nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2016‒11‒27
thirteen papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Exposure, participation in human resource management practices and employee attitudes By HAURET Laetitia; MARTIN Ludivine; OMRANI Nessrine; WILLIAMS Donald R.
  2. Labor Unemployment Risk and CEO Incentive Compensation By Ellul, Andrew; Wang, Cong; Zhang, Kuo
  3. Management Practices and Productivity in Germany By Broszeit, Sandra; Fritsch, Ursula; Görg, Holger; Laible, Marie-Christine
  4. Optimal Contracts for Research Agents By Yaping Shan
  5. Learning about Oneself: The Effects of Performance Feedback on School Choice By Bobba, Matteo; Frisancho, Veronica
  6. Optimal Taxation with Risky Human Capital By Marek Kapicka; Julian Neira
  7. Understanding Gender Differences in Leadership By Sule Alan; Seda Ertac; Elif Kubilay; Gyongyi Loranth
  8. Skilled or educated? Educational reforms, human capital and earnings. By Lorenzo Cappellari; Paolo Castelnovo; Daniele Checchi; Marco Leonardi
  9. The influence of CEO power on agency costs in non-profit organisations: evidence from the global microfinance industry By Roy Mersland; Daudi Pascal; Leif Atle Beisland
  10. The Impact of Management Quality on Innovation Performance of Firms in Emerging Countries By Oleg Sidorkin
  11. Culture and team production By Vicente Calabuig; Gonzalo Olcina; Fabrizio Panebianco
  12. Human resources management at Bulgarian sea ports – problems and perspectives for development By Koralova, Petya
  13. Human Resources Management Professionalism in an Era of Human Resources Management Exceptionalism By Nico Schutte; Sonia Swanepoel

  1. By: HAURET Laetitia; MARTIN Ludivine; OMRANI Nessrine; WILLIAMS Donald R.
    Abstract: Existing evidence on Human Resource Management (HRM) strategy has been limited to separate analyses of the relationship between exposure to or participation in HRM and employee attitudes which affect overall firm performance. This paper is the first to integrate the two perspectives in a single analysis. Using employer-employee matched data with both exposure and participation measures, we find that a high exposure to HRM is not sufficient to improve employee attitudes when the level of employee participation in HRM is taken into account. Furthermore, based on a Blinder-Oaxaca decomposition, the results suggest that employee involvement in HRM practices affects the value employees place on their personal, occupational and workplace characteristics.
    Keywords: job satisfaction; commitment; Human Resources Management; exposure; participation; employee
    JEL: J28 M12 R23
    Date: 2016–11
  2. By: Ellul, Andrew; Wang, Cong; Zhang, Kuo
    Abstract: We investigate the impact of workers' exposure to unemployment risk on the design of CEO incentive compensation. Through its impact on risk-taking activities, option-based compensation is likely to also influence unemployment risk which is internalized by the firm. Exploiting state-level changes in unemployment benefits as a source of variation in workers' unemployment costs, we find that after unemployment insurance benefits become more generous boards increase the CEOs' convex payoff structure. This behavior is consistent with the view that CEO's risk-taking incentives are amplified by the board to take advantage of lower costs associated with unemployment risk. The increase in convexity payoff structures is stronger when CEO wealth is tied closely to firm performance, more pronounced in labor-intensive industries, and attenuated by the strength of unionization. Changes in the incentive structures are associated with riskier investment and financing strategies and better performance. Results suggest that executive compensation is one mechanism used by boards to internalize labor market frictions in firms' decisions.
    Keywords: Executive compensation; Human Capital; leverage; Risk Taking; unemployment risk
    JEL: G32 G34
    Date: 2016–11
  3. By: Broszeit, Sandra (Institute for Employment Research (IAB), Nuremberg); Fritsch, Ursula (Kiel Institute for the World Economy); Görg, Holger (Kiel Institute for the World Economy); Laible, Marie-Christine (Institute for Employment Research (IAB), Nuremberg)
    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 quality 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: 2016–11
  4. By: Yaping Shan (School of Economics, University of Adelaide)
    Abstract: We study the agency problem between a firm and its research employees under several scenarios characterized by different R&D unit setups. In a multiagent dynamic contracting setting, we describe the precise pattern of the optimal contract. We illustrate that the optimal incentive regime is a function of how agents' efforts interact with one another; relative performance evaluation is used when their efforts are substitutes whereas joint performance evaluation is used when their efforts are complements. The optimal contract pattern provides a theoretical justification for the compensation policies used by firms that rely on R&D.
