nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2016‒10‒30
ten papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Performance-Based Financing, Motivation and Final Output in the Health Sector: Experimental Evidence from the Democratic Republic of Congo By Elise Huillery; Juliette Seban
  2. Unfair Pay and Health By Armin Falk; Fabian Kosse; Ingo Menrath; Pablo E. Verde; Johannes Siegrist
  3. Management practices and productivity in Germany By Broszeit, Sandra; Fritsch, Ursula; Görg, Holger; Laible, Marie-Christine
  4. Biases and Strategic Behavior in Performance Evaluation: The Case of the FIFA’s Best Soccer Player Award By Tom Coupe; Olivier Gergaud; Abdul Noury
  5. Human Capital and Market Size By Vives Coscojuela, Cecilia
  6. Understanding the response to financial and non-financial incentives in education: Field experimental evidence using high-stakes assessments By Simon Burgess; Robert Metcalfe; Sally Sadoff
  7. Gender Interaction in Teams: Experimental Evidence on Performance and Punishment Behavior By Seeun Jung; Radu Vranceanu
  8. Don't hate the player, hate the game: Uncovering the foundations of cheating in contests By Glenn Dutcher; Daniela Glätzle-Rützler; Dmitry Ryvkin
  9. How Sticky Wages In Existing Jobs Can Affect Hiring By Mark Bils; Yongsung Chang; Sun-Bin Kim
  10. The HRM of Foreign MNCs Operating in Europe By Chul Chung; Masayuki Furusawa

  1. By: Elise Huillery (ECON - Département d'économie - Sciences Po); Juliette Seban (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Performance-based financing becomes a common strategy to improve health sector quality. The findings of this paper imply that performance-based financing should take motivational effects and levels of provider capacity into account. Using a field experiment in the Democratic Republic of Congo, we find that financial incentives led to more effort from health workers on rewarded activities, without deterring effort on non-rewarded activities. We also find a shift from intrinsic to extrinsic motivation. Finally, the increased effort by health workers proved unsuccessful and led to a reduction in revenue, suggesting that health workers lacked the capacity to develop appropriate strategies to perform.
    Date: 2014–10
  2. By: Armin Falk; Fabian Kosse; Ingo Menrath; Pablo E. Verde; Johannes Siegrist
    Abstract: This paper investigates physiological responses to perceptions of unfair pay. We use an integrated approach exploiting complementarities between controlled lab and representative panel data. In a simple principal-agent experiment agents produce revenue by working on a tedious task. Principals decide how this revenue is allocated between themselves and their agents. Throughout the experiment we record agents' heart rate variability, which is an indicator of stress-related impaired cardiac autonomic control, and which has been shown to predict coronary heart disease in the long-run. Our findings establish a link between unfair payment and heart rate variability. Building on these findings, we further test for potential adverse health effects of unfair pay using observational data from a large representative panel data set. Complementary to our experimental findings we show a strong and significant negative association between unfair pay and health outcomes, in particular cardiovascular health.
    Keywords: Fairness, social preferences, inequality, heart rate variability, health, experiments, SOEP
    JEL: C91 D03 D63 I14
    Date: 2016
  3. By: Broszeit, Sandra; Fritsch, Ursula; Görg, Holger; Laible, Marie-Christine
    Abstract: Based on a novel dataset, the "German Management and Organizational Practices" (GMOP) Survey, we calculate establishment specific management scores following Bloom and van Reenen as indicators of management quality. We find substantial heterogeneity in management practices across establishments in Germany, with small firms having lower scores than large firms on average. We show a robust positive and economically important association between the management score and establishment level productivity in Germany. This association increases with firm size. Comparison to a similar survey in the US indicates that the average management score is lower in Germany than in the US. Overall, our results point towards lower management scores being at least in part to blame for the differences in aggregate productivity between Germany and the US.
    Keywords: management practices,firm performance,labor productivity,GMOP,MOPS
    JEL: D24 L2 M2
    Date: 2016
  4. By: Tom Coupe (University of Canterbury); Olivier Gergaud; Abdul Noury
    Abstract: In this paper, we study biases in performance evaluation by analyzing votes for the FIFA Ballon d’Or award for best soccer player, the most prestigious award in the sport. We find that ‘similarity’ biases are substantial, with jury members disproportionately voting for candidates from their own country, own national team, own continent, and own league team. Further, we show that the impact of these biases on the total number of votes a candidate receives is fairly limited and hence is likely to affect the outcome of this competition only on rare occasions where the difference in quality between the leading candidates is small. Finally, analyzing the incidence of ‘strategic voting’, we find jury members who vote for one leading candidate are more, rather than less, likely to also give points to his main competitor, as compared with neutral jury members. We discuss the implications of our findings for the design of awards, elections and performance evaluation systems in general, and for the FIFA Ballon d’Or award in particular.
