nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2016‒03‒10
fifteen papers chosen by
Patrick Kampkötter
Universität zu Köln

  1. Influences on Employee Reward Strategies in International Organizations By Carolan McLarney; James Hansen
  2. The impact of investment in human capital on economic development: An empirical exercise based on height and years of schooling in Spain (1881-1998) By Enriqueta Camps
  3. Management Board Composition of Banking Institutions and Bank Risk-Taking: The Case of the Czech Republic By Diana Zigraiova
  4. The Preference Survey Module: A Validated Instrument for Measuring Risk, Time, and Social Preferences By Armin Falk; Anke Becker; Thomas Dohmen; David Huffman; Uwe Sunde
  5. The influence of CEO departure type and board characteristics on firm performance By Wided Bouaine; Lanouar Charfeddine; Mohamed Arouri; Frédéric Teulon
  6. Enriching Students Pays Off: Evidence from an Individualized Gifted and Talented Program in Secondary Education By Booij, Adam S.; Haan, Ferry; Plug, Erik
  7. How competitiveness may cause a gender wage gap: Experimental evidence By Heinz, Matthias; Normann, Hans-Theo; Rau, Holger A.
  8. Sustaining the Growth of Employee: Motivation and Career Development in Organization By Parvaiz, Tuba; Ahmed, Ovais
  9. Self-Chosen Student Groups - What is the student impact if one is not part of his/her ideal team? By Donald Kudek
  10. CEO Monitoring and board effectiveness: Resolving CEO compensation issue By Chiraz Ben Ali; Frederic Teulon
  11. Inside Severance Pay By Pietro Garibaldi; Tito Boeri; Espen R Moen
  12. Ingratiation and Favoritism in Organizations By Agnieszka Rusinowska; Vassili Vergopoulos
  13. Understanding peer effects - On the nature, estimation and channels of peer effects By Feld J.F.; Zölitz U.N.
  14. Hierarchical Organization and Performance Inequality: Evidence from Professional Cycling By Bertrand Candelon; Arnaud Dupuy
  15. How Bad Is Involuntary Part-time Work? By Borowczyk-Martins, Daniel; Lalé, Etienne

  1. By: Carolan McLarney (Dalhousie University); James Hansen (Dalhousie University)
    Abstract: It is of great importance that organizations seek to have a stable, productive, and motivated workforce. The primary way to accomplish this is through effective reward strategies to compensate employees for their efforts. The challenge for the global organization is to ensure that the rewards offered provide motivation for employees and generate workplace commitment, regardless of location. Three notable influences on reward strategies were summarized, the first being Maslow’s Hierarchy of Needs. Maslow stated that all people have the same needs and are motivated to fulfill these needs as they increase in complexity (Maslow, 1943, p. 370). The second influence was Herzberg’s two factor theory, which identified two factors that provide motivation for employees, motivators (job growth, advancement) and hygiene factors (policies, compensation) (Herzberg, 1968, p. 56). The final influence studied was culture, which emphasized Hofstede’s cultural dimensions: power distance, individualism versus collectivism, masculinity versus femininity, uncertainty avoidance, long term orientation, and indulgence versus restraint (Hofstede, 1994, pp. 2-5; Hofstede, Hofstede, & Minkov, 2010, p. 281). The evidence showed that using these influences as indicators along with other factors noted in research, such as organizational goals and demographic employee data, will enable a company to make a more balanced decision with respect to international employee reward strategies. Thus, a variety of factors must be considered when creating or revising reward strategies to ensure that irrespective of location, employees will be motivated by the rewards. Three examples were noted of companies who have faced the challenge of implementing an international reward strategy. Both Colgate-Palmolive and RBC were found to have completed analysis with their reward strategies to ensure their international policies were motivating for staff. Lincoln-Electric was identified as a company who failed in their international reward strategy; they incorrectly assumed the rewards that worked in the U.S. would work overseas, which contributed to losses in their European division and required drastic efforts to correct (Hastings, 1999, p. 171).To support leaders in these decisions, a model for assessing reward strategies in the international environment was presented and discussed. Leaders will find the model useful, as it consolidates the key influences that must be considered when reviewing international reward strategies and can be customized to include additional factors as required.
