nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2015‒11‒15
seventeen papers chosen by
Patrick Kampkötter
Universität zu Köln

  1. Gender and the Effect of Working Hours on Firm-Sponsored Training By Picchio, Matteo; van Ours, Jan C.
  2. Boss Competence and Worker Well-being By Artz, Benjamin; Goodall, Amanda H; Oswald, Andrew J
  3. A Theory of Intra-Firm Group Design By Tumen, Semih
  4. Network Effects on Worker Productivity By Lindquist, Matthew; Sauermann, Jan; Zenou, Yves
  5. Preaching water but drinking wine? Relative performance evaluation in international banking By Dragan Ilić; Sonja Pisarov; Peter S. Schmidt
  6. The Role of Verifiability and Privacy in the Strategic Provision of Performance Feedback: Theory and Experimental Evidence By Seda Ertac; Levent Kockesen; Duygu Ozdemir
  7. Temporary employment, demand volatility and unions: Firm-level evidence By Francesco Devicienti; Paolo Naticchioni; Andrea Ricci
  8. Competitiveness and the gender gap among young business professionals By Reuben, Ernesto; Sapienza, Paola; Zingales, Luigi
  9. Endogenous divorce and human capital production By Amanda Gosling; Maria D. C. Garcia-Alonso
  10. Information Acquisition, Referral, and Organization By Simona Grassi; Ching-To Albert Ma
  11. Genetic Distance and Cognitive Human Capital: A Cross-National Investigation By Kodila-Tedika, Oasis; Asongu, Simplice
  12. Do Treatment Decisions Depend on Physicians` Financial Incentives? By Kurt R. Brekke; Tor Helge Holmäs; Karin Monstad; Odd Rune StraumeAuthor-Email: o.r.straume@eeg.uminho.p
  13. Inventors' Mobility and Organizations' Productivity: Evidence from Japanese rare name inventors By SAITO Yukiko; YAMAUCHI Isamu
  14. Does performance disclosure influence physicians’ medical decisions? An experimental study* By Godager, Geir; Hennig-Schmidt, Heike; Iversen, Tor
  15. Are Entrepreneurs more Optimistic and Overconfident than Managers and Employees? By Martin Koudstaal; Randolph Sloof; Mirjam van Praag
  16. Conditions for developing a successful Talent Management Strategy By Mickaël Naulleau
  17. Incentives for Motivated Experts in a Partnership By Ting Liu; Ching-To Albert Ma; Henry Y. Mak

  1. By: Picchio, Matteo (Università Politecnica delle Marche, Ancona); van Ours, Jan C. (Tilburg University)
    Abstract: Using employees' longitudinal data, we study the effect of working hours on the propensity of firms to sponsor training of their employees. We show that, whereas male part-time workers are less likely to receive training than male full-timers, part-time working women are as likely to receive training as full-time working women. Although we cannot rule out gender-working time specific monopsony power, we speculate that the gender-specific effect of working hours on training has to do with gender-specific stereotyping. In the Netherlands, for women it is common to work part-time. More than half of the prime age female employees work part-time. Therefore, because of social norms, men working part-time could send a different signal to their employer than women working part-time. This might generate a different propensity of firms to sponsor training of male part-timers than female part-timers.
    Keywords: part-time employment, working hours, firm-sponsored training, gender, human capital
    JEL: C33 C35 J24 M51 M53
    Date: 2015–11
  2. By: Artz, Benjamin (University of Wisconsin at Oshkosh); Goodall, Amanda H (Cass Business School, City University London, and IZA); Oswald, Andrew J (Department of Economics University of Warwick, CAGE and IZA)
    Abstract: Nearly all workers have a supervisor or ‘boss’. Yet little is known about how bosses influence the quality of employees’ lives. This study is a cautious attempt to provide new formal evidence. First, it is shown that a boss’s technical competence is the single strongest predictor of a worker’s job satisfaction. Second, it is demonstrated in longitudinal data -- after controlling for fixed effects -- that even if a worker stays in the same job and workplace a rise in the competence of a supervisor is associated with an improvement in the worker’s well-being. Third, a variety of robustness checks, including tentative instrumental-variable results, are reported. These findings, which draw on US and British data, contribute to an emerging literature on the role of expert leaders in organizations. Finally, the paper discusses potential weaknesses of existing evidence and necessary future research.
