nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2017‒04‒09
eight papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Worker Overconfidence: Field Evidence and Implications for Employee Turnover and Returns from Training By Mitchell Hoffman; Stephen V. Burks
  2. Do I care if you are paid? A field experiment on charitable donations By Gneezy, Uri; Rau, Holger; Samek, Anya; Zhurakhovska, Lilia
  3. Firms' global engagement and management practices By Görg, Holger; Hanley, Aoife
  4. Time To Go? Head Coach Quits and Dismissals in Professional Football By Alex Bryson; Babatunde Buraimo; Rob Simmons
  5. From Salary to the Performance-Based Remuneration of Russian Physicians: How Motivation at Work is Changing By Sergey Shishkin; Aleksandr Temnitsky
  6. The adaptation of management control systems to different agents By Zhang, Jingwen
  7. Can a Bonus Overcome Moral Hazard? An Experiment on Voluntary Payments, Competition, and Reputation in Markets for Expert Services By Angelova, Vera; Regner, Tobias
  8. Women form social networks more selectively and less opportunistically than men By Friebel, Guido; Lalanne, Marie; Richter, Bernard; Schwardmann, Peter; Seabright, Paul

  1. By: Mitchell Hoffman; Stephen V. Burks
    Abstract: Combining weekly productivity data with weekly productivity beliefs for a large sample of truckers over two years, we show that workers tend to systematically and persistently over-predict their productivity. If workers are overconfident about their own productivity at the current firm relative to their outside option, they should be less likely to quit. Empirically, all else equal, having higher productivity beliefs is associated with an employee being less likely to quit. To study the implications of overconfidence for worker welfare and firm profits, we estimate a structural learning model with biased beliefs that accounts for many key features of the data. While worker overconfidence moderately decreases worker welfare, it also substantially increases firm profits. This may be critical for firms (such as the main one we study) that make large initial investments in worker training.
    JEL: D03 J24 J41 M53
    Date: 2017–03
  2. By: Gneezy, Uri; Rau, Holger; Samek, Anya; Zhurakhovska, Lilia
    Abstract: This study investigates how information on solicitors' compensation affects charitable giving in a door-to-door field experiment with more than 2,800 households. We vary whether solicitors are paid or not and the information about this compensation that potential donors receive. Relative to the treatment in which potential donors are not informed about the solicitor's compensation, donations increase by 16% when potential donors are informed that solicitors are paid, but are not effected when donors are informed that solicitors are unpaid. The effect is driven by female donors, who increase their donations by 88%. Our findings suggest that if charities pay their solicitors, it could be beneficial to communicate this information to donors.
    Keywords: charitable giving,field experiment,information
    Date: 2017
  3. By: Görg, Holger; Hanley, Aoife
    Abstract: We investigate whether firms' "global engagement", either in the form of exporting or opening up affiliates abroad, is related to the change in their management performance. We use new and unique data from a recent large scale firm survey of management practices in Germany. We calculate management scores for firms as in Bloom et al. (2013), which indicate how structured management is in a given firm. We find that switching into exporting, and to a lesser degree opening up affiliates abroad, is related to improving management performance in the sense of having more structured management practices.
    Keywords: management practices,global engagement,exporting,outward investment
    JEL: F2 L2 M2
    Date: 2017
  4. By: Alex Bryson (University College London, National Institute of Social and Economic Research and Institute for the Study of Labor); Babatunde Buraimo (University of Liverpool); Rob Simmons (Lancaster University)
    Abstract: That football Head Coaches will be dismissed for poor performance and will quit when they have better outside options seems to be nothing more than a statement of the obvious. But owners may find it hard to distinguish poor performance from bad luck and may find it difficult to identify and attract talented managers from other clubs. Indeed, most of the literature indicates little improvement in team performance when one coach replaces another. Equally, Head Coaches may have few options to move to better clubs even when they are performing well. We identify significant differences between determinants of quits and dismissals that are largely consistent with a standard model which predicts departures occur when the value of the job match specific surplus for one or both parties falls below the value of outside options. However, dismissals and quits are more common in Italy and Spain than in Germany and France, suggesting institutions may be important. We discuss the implications of our findings in the context of principal-agent theory and the wider literature on turnover among CEOs and other corporate leaders.