    Keywords: Human Resource Management, International Business, Banking
  2. By: Enriqueta Camps
    Abstract: Throughout the 19th century and until the mid-20th century, in terms of long-term investment in human capital and, above all, in education, Spain lagged far behind the international standards and, more specifically, the levels attained by its neighbours in Europe. In 1900, only 55% of the population could read; in 1950, this figure was 93%. This paper provides evidence that these conditions contributed to a pattern of slower economic growth in which the physical strength required for agricultural work, measured here through height, had a larger impact than education on economic growth. It was not until the 1970s, with the arrival of democracy, that the Spanish education system was modernized and the influence of education on economic growth increased.
    Keywords: employment structure, human capital, educational offer, economic growth.
    JEL: I2 I1 J3 J8 N3
    Date: 2016–02
  3. By: Diana Zigraiova
    Abstract: The paper investigates how the management board composition of banking institutions affects their risk-taking behavior in the Czech Republic. More specifically, we examine the effect of average director age, the proportion of female directors, the proportion of non-national directors, and director education level on four different bank risk proxies. We build a unique data set comprising selected biographical information on the management board members of Czech financial institutions holding a banking license over the 2001-2012 period. Our most robust finding is that higher proportions of non-national directors increase bank risk as measured by profit volatility and reduce bank stability as captured by the Z-score for the Czech banking sector overall and for the segments of general commercial banks, small and mid-sized banks and adequately capitalized banks. Moreover, we also detect risk-increasing implications of board size for the segments of building societies and small and mid-sized banks. As for average board tenure, its effect on risk-taking varies depending on bank characteristics. We find mixed evidence on the effect of female directors and do not find any strong effect of directors' age on risk in the Czech banking sector. All in all, the results of our analysis are subject to the proxy of bank risk used. The reader should keep in mind that higher absolute level of bank risk is not necessarily unfavorable as it does not capture if risk-taking behavior is excessive for a given return.
    Keywords: Banks, management board composition, panel data, risk-taking
    JEL: C33 G21 G34 J16
    Date: 2015–12
  4. By: Armin Falk (Universität Bonn); Anke Becker (Bonn Graduate School of Economics); Thomas Dohmen (Universität Bonn); David Huffman (University of Pittsburgh); Uwe Sunde (University of Munich)
    Abstract: This paper presents an experimentally validated survey module to measure six key economic preferences { risk aversion, discounting, trust, altruism, positive and negative reciprocity in a reliable, parsimonious and cost-effective way. The survey instruments included in the module were the best predictors of preferences revealed in incentivized choice experiments. We also offer a streamlined version of the module that has been optimized and piloted for applications where time efficiency and simplicity are paramount, such as international telephone surveys.
    Keywords: survey validation, experiment, preference measurement
    JEL: C81 C83 C90
    Date: 2016–02
  5. By: Wided Bouaine; Lanouar Charfeddine; Mohamed Arouri; Frédéric Teulon
    Date: 2016–02–18
  6. By: Booij, Adam S. (University of Amsterdam); Haan, Ferry (University of Amsterdam); Plug, Erik (University of Amsterdam)
    Abstract: We examine the effect of a gifted and talented program in academic secondary education. Students are assigned based on a cutoff score in a cognitive aptitude test, which we exploit in a fuzzy regression discontinuity framework to identify program effects. We find that assigned students obtain higher grades, follow a more science intensive curriculum (most notably for girls), and report stronger beliefs about their academic abilities. We also find that these positive effects persist in university, where students choose more challenging fields of study with, on average, higher returns. Together, these findings are consistent with a human capital interpretation.