    Keywords: bosses ; expert leaders ; leadership ; job satisfaction ; happiness
    JEL: I31 J28 M54
    Date: 2015
  3. By: Tumen, Semih (Central Bank of Turkey)
    Abstract: I develop an intra-firm theory of group design and teamwork in the presence of peer effects. The purpose is to understand the interlinkages between intra-firm group formation and the extent of wage dispersion within the firm. Given a set of heterogeneous workers, the manager faces the challenge of allocating workers into endogenous groups (or teams) to maximize total profits. The optimal allocation features locational proximity between workers with similar productivity levels. I discuss the implications of this allocation on intra-firm wage outcomes. The main idea is that the wage paid to a single worker is determined by the productivity levels of the teammates as well as the worker's own productivity. This means that team composition is critical to understanding the within-firm productivity and wage differentials. I show that intra-firm wage dispersion is more pronounced when workers are more alike within each team and more different across the teams. I provide numerical exercises designed to illustrate how the model's predictions change as the key parameters are varied. One striking result is that a rise in the correlation between education and productivity (this can be interpreted as hiring workers with vocational education) leads to a decline in wage inequality within the firm. I also show that changes in the dispersion of worker efficiency lead to non-monotonic effects on within-firm wage inequality.
    Keywords: group design, peer effects in the workplace, within-firm pay differences, sorting, selectivity
    JEL: J31 L22 L23 M51 M52
    Date: 2015–11
  4. By: Lindquist, Matthew; Sauermann, Jan; Zenou, Yves
    Abstract: We use data from an in-house call center of a multi-national mobile network operator to study how co-worker productivity affects worker productivity via network effects. We also exploit data from a field experiment to analyze how exogenous changes in worker productivity due to on-the-job training affect co-worker productivity, including non-trained workers. We show that there are strong network effects in co-worker productivity. This effect is driven by conformist behavior. We also show that exposure to trained workers increases the productivity of non-trained workers. This effect works through strategic complementarities (knowledge spillovers). We demonstrate how our network model of worker productivity can be used to inform a variety of practical decisions faced by personnel managers including the design of optimal training policy.
    Keywords: on-the-job training; peer effects; social networks; worker productivity
    JEL: J24 M53 Z13
    Date: 2015–11
  5. By: Dragan Ilić; Sonja Pisarov; Peter S. Schmidt
    Abstract: Relative performance evaluation (RPE) is, at least on paper, enjoying widespread popularity in determining the level of executive compensation. Yet existing empirical evidence of RPE is decidedly mixed. Two principal explanations are held responsible for this discord. A constructional challenge arises from intricacies of identifying the correct peers. And on a simpler note, corporate commitments to RPE could be mere exercises in empty rhetoric. We address both issues and test the use of RPE in a new sample of large international non-U.S. banks. Taken as a whole, the banks in our sample show moderate evidence consistent with RPE. We report stronger evidence once we investigate the subsample of banks that disclose the use of peers in their compensation schemes. This finding lends support to the credibility and thus informational value of RPE commitments. Digging deeper, we conclude that RPE usage is driven by firm size and growth options.
    Keywords: Relative performance evaluation, executive compensation, peers, banks, disclosure
    JEL: J33 D86 G3 G21
    Date: 2015–10
  6. By: Seda Ertac (Department of Economics, Koç University); Levent Kockesen (Department of Economics, Koç University); Duygu Ozdemir (Institute for Social and Economic Research, University of Essex)
    Abstract: We theoretically and experimentally analyze the role of verifiability and privacy in strategic performance feedback using a “one principal-two agent” context with real effort. We confirm the theoretical prediction that information transmission occurs only in verifiable feedback mechanisms and private-verifiable feedback is the most informative mechanism. Yet, subjects also exhibit some behavior that cannot be explained by our baseline model, such as telling the truth even when this will definitely hurt them, interpreting “no feedback” more optimistically than they should, and being influenced by feedback given to the other agent. We show that a model with individual-specific lying costs and naive agents can account for some, but not all, of these findings. We conclude that in addition to being naive, some agents also suffer from self-serving biases and engage in non-Bayesian social comparisons in their interpretation of performance feedback.
    Keywords: Lab experiments, Performance feedback, Strategic communication, Cheap talk, Persuasion, Multiple audiences, Lying.
    JEL: C72 C92 D23 D82 D83 M12 M54
    Date: 2015–11
  7. By: Francesco Devicienti; Paolo Naticchioni; Andrea Ricci
    Abstract: This paper investigates the effect of workplace unionization and product market volatility on firms' propensity to use temporary employment. Using Italian firm level data, we show that unionization and volatility have a positive impact on the share of temporary contracts. However, as volatility increases the union effect becomes negative, suggesting that in a highly volatile economic environment unions may be concerned about the weakening of their bargaining power associated with an extensive use of temporary workers. Furthermore, these effects are at work only for the use of non-training temporary contracts, while training temporary contracts are not affected by unions, volatility and their interplay. We argue that this occurs because non-training temporary contracts can be used by firms as a buffer stock to cope with uncertainty and by unions to protect insiders, while training temporary contracts are more likely to be used as a screening device for future permanent positions.
