nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2016‒08‒21
eight papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. The curse of long horizons By Bhaskar, Venkataraman; Mailath, George
  2. No margin, no mission? A field experiment on incentives for public service delivery By Nava Ashraf; Oriana Bandiera; B. Kelsey Jack
  3. International data on measuring management practices By Nicholas Bloom; Renata Lemos; Raffaella Sadun; Daniela Scur; John Van Reenen
  4. Do People Anticipate Loss Aversion By Alex Imas; Anya Samek; Sally Sadoff
  5. Incentive Design and Quality Improvements: Evidence from State Medicaid Nursing Home Pay-for-Performance Programs By Konetzka, R.T.; Skira, M.M.; Werner, R.M.
  6. The strongest link in a weak team? Performance of players with and without outside options in relegated football clubs By Müller, Michael
  7. Why Fixed Rent Contracts are Less Prevalent: Weak Third Party Enforcement and Endogenous Principal Type By Raul V. Fabella
  8. Gender Differences in Job Entry Decisions: A University-Wide Field Experiment By Anya Samek

  1. By: Bhaskar, Venkataraman; Mailath, George
    Abstract: We study dynamic moral hazard with symmetric ex ante uncertainty about the difficulty of the job. The principal and agent update their beliefs about the difficulty as they observe output. Effort is private and the principal can only offer spot contracts. The agent has an additional incentive to shirk beyond the disutility of effort when the principal induces effort: shirking results in the principal having incorrect beliefs. We show that the effort inducing contract must provide increasingly high powered incentives as the length of the relationship increases. Thus it is never optimal to always induce effort in very long relationships.
    Keywords: differences in beliefs; high-powered incentives.; moral hazard; principal-agency
    JEL: D01 D23 D86 J30
    Date: 2016–08
  2. By: Nava Ashraf; Oriana Bandiera; B. Kelsey Jack
    Abstract: We conduct a field experiment to evaluate the effect of extrinsic rewards, both financial and non-financial, on the performance of agents recruited by a public health organization to promote HIV prevention and sell condoms. In this setting: (i) non-financial rewards are effective at improving performance; (ii) the effect of both types of rewards is stronger for pro-socially motivated agents; and (iii) both types of rewards are effective when their relative value is high. The findings illustrate that extrinsic rewards can improve the performance of agents engaged in public service delivery, and that non-financial rewards can be effective in settings where the power of financial incentives is limited.
    Keywords: financial incentives; non-monetary rewards; pro-social motivation; public service delivery
    JEL: D82 J33 M52 O15
    Date: 2014–12
  3. By: Nicholas Bloom; Renata Lemos; Raffaella Sadun; Daniela Scur; John Van Reenen
    Abstract: We examine methods used to survey firms on their management and organizational practices. We contrast the strengths and weaknesses of "open ended questions" (like the World Management Survey) with "closed questions" (like the MOPS). For this type of data, open ended questions give higher quality responses, but are more costly than closed question-based surveys.
    JEL: C80
    Date: 2016–05
  4. By: Alex Imas; Anya Samek; Sally Sadoff
    Abstract: There is growing interest in the use of loss contracts that offer performance incentives as upfront payments that employees can lose. Standard behavioral models predict a tradeoff in the use of loss contracts: employees will work harder under loss contracts than under gain contracts; but, anticipating loss aversion, they will prefer gain contracts to loss contracts. In a series of experiments, we test these predictions by measuring performance and preferences for payoff-equivalent gain and loss contracts. We find that people indeed work harder under loss than gain contracts, as the theory predicts. Surprisingly, rather than a preference for the gain contract, we find that people actually prefer loss contracts. In exploring mechanisms for our results, we find suggestive evidence that people do anticipate loss aversion but select into loss contracts as a commitment device to improve performance.