    Keywords: Dynamic Contract, Repeated Moral Hazard, Multiagent Incentive, R&D, Employee Compensation
    JEL: D23 D82 D86 J33 L22 O32
    Date: 2016–11
  5. By: Bobba, Matteo (Toulouse School of Economics); Frisancho, Veronica (Inter-American Development Bank)
    Abstract: We design and implement a field experiment that provides students from less advantaged backgrounds with individualized feedback on academic performance during the transition from middle to high school. The intervention reduces the gap between expected and actual performance, as well as shrinks the variance of the individual belief distributions. Guided by a simple Bayesian model, we empirically document the interplay between variance reductions and mean changes of beliefs about students' own academic ability in shaping curricular choices. The shift in revealed preferences over high school tracks enabled by the intervention affects schooling trajectories, with better performing students being assigned into more academically oriented options.
    Keywords: information, Bayesian updating, biased beliefs, school choice
    JEL: D83 I21 I24 J24
    Date: 2016–11
  6. By: Marek Kapicka; Julian Neira
    Abstract: We study optimal tax policies in a life-cycle economy with risky human capital and permanent ability differences. The optimal policies balance redistribution across agents, insurance against human capital shocks, and incentives to learn and work. In the optimum, i) if utility is separable in labor and learning effort, the inverse labor wedge follows a random walk, ii) if the utility is not separable then the “no distortion at the top” result does not apply, and iii) quantitatively, high-ability agents face very risky consumption while lowability agents are insured. The welfare gains from switching to an optimal tax system are large.
    Keywords: optimal taxation; income taxation; human capital;
    JEL: E6 H2
    Date: 2015–11
  7. By: Sule Alan (University of Essex); Seda Ertac (Koc University); Elif Kubilay (Bocconi University); Gyongyi Loranth (University of Virginia)
    Abstract: We study the evolution of gender differences in the willingness to assume the decision-maker role in a group, which is a major component of leadership. Using data from a large-scale field experiment, we show that while there is no gender difference in the willingness to make risky decisions on behalf of a group in a sample of children, a large gap emerges in a sample of adolescents. In particular, the proportion of girls who exhibit leadership willingness drops by 39% going from childhood to adolescence. We explore the possible causes of this drop and find that a significant part of it can be explained by a dramatic decline in "social confidence," measured by the willingness to perform a real effort task in public. We show that it is possible to capture the observed link between public performance and leadership by estimating a structural model that incorporates costs related to social concerns. These findings are important in addressing the lower propensity of females to self-select into high-level positions, which are typically subject to greater public scrutiny.
    Keywords: leadership, gender, risk taking, social confidence, experiment
    JEL: C91 C93 D03 I28
    Date: 2016–11
  8. By: Lorenzo Cappellari (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore); Paolo Castelnovo; Daniele Checchi; Marco Leonardi
    Abstract: We use OECD-PIAAC data to estimate the earnings effects of both years of education and of numerical skills. Our identification strategy exploits differential exposure to educational reforms across birth cohorts and countries. We find that education has the strongest earnings effect. A one standard deviation increase in years of education raises earnings by almost 22 percentage points (corresponding to a return to education above 7 percentage points), which compares with a lower percentage points return to an equivalent increase in numerical skills. Our results suggest that the same set of unobservables drives the accumulation of both formal years of education and numeracy skills. OLS estimates underestimate returns to human capital, consistently with the idea that educational reforms favour the human capital acquisition of abler children from disadvantaged parental backgrounds. When we consider numerical skills alone education reforms cannot identify any significant effect of skills on wages, however, when we jointly consider schooling and skills as endogenous factors in a recursive structure we find a significant role for skills in determining wages.
    Keywords: Returns to human capital, cognitive skills, educational reforms, PIAAC.
    JEL: I21 I24 I26 J24 J31
    Date: 2016–11
  9. By: Roy Mersland; Daudi Pascal; Leif Atle Beisland
    Abstract: This paper examines agency costs incurred by microfinance organisations. We argue that differences in agency costs not only stem from differences in ownership form but are also influenced by the amount of power wielded by the chief executive officer (CEO). We proxy for agency costs using operating expenses, asset utilisation, liquidity and tangible asset intensity. Using a sample of 374 microfinance organisations located in 76 countries, we find evidence that agency costs are higher in microfinance organisations set up as non-profits, but only if the CEO is powerful. Our empirical evidence illustrates the importance of installing proper governance mechanisms to minimise agency costs, in particular in the non-profit sector.