    Keywords: unions, temporary workers, training, product demand volatility, firms
    JEL: J51 J23 J24
    Date: 2015
  8. By: Reuben, Ernesto; Sapienza, Paola; Zingales, Luigi
    Abstract: Using an incentivized measure of test for competition, this paper investigates whether this taste explains subsequent gender differences in earnings and industry choice in a sample of high-ability MBA graduates. We find that “competitive” individuals earn 9% more than their less competitive counterparts do. Moreover, gender differences in taste for competition explain around 10% of the overall gender gap. We also find that competitive individuals are more likely to work in high-paying industries nine years later, which suggests that the relation between taste for competition and earnings persists in the long run. Lastly, we find that the effect of taste for competition emerges over time when MBAs and firms interact with each other.
    Keywords: business career; gender differences; gender gap; taste for competition
    JEL: C93 D81 D84 I21 J16
    Date: 2015–11
  9. By: Amanda Gosling; Maria D. C. Garcia-Alonso
    Abstract: This paper presents a model of parental decision making where parents care about consumption and the human capital of the children. Preferences over these goods can differ within households. Parents will agree to cooperate (stay married) if the utility they get from coordinating time inputs (ie child care or paid employment) is greater than they would get if they acted independently. The gain to cooperation arises because parental time inputs are not perfect substitutes in the production of the child's human capital, the cost is that when preferences differ, the chosen time allocations under cooperation may be very different to those chosen independently. Our model predicts that the human capital of children can both increase and fall after divorce. Divorce, if it occurs, will be instigated by the parent who cares most about the child, the parent that cares least about the child will never opt for divorce. This can explain the apparent contradiction that mothers are more likely than fathers to initiate divorce beyond infant age even though the traditional household literature presents women as home makers and ever devoted to household production.
    Keywords: collective model; human capital; divorce
    JEL: C79 D19 J12 J22
    Date: 2015–10
  10. By: Simona Grassi (Universite de Lausanne); Ching-To Albert Ma (Boston University)
    Abstract: Each of two experts may provide a service to a client. Experts' cost comparative advantage depends on an unknown state, but an expert may exert effort to get a private signal about it. In a market, an expert may refer the client to the other for a fee. In equilibrium, only one expert exerts e§ort and refers, and the equilibrium allocation is ine¢ cient. Referral efficiency can be restored when experts form an organization, in which a referring expert must bear the referred expert's cost. However, the referred expert shirks from work effort because of the lack of cost responsibility.
    Keywords: information acquisition, referral, organization, adverse selection, cost-reduction incentive
    JEL: D00 D02 D80 D83
    Date: 2015–10
  11. By: Kodila-Tedika, Oasis; Asongu, Simplice
    Abstract: This paper explores the determinants of intelligence by focusing on the role played by barriers to the diffusion of competence and human capital. The results based on cross-sectional data from 167 countries consisting of 1996-2009 averages suggest that, genetic distance to global frontiers has a negative relationship with human capital. Countries that are genetically far from leading nations tend to have lower levels of human capital with the negative correlation from the USA frontier higher relative to the UK frontier. The sign is consistent with the relationship of genetic diversity and robust to the control of macroeconomic, geographical, institutional and influential variables. Policy implications are discussed.
    Keywords: Intelligence, Human Capital, Genetic distance
    JEL: F15 G15 N10 O16 O50
    Date: 2015–04
  12. By: Kurt R. Brekke (Department of Economics, Norwegian School of Economics); Tor Helge Holmäs (Uni Rokkan Centre; and Health Economics Bergen); Karin Monstad (Uni Rokkan Centre; and Health Economics Bergen); Odd Rune StraumeAuthor-Email: o.r.straume@eeg.uminho.p (Universidade do Minho - NIPE)
    Abstract: We study whether and how physicians respond to nancial 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 certi cation. Our results show a sharp response by the GPs immediately after obtaining specialist certi fication and thus a higher consultation fee: the number of visits increase, while the treatment intensity (prolonged consultations, lab tests, medical procedures) decline. These fi ndings 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 Creation-Date: 2015
    JEL: H42 H51 I11 I18
  13. By: SAITO Yukiko; YAMAUCHI Isamu
    Abstract: This paper investigates the relationship between inventors' mobility and organizations' productivity by constructing a database of patent inventors. We focus on inventors with rare names in order to avoid the problem of identifying distinct inventors with the same name. Tracing the inventors' transfers between organizations, we find the following. First, mobile inventors are more productive than stable inventors who have never transferred. Second, inventors with higher ex ante productivity have a higher frequency of transfers, while the effect of transfers on their ex post productivity for productive inventors is the opposite compared with that of less productive inventors. Thus, ex ante productivity may explain a large part of the higher productivity of mobile inventors relative to stable inventors. Third, the productivity of stable inventors is higher in an organization where inventors have more experience in different organizations. These results suggest the existence of knowledge spillover from mobile inventors to stable inventors, which leads to organizations' high productivity.