    Date: 2015
  5. By: Konetzka, R.T.; Skira, M.M.; Werner, R.M.
    Abstract: Pay-for-performance (P4P) programs have become a popular policy tool aimed at improving health care quality. We analyze how incentive design affects quality improvements in the nursing home setting, where several state Medicaid agencies have implemented P4P programs that vary in incentive structure. Using the Minimum Data Set and the Online Survey, Certification, and Reporting data from 2001 to 2009, we examine how the weights put on various performance measures that are tied to P4P bonuses, such as clinical outcomes, staffing levels, and inspection deficiencies, affect improvements in those measures. We find larger weights on clinical outcomes often lead to larger improvements, but small weights can lead to no improvement or worsening of some clinical outcomes. We find a qualifier for P4P eligibility based on having few or no severe inspection deficiencies is more effective at decreasing inspection deficiencies than using weights, suggesting simple rules for participation may incent larger improvement.
    Keywords: pay-for-performance; nursing home quality; long-term care; incentive design;
    JEL: I11 I18
    Date: 2016–08
  6. By: Müller, Michael
    Abstract: In this study the performance of players in relegated German football clubs is analysed, in particular the change in their contribution to team production. The players in the data sample differ regarding their outside options. Different career opportunities of players may have two effects when their current team struggles against relegation. First, players with outside options should be less motivated compared to the reference group. Second, risk attitudes of players who lack career opportunities may change. The empirical results show that players with outside options contribute less to the teams overall running distance before they are transferred to league opponents. Players who stayed after relegation with their teams played more incomplete passes, which indicates that they are more willing to take risks. Effort levels of staying players get higher, but leaving players might have superior playing talent.
    Abstract: In diesem Beitrag wird die Leistung von Fußballern in absteigenden Bundesligavereinen untersucht, insbesondere die Veränderung in ihrem Beitrag zur Teamproduktion. Die Spieler im Datensatz unterscheiden sich hinsichtlich ihrer externen Optionen. Unterschiedliche Karrieremöglichkeiten von Fußballern könnten zwei Effekte haben, wenn ihr gegenwärtiger Verein gegen den Abstieg kämpft. Erstens sollten Spieler mit Angeboten von anderen Vereinen weniger motiviert sein. Zweitens könnte sich die Risikoeinstellung von Spielern ohne Transferanfragen ändern. Die empirischen Ergebnisse zeigen, dass der Anteil an der insgesamt vom jeweiligen Team zurückgelegten Laufdistanz für Fußballer niedriger ist, die ihre Vereine nach einem Ligaabstieg verlassen. Die Fehlpassquote der Spieler, die bei ihren Vereinen verbleiben, ist höher, was darauf hindeutet, dass ihre Risikobereitschaft steigt. Die Anstrengung verbleibender Spieler nimmt zu, doch abgehende Fußballer könnten ein größeres Spieltalent haben.
    JEL: Z20 Z22 J24 J63 M51 L83
    Date: 2016
  7. By: Raul V. Fabella (School of Economics, University of the Philippines Diliman; National Academy of Science and Technology)
    Abstract: We revisit the question of why fixed rent contracts are less prevalent than crop share contracts despite Marshallian inefficiency. We consider the case where the type of the principal is endogenous to contract provisions and reneging by the principal may pay due to weak third party enforcement (TPE). We imbed the quality of TPE into the participation constraint of the agent in an effort-in-advance P-A model. The governance regime explicitly involves interplay of three categories of the Northian enforcement, viz., first, second and third party enforcement. Weak and strong TPE are formally defined. We show that the general contract derived nests the usual textbook contract when TPE is strong; weak TPE on the other hand results in a strictly positive induced risk aversion which always exceeds the inherent risk aversion of the agent. This prevents the power of the contract to equal one even when the agent is risk-neutral, thus, rendering a fixed-rent contract sub-optimal.
    Keywords: sharecropping, weak TPE, endogenous type, induced risk aversion
    JEL: D23 D82 D86
    Date: 2016–08
  8. By: Anya Samek
    Abstract: The gender difference in competitiveness has been cited as an important factor driving the gender gap in labor market outcomes. Using a natural field experiment with 35,000 university students, I explore the impact of compensation scheme on willingness to apply for a job. I find that competitive compensation schemes disproportionately deter women from applying, which cannot be explained by differences in risk preferences alone. I also vary whether the job is introduced as helping a non-profit, which increases application rates, suggesting a role for social preferences in application decisions. Finally, I observe a correlation between competitiveness preferences and career choice.
    Date: 2015

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