, the country fixed effects turned out to be significant. The findings also suggest that productivity in jobs requiring problem solving and learning skills reaches a plateau for the 35-45 age bracket and has its peak around the age of 40. We suggest that the applied approach constitutes an innovation providing additional information hence a deeper analysis of the investigated problem.
    Keywords: spatial panel; productivity growth; Verdoorn?s law; age-productivity curve
    JEL: O40 J24 C21 C23
    Date: 2015–10
  11. By: Izabela Marzec (University of Economics in Katowice)
    Abstract: Topic and purposeTransformation of the public sector and spread of contract-based arrangements make the traditional approach to employee development less effective in contemporary public organizations. Simultaneously, many researchers point to the necessity of employability enhancement for employees’ long-term career development. However, knowledge about employees’ employability and factors influencing it in the public organizations is still limited. The purpose of this paper is to answer the following questions: what factors determine employees’ employability in the public sector and what are the conditions of its maintenance and enhancement in the Polish public organizations.MethodThe aims of the paper are realized by presenting the results of the literature study based on the comparison of approaches to employability in the private sector with the reality of the Polish public organizations’ functioning, which is provided in the context of the changes in the practice of HRM in the public sector. The paper reviews concepts of employability and considers how they have evolved over time. It also explains why employability of employees has become a subject of interest in the changing public organizations and seeks to identify factors which decide about employees’ employability and conditions of its maintenance and enhancement in Polish public organizations.FindingsThe conducted literature study shows that employability is a complex phenomenon, which can be analyzed from different but interconnected perspectives, i.e. the individual, organizational and socio-economic perspectives. It was also found that transformation of public organizations, change of the required profile of employees’ competences and new conditions of the psychological contract result in difficult challenges to employees, which they will be able to face only if they continuously enhance their employability. However, public organizations should support them in these efforts.OriginalityThe downsizing of public employment and the requirements for human resources flexibility, which are accompanied with the difficult situation on the labour market, made maintenance and enhancement of employability of public sector employees’ become an important problem, not only on the individual level but also on organizational and social levels. The paper provides deeper insight into specific factors determining employability of public sector employees as well as conditions of its enhancement distinctive for public organizations. It should be noted that these issues have been mostly examined in the context of commercial organizations. *The project was funded from the resources of the National Science Centre (Poland) granted by the decision no. DEC-2013/11/B/HS4/00561.
    Keywords: employability, human resource development, public sector
    JEL: J24 J45 O15
  12. By: Emmerentia Nicolene Barkhuizen (North-West University); Nico Eric Schutte (North-West University)
    Abstract: The field of talent management has received considerable attention in management and practitioner literature over the past two decades. Most scholars are in agreement that talent is a key to the sustainability and competitiveness of any country. However empirical research on talent management and its potential contribution in Southern Africa is limited. This paper reports on the available research of the significance of talent management and the subsequent factors affecting the effective application thereof in South African organisations. This paper is motivated from the fact that Southern Africa as a developing continent is in need of effective talent management for sustainable growth and economic development.Our research shows that a great diversion of opinion still exists on a suitable definition for “talent”. As a result managers and practitioners are challenged to apply an inclusive versus and exclusive approach to talent management. Moreover our findings also highlight that management commitment towards talent remains a fundamental problem in many Southern African organisations and have a subsequent impact on the retention of scarce skills.The effective implementation and execution of talent management practices requires the adherence to legislative policies and frameworks. Our research paints a bleak picture as far as the effective and ethical applications of labour legislation towards talented employees are concerned. Gender inequality is slow to be eradicated in male dominated work environments. Age differentials prevail with talent management practices being mostly focused on Generation X employees as opposed to an older generation workforce. Talent Management also have a significant impact on individual and organisational level outcomes. We found that that poor talent management practices have a negative impact on psychological contracts, organisational commitment, work engagement, motivation, job satisfaction, happiness, meaningfulness, well-being, and retention of employees in various settings. For the organisation talent management can result in improved employee performance and subsequent quality of service delivery. In conclusion we present an integrated talent management strategy that provides a holistic guideline for how to apply the talent management process from start to finish.
    Keywords: Economic growth, Legal compliance, Talent, Talent Management
    JEL: J24

This nep-hrm issue is ©2015 by Patrick Kampkötter. 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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