    Keywords: Award; Bias; Voting; Soccer
    JEL: D72 Z2
    Date: 2016–10–27
  5. By: Vives Coscojuela, Cecilia
    Abstract: This paper studies how the size of the labour market aff ects workers' decision to invest in human capital. We consider a model of mismatch where firms rank workers according to their level of skills. The matching process operating in the market has the property that the job fi nding probability of workers depends on market size, market tightness and their ranking. An interesting feature is that, while the job finding probability of workers with a given rank di ffers with market size, the probability of workers with a given level of human capital is constant with the size of the market. The model is consistent with several facts highlighted in empirical studies: In bigger markets the distribution of human capital is more unequal and the returns to skill are higher. We fi nd numerically that the mean level of human capital increases with market size.
    Keywords: capital, skill, human, distribution, matching, size, city
    JEL: R23 J24
    Date: 2016–07
  6. By: Simon Burgess; Robert Metcalfe; Sally Sadoff
    Abstract: We analyze the impact of incentivizing students’ effort during the school year on performance on high-stakes assessments in a field experiment with 63 low-income high schools and over 10,000 students. We contribute to the literature on education incentives by incentivising inputs rather than output, by focusing on high stakes outcomes, and by comparing financial and non-financial rewards. We take advantage of our large sample and rich data to explore heterogeneity in the effects of incentives, and identify a “right tail” of underperforming students who experience a significant impact on high stakes assessments. Among students in the upper half of the distribution of incentive effectiveness, exam scores improve by 10% to 20% of a standard deviation, equal to about half the attainment gap between poor and non-poor students.
    Date: 2016–10–19
  7. By: Seeun Jung (ESSEC Business School - Essec Business School, PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), PSE - Paris School of Economics); Radu Vranceanu (Economics Department - Essec Business School)
    Abstract: This paper reports results from a real-e ort experiment in which men and women are paired to form a two-member team and asked to execute a real-eff ort task. Each participant receives an equal share of the team's output. Workers who perform better than their partner can punish him/her by imposing a fi ne. We manipulate the teams' gender composition (man-man, man-woman, and woman-woman) to analyze whether an individual's performance and sanctioning behavior depends on his/her gender and the gender interaction within the team. The data show that, on average, men perform slightly better than women. A man's performance will deteriorate when paired with a woman, while a woman's performance will improve when paired with a woman. When underperforming, women are sanctioned more often and more heavily than men; if sanctioned, men tend to improve their performance, while women's performance does not change.
    Keywords: Gender studies,Real-e ort task,Team production,Performance,Punishment,Discrimination
    Date: 2015–06–25
  8. By: Glenn Dutcher; Daniela Glätzle-Rützler; Dmitry Ryvkin
    Abstract: Contests are meant to attract the best performers and incentivize high effort, however, they may also attract cheaters who try to win via illicit means which crowds out the best performers. We use a laboratory experiment to explore the role of self-selection in contests with a possibility of lying in a real effort task. Contrary to common wisdom, we do not find evidence that contests disproportionately attract intrinsic cheaters. However, we find that contests fail at selecting the best performers, as no difference is observed in the actual or perceived ability of those who selected into the contest versus those who selected into a comparable noncompetitive pay scheme. Classification-JEL: D02, K42, M52, C90
    Keywords: contest, cheating, entry, experiment
    Date: 2016–10
  9. By: Mark Bils (University of Rochester NBER); Yongsung Chang (University of Rochester, Yonsei University); Sun-Bin Kim (Yonsei University)
    Abstract: We consider a matching model of employment with flexible wages for new hires, but sticky wages within matches. Unlike most models of sticky wages, we allow effort to re- spond if wages are too high or too low. In the Mortensen-Pissarides model, employment is not affected by wage stickiness in existing matches. But it is in our model. If wages of matched workers are stuck too high, firms require more effort, lowering the value of additional labor and reducing hiring. We find that effort's response can greatly increase wage inertia and the volatility of employment relative to that in measured productivity.
    Keywords: Effort, Employment, Sticky Wages, Wage Inertia
    JEL: E32 E24 J22
    Date: 2016–10
  10. By: Chul Chung (Henley Business School, University of Reading, UK); Masayuki Furusawa (Faculty of Business Administration, Osaka University of Commerce Japan)
    Abstract: Europe has been a major destination for foreign direct investment as one of the triad economies with the USA and Japan. MNCs have brought not just financial resources but also human resources and, in many cases, particular ways of managing workforces from their home base. Transferring HRM practices could be highly complex and challenging, as human resources are the most country-bounded resources. Foreign MNCs operating in Europe face cross-national challenges stemming from the process of transfer and adaptation of HRM practices, due to the uniqueness of European traditions as well as the national diversity within Europe in relation to employment relations. This paper examines how MNCs from three different countries – the USA and Japan, the two other triad economies, and South Korea, a home base of emerging MNCs – have dealt with the challenges in managing human resources in their European operations within the given institutional contexts.
    Keywords: multinational corporation, human resource management, Europe, Japan, USA, South Korea
    Date: 2015–03

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