    Keywords: CEO; NPO; agency costs; microfinance
    JEL: M12 L31 D23 G21
    Date: 2016–11–21
  10. By: Oleg Sidorkin
    Abstract: I study the impact of management quality on innovation input and output of manufacturing firms in ten emerging countries using data from the Management, Organization and Innovation (MOI) Survey. I find effects of management quality on the decisions of firms to invest in R&D hold for both EU and non-EU emerging countries. An improvement in management quality from the 25th percentile to the median is associated with a 4.5 percentage point increase in the propensity to invest in R&D and a 5.7 percent increase in R&D spending per employee. Furthermore, there are positive but weak effects of management quality on product innovation. The empirical results for individual management practices show that the quality of monitoring management is intimately connected with innovation input and output. The quality of incentive management is related to higher input into innovation, but not to innovation output. The overall effects of operations and targeting management quality do not prove to be significant. All results hold after controlling for differences in management quality by industries. Additional analysis of management quality asymmetry shows that the results are driven mainly by firms with low quality management.
    Keywords: management quality; R&D; innovation; emerging countries;
    JEL: L2 M2 O3 P2
    Date: 2015–12
  11. By: Vicente Calabuig; Gonzalo Olcina; Fabrizio Panebianco
    Abstract: This paper addresses theoretically the question whether culture has an effect on economic performance in team production, and which would be the optimal team culture. The members of the team are guided both by economic incentives and by personal norms, weighed according to their prevailing level of materialism. We assume that personal norms evolve following a dynamics driven by a combination of psychological mechanisms such as consistency and conformism. The different vectors of materialism, consistency and conformity shared by the group result in a continuum of cultures with different combinations of individualism and collectivism. Our main results show how team culture turns out to be a fundamental determinant for group performance. When income distribution is not completely egalitarian or the members of the team display heterogeneous levels of skills, culture matters in the sense that there exists an optimal culture that maximizes team production and its characteristics depend on the speci c distributions of income and skills. A higher average productivity or a more inegalitarian dispersion of remunerations requires a more collectivist culture. And a higher dispersion of individual productivities requires a more individualist culture.
    Date: 2016
  12. By: Koralova, Petya
    Abstract: The organization and management of human resources in maritime transport have their characteristics as they are an integral part both of the transportation process and the efficient and productive carrying out of the main and secondary services at ports. In this regard the main objective of the current paper is to examine the human resources management at Bulgarian sea ports Varna and Burgas in order their specifics to be revealed, the main problems to be outlined and measures to be proposed. The proposed model for analysis could be successfully applied in studying the human resources management system in the other transport modes or in other countries with transition economies.
    Keywords: human resources; sea ports; effective management
    JEL: J21 R49
    Date: 2016–11–05
  13. By: Nico Schutte (North West University); Sonia Swanepoel (North West University)
    Abstract: In the current business world we find that the term human resource professional is used loosely by anybody functioning in this role, However, HR specialists are ‘professional’ because they demonstrate proficiency in doing their work. We see that a professional occupation such as medicine, accounting or law could, nonetheless, be defined as one that gives their members due to their association exclusive rights to practice their profession. Hence, a profession is not so much an occupation as a way to regulate and or legalize an occupation. Therefore, in its current state human resource management is clearly not matching up to this category.This study adopts the notion that the required professional status as in the case of a professional occupation such as medicine can only be achieved through the establishment of inherent competencies in human resource management. The inherent competencies summarise the capabilities that are important across all jobs and that HR professionals need to poses in order to contribute to organisational success. At the same time, the importance of Core Competencies may vary according to the specific job duties and requirements. These inherent competencies help to promote a competency framework that could assist organisations in pursuing excellence of the company. This framework has been produced as a basis, which sets out the core competencies that are expected of all HR professionals. It also functions as a reference for HR Professionals and for their employers to help them focus on developing core HR competencies
    Keywords: Human Resources management. Professionalism, Occupation, Framework
    JEL: J24

This nep-hrm issue is ©2016 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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