    Date: 2015–11
  14. By: Godager, Geir (Department of Health Management and Health Economics); Hennig-Schmidt, Heike (BonnEconLab); Iversen, Tor (Department of Health Management and Health Economics)
    Abstract: Quality improvements in markets for medical care are key objectives in any Health reform. An important question is whether disclosing physicians’ performance can contribute to achieving these goals. Due to the asymmetric information inherent in medical markets, one may argue that changes in the information structure are likely to influence the environment in which health care providers operate. In a Laboratory experiment with medical students that mimics a physician decision-making environment we analyze the effect of disclosing performance information to peers. Our results suggest that the information structure does influence the individual physician’s supply of medical services. Under performance disclosure, choices that are in accordance with the medical norm or maximize the joint benefit become more frequent.
    Keywords: Physician payment system; laboratory experiment; incentives; performance disclosure; fee-for-service; information and product quality
    JEL: C91 H40 I11 J33 L15
    Date: 2015–11–09
  15. By: Martin Koudstaal (VU University Amsterdam); Randolph Sloof (VU University Amsterdam, the Netherlands); Mirjam van Praag (Copenhagen Business School, Denmark)
    Abstract: Empirical evidence supports the conventional wisdom that entrepreneurs are more optimistic and overconfident than others. However, the same holds true for top managers. In this lab-in-the-field experiment we directly compare the scores of entrepreneurs, managers and employees on a comprehensive set of measures of optimism and overconfidence (n = 2,058). The results show that on average entrepreneurs are more optimistic than others in their dispositional optimism and attributional style when bad events occur. For incentivized measures of overconfidence we find no difference between entrepreneurs and managers, although both are more prone to it than employees. Finally, exploration of within-group heterogeneities shows that optimism and success are more strongly related for managers than for entrepreneurs and that an average entrepreneur is not more optimistic than successful managers. We conclude that optimism and overconfidence are indeed characteristics of entrepreneurs, but they are not unique when compared to (top) managers.
    Keywords: Entrepreneurs; managers; dispositional optimism; attributional style; overestimation; overconfidence; behavioral economics
    JEL: L26 C93 D03 M13
    Date: 2015–11–06
  16. By: Mickaël Naulleau (Audencia Recherche - Audencia)
    Abstract: The literature on Talent Management (TM) presupposes an exclusive alignment of TM with the organization's strategy, and the ability of any organization to engage a TM strategy. This article examines these principles by exploring the organizational contingency factors involved in the process of creation / development of TM strategy. We carried out a one-year Action-Research with the business leaders of a French medium-sized company (3 000 employees). We propose a complementary analytical framework to the decision model of Talentship which is focused on a prerequisite diagnosis on organizational capacities in TM strategy implementation.
    Keywords: Strategy, Talentship, Action Research,Talent Management
    Date: 2015–09–24
  17. By: Ting Liu (Stony Brook University); Ching-To Albert Ma (Boston University); Henry Y. Mak (Indiana University-Purdue University Indianapolis)
    Abstract: A Principal would like low-benefit projects to be serviced by a low-cost-low-productivity expert and high- benefit projects, by a high-cost-high-productivity expert. Experts derive intrinsic or extrinsic motivational benefits from providing services, but must earn minimum profits. The Principal lacks information about project benefits and experts' motivations, which are both known to experts. Experts form a Partnership, which sets up a gatekeeping-referral protocol and a corresponding sharing rule. We show that the Principal can implement the first best by a single contract with the Partnership. The contract is quasi-linear, consisting of a lump sum, and a partial reimbursement of experts' incurred costs.
    Keywords: Motivated Experts, Principal, Multiagent, Partnership, Referral
    JEL: D00 D02 D80 D83
    Date: 2015–06

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