    Keywords: gifted and talented education, enrichment program, secondary education, regression discontinuity
    JEL: I22 I28
    Date: 2016–02
  7. By: Heinz, Matthias; Normann, Hans-Theo; Rau, Holger A.
    Abstract: We show that choices in competitive behavior may entail a gender wage gap. In our experi ments, employees first choose a remuneration scheme (competitive tournament vs. piece rate) and then conduct a real-effort task. Employers know the pie size the employee has generated, the remuneration scheme chosen, and the employee's gender. Employers then decide how the pie will be split, as in a dictator game. Whereas employers do not discriminate by gender when tournaments are chosen, they take substantially and significantly more from female employees who choose piece-rate remuneration. A discriminatory wage gap occurs which cannot be attributed to employees' performance.
    Keywords: dictator game,discrimination,gender wage gap,laboratory experiment,real-effort task
    JEL: C91 J16 M52
    Date: 2016
  8. By: Parvaiz, Tuba; Ahmed, Ovais
    Abstract: The research study is to determine the sustaining the employee’s growth of employee with motivation and career development in organization. The data for literature review have been collected from published journals and books. The purpose of this research is to evaluate the significance impact of motivation on employee growth with respect to career development and those factor which are broadly set in this research study. The sample technique and analysis are used by SPSS tool. Regression and correlation analysis are conducted
    Keywords: Employees Growth, Growth Motivation, Employee Performance, Career Development
    JEL: M1 M12 M5 M51 M53
    Date: 2016–02–26
  9. By: Donald Kudek (Wisconsin Lutheran College)
    Abstract: Colleges and universities have increased student group work in business curriculum since the business community is looking for students able to work in this environment. Although it has been shown to provide students with added teamwork, communication, and problem solving skills, group work creates challenges in grading, social loafing, and motivation. To help reduce these issues, professors have allowed students to pick their own teams, which has created its own set of issues and concerns. Although studies have shown students prefer to choose their own teams, transfer students, student with learning challenges, or just the “odd man out†issue when social circles do not match team sizes, could cause those students to have a negative learning experience. Through a research study of undergraduate business students at Wisconsin Lutheran College, the author hoped to gain a greater understanding of the impact on learning that students face when they are not able to join their ideal team choice when teams are self-selected. Students in Microeconomics (BUS 181) where the professor chooses the teams and two classes where students choose their own teams provided the research subjects. The author utilized an adaptation of a study instrument from Marks and O’Connor (2013), conducted at Longwood University in Farmville, Virginia. Although the author was concerned that students that were able to choose their own teams, but did not become part of their ideal team, would have a negative learning experience compared to other self-selected teams as well as teams assigned by the professor, the data gathered did not support the hypothesis. Convenience sampling and small sample sizes may have contributed to the results, and thus additional research and analysis should be completed on this important topic.
    Keywords: Group Work, Colleges, Universities, evaluation, education impact
    JEL: I21
  10. By: Chiraz Ben Ali; Frederic Teulon
    Date: 2016–02–18
  11. By: Pietro Garibaldi (Collegio Carlo Alberto); Tito Boeri; Espen R Moen (Norwegian Business School)
    Abstract: All OECD countries have either legally mandated severance pay or compensations imposed by industry-level bargaining in case of employer initiated job separations. In the literature such transfers are either ineffective or less efficient than unemployment benefits in providing insurance against labor market risk. The paper shows that mandatory severance is optimal in presence of wage deferrals induced by workers' moral hazard. We also establish a link between optimal severance and efficiency of the legal system and characterize the effects of shifting the burden of proof from the employer to the worker. Quantitatively, the welfare effects of suboptimal severance payments vary in general equilibrium between 1 and 3 percent. The model accounts also for two neglected features of the legislation. The first is the discretion of judges in declaring the nature, economic vs. disciplinary, of the layoff. The second feature is that compensation for dismissal is generally increasing with tenure.
