nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2017‒07‒16
nine papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. First-place loving and last-place loathing: How rank in the distribution of performance affects effort provision By David Gill; Zdenka Kissova; Jaesun Lee; Victoria Prowse
  2. Social trust, workplace organization, and the comparative advantage of nations By van Hoorn, Andre
  3. Increasing the Well-Being of Others On-the-Job and Outside the Workplace By Max van Lent
  5. The performance effects of gender diversity on bank boards By Owen, Ann L.; Temesvary, Judit
  6. The Causal Impact of Social Connections on Firms' Outcomes By Eliason, Marcus; Hensvik, Lena; Kramarz, Francis; Nordstrom Skans, Oskar
  7. Working from Home and the Willingness to Accept a Longer Commute By de Vos, Duco; Meijers, Evert J.; van Ham, Maarten
  8. Impact of Organizational Culture on the Pakistani Hotels Workforce's Job Satisfaction: Qualitative Report By Zahid, Marium; Shaikh, Taha; Zehra, Syeda Zufiesha
  9. Knowing me, knowing you? Similarity of the CEO and fund manager's investment decision By Jaspersen, Stefan; Limbach, Peter

  1. By: David Gill; Zdenka Kissova; Jaesun Lee; Victoria Prowse
    Abstract: Rank-order relative-performance evaluation, in which pay, promotion, symbolic awards and educational achievement depend on the rank of individuals in the distribution of performance, is ubiquitous. Whenever organizations use rank-order relative-performance evaluation, people receive feedback about their rank. Using a real-e?ort experiment, we aim to discover whether people respond to the specific rank that they achieve. In particular, we leverage random variation in the allocation of rank among subjects who exerted the same effort to obtain a causal estimate of the rank response function that describes how effort provision responds to the content of rank-order feedback. We find that the rank response function is U-shaped. Subjects exhibit ‘first-place loving’ and ‘last-place loathing’, that is subjects work hardest after being ranked first or last. We discuss implications of our findings for the optimal design of performance feedback policies, workplace organizational structures and incentives schemes.
    Keywords: Relative performance evaluation; Relative performance feedback; Rank order feedback; Dynamic effort provision; Real effort experiment; Flat wage; Fixed wage; Taste for rank; Status seeking; Social esteem; Self esteem; Public feedback; Private feedback
    JEL: C23 C91 J22 M12
    Date: 2017–06
  2. By: van Hoorn, Andre
    Abstract: In this paper, I consider a specific channel through which trust between parties to an exchange can go on to affect nations’ comparative advantage in certain industries. My approach revolves around the autonomy that employers (principals) grant to workers (agents), which is a key feature of workplace organization. I hypothesize that social trust generates a comparative advantage in industries with more autonomous micro production environments. I employ individual-level data on work autonomy to construct a measure of the extent to which industries are characterized by autonomy in the production process. Results of a cross-country cross-industry analysis confirm that countries with higher levels of social trust have a comparative advantage in high-autonomy industries and vice versa. Results are robust to the possibility of reverse causality. The paper’s key contribution is to provide a link between the microeconomic literature on workplace organization and the comparative macroeconomic literature on social trust.
    Keywords: Social capital; work autonomy; comparative economic development; division of labor; comparative advantage; organizational design; culture
    JEL: D23 L23 M54 O43 O57 P50 Z10
    Date: 2017
  3. By: Max van Lent (Erasmus University Rotterdam, the Netherlands)
    Abstract: We study the relationship between workers' opportunities to help others on-the-job and volunteering behavior outside the workplace. We predict that there is substitutability between workers' contribution to other peoples' well-being by exerting effort on-the-job and outside the workplace. We test this prediction using rich data from the Dutch LISS Panel. We exploit variation in workers' opportunities to help others on-the-job from two sources: i) workers' job switching behavior and ii) changes in workers' opportunities to help others on their current job through plausibly exogenous changes in workers' match of mission preferences with their employer. We find some support for our prediction.
    Keywords: altruism; charitable donations; volunteering; public sector employment; job switchers; mission motivation
    JEL: D64 H11 J45 M50
    Date: 2017–06–23
  4. By: Maria De Paola; Francesca Gioia; Fabio Piluso (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria)
    Abstract: We ran a field experiment to investigate whether nudge policies, consisting in behavioural insight messaging, help to improve performance in financial trading. Our experiment involved students enrolled in a financial trading course in an Italian University who were invited to trade on Borsa Italiana’s virtual platform. Students were randomly assigned to a control group and a treatment group. Treated students received a message reminding them of the existence of behavioural biases in financial trading. We find that treated students significantly improve the performance of their portfolio. This effect is mainly driven by students with a higher than average risk aversion. Several behaviours may explain the increase in performance. We find evidence pointing to a reduction in the home and status quo biases for risk averse nudged participants.
    Keywords: Financial trading, Behavioural biases, Reminders, Nudges, Home bias, Status quo bias, Risk aversion
    JEL: D14 E21 E22 O16
    Date: 2017–07
  5. By: Owen, Ann L.; Temesvary, Judit
    Abstract: Previous literature has shown mixed results on the role of female participation on bank boards and bank performance: some find that more women on boards enhance financial performance, while others find negative or no effects. Applying Instrumental Variables methods to data on approximately 90 US bank holding companies over the 1999-2015 period, we argue that these inconclusive results are due to the fact that there is a non-linear, U-shaped relationship between gender diversity on boards and various measures of bank performance: female participation has a positive effect once a threshold level of gender diversity is achieved. Furthermore, this positive effect is only observed in better capitalized banks. Our results suggest that continuing the voluntary expansion of gender diversity on bank boards will be value-enhancing, provided that they are well capitalized.