    Keywords: Quits; Dismissals; Layoffs; Managerial performance; Team performance; Football; Survival analysis; Competing risks
    JEL: J23 J24 J63 J64
    Date: 2017–04–01
  5. By: Sergey Shishkin (National Research University Higher School of Economics); Aleksandr Temnitsky (National Research University Higher School of Economics)
    Abstract: This paper examines changes in the motivation of physicians at work since the start of the salary reforms in 2008. These reforms included a shift from a fixed salary system to performance-based remuneration and an overall increase in salaries. The data of six surveys of health workers from 2007–2016 were used to reveal physician’s motives at work and to track the changes during this period. The changes were minor, and the directions of these changes were contrary to the expected strengthening of financial motivation at work: the importance of earning money is no longer primary. The share of doctors willing to work more and better on the condition of linking salary with labour contribution did not increase. In contrast, almost 66% of physicians believe that they are working at a high level of quality and performance.The majority of physicians desire an increase in the base salary, not the performance-based part. Doctors who receive bonuses for the intensity, quality and performance of their work, and those who have a higher salary overall also wish to see a higher base salary. This is a clear indication that they wish to strengthen the protective function of the base salary rather than to have increased opportunities for earning money
    Keywords: health care, physicians, salary, performance based remuneration, motivation at work, incentives.
    JEL: I18 J08 J31
    Date: 2017
  6. By: Zhang, Jingwen (Tilburg University, School of Economics and Management)
    Abstract: Management control systems are commonly used by firms, but it is challenging to design an optimal control system because of the complexity of organizational contexts, and varieties of individuals with different preferences, beliefs and work relations within firms. In this dissertation, I examine how firms can adjust control decisions, such as target setting and monitoring intensity, to agents with different traits. I also study the outcome of implementing different controls, to describe how firms can benefit from this adaptation. In Chapter 2 we investigate how a principal can reduce the costs caused by explicit incentive contracts. We expect that the relation between principal and agents developed through repeated interactions can influence the target update process and help to mitigate the target ratchet effect. Using the data from a dealership, we empirically show that principals ratchet targets less for committed dealers in order to mute perverse effects of target ratcheting, and this motivates committed dealers to exert effort. Chapter 3 discusses the rationale of using same nonfinancial targets for each business unit (uniform targets) and investigates how to support the achievability of these targets, as uniform targets are not adjusted according to individual ability. We argue that firms may exploit the cause-and-effect relations between different performance measures to increase the achievability of nonfinancial targets (wage budget-employee satisfaction-customer satisfaction-revenue chain). We find that firms grant more wage budgets to managers who deliver substandard nonfinancial performance but outperform their peers, to facilitate their nonfinancial performance. Chapter 4 explores whether supervisors are able to know their agents and adapt monitoring intensity according to the tenure and confidence level of different agents. We predict and find that supervisors impose less monitoring to well-performed junior agents so that juniors can experiment and develop knowledge. We also find that monitoring increases for overconfident managers to control their risk-taking behavior. These results suggest that supervisors can indeed modify their level of direct supervision according to agent’s personal makeup and characteristics.
    Date: 2017
  7. By: Angelova, Vera (TU Berlin); Regner, Tobias (Friedrich Schiller University Jena)
    Abstract: Interactions between players with private information and opposed interests are often prone to bad advice and inefficient outcomes, e.g. markets for financial or health care services. In a deception game we investigate experimentally which factors could improve advice quality. Besides advisor competition and identifiability we add the possibility for clients to make a voluntary payment, a bonus, after observing advice quality. We observe a positive effect on the rate of truthful advice when the bonus creates multiple opportunities to reciprocate, that is, when the bonus is combined with identifiability (leading to several client-advisor interactions over the course of the game) or competition (allowing one advisor to have several clients who may reciprocate within one period).
    Keywords: Asymmetric information; principal-agent; expert services; deception game; sender-receiver game; reciprocity; reputation; experiments; voluntary payment; competition;
    JEL: C91 D03 D82 G20 I11
    Date: 2017–03–29
  8. By: Friebel, Guido; Lalanne, Marie; Richter, Bernard; Schwardmann, Peter; Seabright, Paul
    Abstract: We test two hypotheses, based on sexual selection theory, about gender differences in costly social interactions. Differential selectivity states that women invest less than men in interactions with new individuals. Differential opportunism states that women's investment in social interactions is less responsive to information about the interaction's payoffs. The hypotheses imply that women's social networks are more stable and path dependent and composed of a greater proportion of strong relative to weak links. During their introductory week, we let new university students play an experimental trust game, first with one anonymous partner, then with the same and a new partner. Consistent with our hypotheses, we find that women invest less than men in new partners and that their investments are only half as responsive to information about the likely returns to the investment. Moreover, subsequent formation of students' real social networks is consistent with the experimental results: being randomly assigned to the same introductory group has a much larger positive effect on women's likelihood of reporting a subsequent friendship.
    Keywords: social networks,gender differences,trust game
    JEL: C91 D81 J16
    Date: 2017

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