nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2017‒06‒11
seven papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Women in the Workplace and Management Practices: Theory and Evidence By Kato, Takao; Kodama, Naomi
  2. Applying economic psychology to the problem of executive compensation By Alexander Pepper
  3. Worker Overconfidence: Field Evidence and Implications for Employee Turnover and Returns from Training By Burks, Stephen V.; Hoffman, Mitchell
  4. Well-being, dual commitment and job insecurity of Italian agency workers. Some Evidence from a National Study on the Temporary Work Agency Industry By Stefano Consiglio; Luigi Moschera; Mariavittoria Cicellin; Laura Borgogni; Chiara Consiglio; Pietro Menatta
  5. Closing or Reproducing the Gender Gap? Parental Transmission, Social Norms and Education Choice By Humlum, Maria Knoth; Nandrup, Anne Brink; Smith, Nina
  6. Competition and Subsequent Risk-Taking Behaviour: Heterogeneity across Gender and Outcomes By Filippin, Antonio; Gioia, Francesca
  7. The Effect of Unpaid Overtime Hours on Health By Taisei Noda; Takaaki Ikeda

  1. By: Kato, Takao (Colgate University); Kodama, Naomi (Hitotsubashi University)
    Abstract: We review recent studies on management practices and their consequences for women in the work-place. First, the High Performance Work System (HPWS) is associated with greater gender diversity in the workplace while there is little evidence that the HPWS reduces the gender pay gap. Second, work-life balance practices with limited face-to-face interactions with coworkers may hamper women’s ca-reer advancement. Third, individual incentive linking pay to objective performance may enhance gen-der diversity while individual incentive with subjective performance may have an opposite effect. Fourth, a rat race model with working hours as a signal of the worker’s commitment is a promising way to explain the gender gap in promotions. Fifth, corporate social responsibility practices may increase gender diversity. We temper the findings by identifying three major methodological challenges: (i) how to measure management practices; (ii) how to account for endogeneity of management practices; and (iii) how to minimize selection bias.
    Keywords: pay for performance, incentive pay, family-friendly practices, work-life balance, high performance work system, management practices, gender pay gap, gender diversity in the labor market, promotion tournament, rat races, corporate social responsibility
    JEL: J16 M5 J7 M14
    Date: 2017–05
  2. By: Alexander Pepper
    Abstract: The conventional design of executive compensation plans is based on an outdated model of executive agency. Empirical work described in this article has provided a better understanding of the relationship between executives’ pay and their motivation by undertaking a detailed examination of the psychology of executive incentives. Four key points emerge. First, executives are much more risk averse than financial theory predicts. Secondly, executives are very high time discounters, thus reducing the perceived value of deferred rewards. Thirdly, intrinsic motivation is much more important than admitted by traditional economic theory. Fourthly, executives are more concerned about the perceived fairness of their awards relative to peers than in absolute amounts. Our research suggests that companies would be better off paying generous salaries, and using annual cash bonuses to incentivize desired actions and behaviors. Executives should be required to invest their bonuses in company shares until they have sufficient “skin in the game” to align their interests with shareholders. As far as possible the use of equity plans, especially complex, high-powered, performance-based plans should be kept to a minimum.
    Keywords: economic psychology; executive compensation; motivation theory
    JEL: J50
    Date: 2017
  3. By: Burks, Stephen V. (University of Minnesota, Morris); Hoffman, Mitchell (University of Toronto)
    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 ac-counts 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.
    Keywords: overconfidence, biased learning, turnover, truckload, firm-sponsored training, truck driver
    JEL: J24 D03 M53 J41
    Date: 2017–05
  4. By: Stefano Consiglio; Luigi Moschera; Mariavittoria Cicellin; Laura Borgogni; Chiara Consiglio; Pietro Menatta (-)
    Abstract: Although the use of agency contracts has become the norm in all public and private organizations, existing studies are mostly cross-sectional in nature, generally comparing behavioral differences between permanent full time workers with the plethora of all contingent workers, making difficult to generalize results. Few empirical investigations have so far studied attitudes and behaviors of agency workers and how the peculiar type of contract influences their work-related attitudes. In particular, there is no consensus about how agency contract affects individual behavioral and psychological variables as affective dual commitment, job insecurity, satisfaction, turnover intention. In order to fill this gap, the main goal of the study we present in this paper is to analyze well-being of Italian temporary and permanent agency workers, according to a perspective that emphasize positive aspects. We aim to understand how workers experience to be agencies, enhancing also critical implications against well-being.
    Keywords: agency workers, TWAs, well-being, dual commitment, job insecurity, Job Acts. holders
    Date: 2017–03–05
  5. By: Humlum, Maria Knoth (Aarhus University); Nandrup, Anne Brink (Aarhus University); Smith, Nina (Aarhus University)
    Abstract: Over the last decade, the economic literature has increasingly focused on the importance of gender identity and sticky gender norms in an attempt to explain the persistence of the gender gaps. Using detailed register data on the latest cohorts of Danish labour market entrants, this paper examines the intergenerational correlation in gender-stereotypical choice of education. Although to some extent picking up inherited and acquired skills, our results suggest that if parents exhibit gender stereotypical labour market behaviour, children of the same sex are more likely to choose a gender stereotypical education. The associations are strongest for sons. Exploiting the detailed nature of our data, we use birth order and sibling sex composition to shed light on the potential channels through which gender differences in educational preferences are transmitted across generations. We propose that such transmissions may attenuate the final closing of the gender gap.
    Keywords: intergenerational transmission, gender differences, gender identity, social norms
    JEL: I23 J16 J24
    Date: 2017–05
  6. By: Filippin, Antonio (University of Milan); Gioia, Francesca (University of Edinburgh)
    Abstract: This paper studies if competition affects subsequent risk-taking behaviour by means of a laboratory experiment that manipulates the degree of competitiveness of the environment under equivalent monetary incentives. We find that competition increases risk aversion, especially for males, but not in a significant manner. When conditioning on the outcome, we find that males become significantly more risk averse after losing the tournament than after randomly earning the same low payoff. In contrast, males do not become more risk-seeking after winning the tournament, while females' average risk-taking behaviour is unaffected by tournament participation and outcomes. We interpret our findings in terms of males' reaction to negative outcomes driven by intrinsic motives, such as emotions or a shift in the locus of control from internal to external.
    Keywords: competition, risk attitudes, gender
    JEL: C81 C91 D81
    Date: 2017–05
  7. By: Taisei Noda (Graduate School of Economics, Osaka University); Takaaki Ikeda (Graduate school of Economics, The University of Tokyo)
    Abstract: Do working overtime hours affect worker health? Does the effect depend on whether a worker receives overtime payment or not? In this paper, we examine the effect of overtime hours on health, paying attention to overtime payment. We use gPreference Parameters Study of Osaka University h from 2009 to 2013. The dataset enables us to control observable factors, for example: work environment, individual and household characteristics. Further, panel analysis is employed to remove unobservable heterogeneity. Our result shows a harmful effect of overtime hours to worker health. We also find that overtime hours deteriorate worker health only if the worker does not get paid for overtime.
    Keywords: working hours, overtime, reward, panel data analysis
    JEL: I12 J22 J81
    Date: 2017–05

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