    Keywords: Bank performance; Gender Diversity; Instrumental Variables Estimation
    JEL: G21 G34 J16
    Date: 2017–07–07
  6. By: Eliason, Marcus; Hensvik, Lena; Kramarz, Francis; Nordstrom Skans, Oskar
    Abstract: The paper studies how social connections affect firm-level hiring decisions and performance. We use register data to characterize the social connections of firms' employees. For causal identification, we use displacements which create directed supply shocks towards the firms of the displaced workers' social connections. We make sure that our results are fully driven by these directed supply shocks. Results show that firms appear to prefer employed workers they are connected to over unconnected or unemployed workers when hiring. The employed and connected mostly go to high-productivity firms whereas the unemployed and unconnected tend to go to low-productivity firms. Strong connections - family, recent, durable, formed in small groups, between socially similar agents - matter the most. Displacements shocks cause connected firms, in particular low-productivity ones, to hire those workers they are connected to. Unconnected hires and separations are essentially unaffected. These supply shocks therefore cause the creation of additional jobs which increase firms' employment. In addition, we use these shocks to show that hiring connected workers has a positive causal impact on firm performance. These results are consistent with a stylized framework where connections reduce hiring frictions and where the firm-level possibility to hire connected workers is a function of changing outside options of these workers.
    Keywords: job creation; Job Displacement; job search; networks
    JEL: J23 J30 J60
    Date: 2017–07
  7. By: de Vos, Duco (Delft University of Technology); Meijers, Evert J. (Delft University of Technology); van Ham, Maarten (Delft University of Technology)
    Abstract: It is generally found that workers are more inclined to accept a job that is located farther away from home if they have the ability to work from home one day a week or more (telecommuting). Such findings inform us about the effectiveness of telecommuting policies that try to alleviate congestion and transport related emissions, but they also stress that the geography of labour markets is changing due to information technology. We argue that estimates of the effect of working from home on commuting time are biased downward because most studies ignore preference based sorting (self-selection): workers who dislike commuting, and hence have shorter commutes, might also be more likely to work from home. In this paper we investigate to what extent working from home affects the willingness to accept a longer commute and we control for preference based sorting. We use 7 waves of data from the Dutch Labour Supply Panel and show that on average telecommuters have a 50 percent higher marginal cost of one-way commuting time, compared to non-telecommuters. We estimate the effect of telecommuting on commuting time using a fixed-effects approach and we show that preference based sorting biases cross-sectional results 27-28 percent downwards. Working from home allows people to accept 5.7 percent longer commuting times on average, and every additional 8 hours of working from home are associated with 3 percent longer commuting times.
    Keywords: telecommuting, commuting time, job search, job mobility, labour market area
    JEL: J32 R11 R41
    Date: 2017–07
  8. By: Zahid, Marium; Shaikh, Taha; Zehra, Syeda Zufiesha
    Abstract: The influence of organizational culture on the level of job satisfaction depends on the ability to cope up with the stress and working environment. This investigation tackle the purpose of Denison’s prototypical for searching the organizational culture and Spector JGS assessment to inspect workforce job gratification in the course of 5 points Likert Scale. The investigation studied 220 hotel employees from middle range 3 star hotels in Pakistan. For interpretation, researchers chiefly used MS Excel for classifying, coding, and fractionizing raw facts into processed meaningful themes. Current investigation demonstrates that employee’s job satisfaction chiefly dependent on organizational culture. The study undertakes in the direction of achieving organizational goals by initiating fortify strategies towards building the strength to obtain the objective. Moreover if organizations built a strong environment of learning as a part of their culture than it boosts the commitment level of employees. Further, it also helps employees to unfolding their career achievements. On the other hand, it is observed that females are occupied with higher level of job satisfaction while males have lower. Although, high level of job satisfaction exists but its more evident by this research that premiums, bonuses, and other types of incentives aid employees to lead from low level of job satisfaction to reach on their higher apex level of job satisfaction.
    Keywords: Organizational culture, financial rewards, job satisfaction, hotel workforce, gender perspective
    JEL: I0 I15 L21 L83 M0 M12 M14 Z10
    Date: 2017–05–10
  9. By: Jaspersen, Stefan; Limbach, Peter
    Abstract: We study whether investors' demographic similarity to CEOs affects their investment decisions. Mutual fund managers are found to overweight firms led by CEOs who resemble them in terms of age, ethnicity and gender. This finding is robust to excluding educational and local ties and is supported by variation in similarity caused by CEO departures. Investing in firms run by similar CEOs, on average, is associated with superior performance and is more pronounced when uncertainty is higher. Results suggest that demographic similarity to CEOs facilitates informed trading. They further suggest that CEOs matter to investors.
    Keywords: CEO-investor similarity,familiarity bias,information advantages,investment decisions,mutual fund performance
    JEL: G11 G23 J10
    Date: 2017

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