    Date: 2016–02
  12. By: Agnieszka Rusinowska (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Vassili Vergopoulos (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: We combine in the same theoretical framework two related phenomena that can be present in organizations – ingratiation of subordinates and favoritism of superiors towards some of their employees. There are three actors in the model: a worker, a manager supervising the worker, and a firm that employs the worker and the manager. Ingratiation is defined as a strategic behavior of the worker to make himself more attractive to the manager. In our model ingratiation is expressed by opinion conformity which is exerted by the worker when reporting his opinion to the manager. Favoritism of the manager is based on using a bias when reporting to the firm her observation of the worker's performance. First, we determine to optimal level of the effort and the reported opinion of the worker, and the level of bias of the manager. Then, we investigate the effects of favoritism and ingratiation on the expected wages and utilities of the worker and the manager, and on the expected profit of the firm.
    Abstract: Nous incorporons au sein d'une même approche théorique, deux phénomènes complémentaires à l'œuvre dans les organisations – l'ingratiation de la part des employés subordonnés et le favoritisme de la part des supérieurs hiérarchiques envers ces employés. Il y a trois acteurs dans le modèle : un employé, un manager qui supervise l'employé et une firme qui emploie ces deux derniers. L'ingratiation est définie comme un comportement stratégique de l'employé qui vise à obtenir les bonnes grâces de son manager. Dans notre modèle, l'ingratiation s'exprime en termes de conformité d'opinion, lorsque l'employé déclare son opinion auprès du manager. Le favoritisme consiste à appliquer un biais dans le rapport que le manager adresse à la firme et qui est censé décrire son observation de la performance de l'employé. Nous déterminons d'abord le niveau optimal d'effort et l'opinion déclarée par l'employé, ainsi que le niveau du biais appliqué par le manager. Nous étudions ensuite les effets du favoritisme et de l'ingratiation sur les salaires et utilités espérés de l'employé et du manager, et sur le profit espéré de la firme.
    Keywords: opinion conformity,favoritism,organization,wage,organisation,favoritisme,ingratiation,conformité d'opinion,performance,salaire,profit
    Date: 2016–01
  13. By: Feld J.F.; Zölitz U.N. (GSBE)
    Abstract: This paper estimates peer effects in a university context where students are randomly assigned to sections. While students benefit from better peers on average, low-achieving students are harmed by high-achieving peers. Analyzing students course evaluations suggests that peer effects are driven by improved group interaction rather than adjustments in teachers behavior or students effort. We further show, building on Angrist 2014, that classical measurement error in a setting where group assignment is systematic can lead to substantial overestimation of peer effects. With random assignment, as is the case in our setting, estimates are only attenuated.
    Keywords: Analysis of Education; Education and Inequality; Human Capital; Skills; Occupational Choice; Labor Productivity;
    JEL: I21 I24 J24
    Date: 2016
  14. By: Bertrand Candelon; Arnaud Dupuy
    Date: 2016–02–18
  15. By: Borowczyk-Martins, Daniel (Sciences Po, Paris); Lalé, Etienne (University of Bristol)
    Abstract: We use a set of empirical and analytical tools to conduct parallel analyses of involuntary part-time work and unemployment in the U.S. labor market. In the empirical analysis, we document that the similar cyclical behavior of involuntary part-time work and unemployment masks major differences in the underlying dynamics. Unlike unemployment, variations in involuntary part-time work are mostly explained by its interaction with full-time employment, and since the Great Recession employed workers are at a greater risk of working part-time involuntarily than being unemployed. In the theoretical analysis, we show that the higher probability of regaining full-time employment is key to distinguish involuntary part-time work from unemployment from a worker's perspective. We also quantify the welfare costs of cyclical fluctuations in involuntary part-time work, and the amplification of these costs arising from the elevated levels of involuntary part-time work observed since the Great Recession.
    Keywords: employment, involuntary part-time work, welfare, Great Recession
    JEL: E21 E32 J21
    Date: 2016–02

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