nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2018‒01‒08
seven papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Intentions for Doing Good Matter for Doing Well: The (Negative) Signaling Value of Prosocial Incentives By Lea Cassar; Stephan Meier
  2. Does a Short-Term Increase in Incentives Boost Performance? By Angelova, Vera; Giebe, Thomas; Ivanova-Stenzel, Radosveta
  3. Friends and Foes at Work: Assigning Teams in a Social Network By Daske, Thomas
  4. The Relative Importance of Personal Characteristics for Job Offers By Peter Hoeschler; Uschi Backes-Gellner
  5. Measuring Indirect Effects of Unfair Employer Behavior on Worker Productivity: A Field Experiment By Heinz, Matthias; Jeworrek, Sabrina; Mertins, Vanessa; Schumacher, Heiner; Sutter, Matthias
  6. When Corporate Social Responsibility Backfires: Theory and Evidence from a Natural Field Experiment By John List; Fatemeh Momeni
  7. CEO-speeches and stock returns By Bannier, Christina; Pauls, Thomas; Walter, Andreas

  1. By: Lea Cassar; Stephan Meier
    Abstract: Prosocial incentives and Corporate Social Responsibility (CSR) initiatives are seen by many firms as an effective way to motivate workers. Recent empirical results seem to support the expectation that prosocial incentive, e.g. in the form of a charitable donations by the firm, can increase effort and motivation – sometimes even better than monetary incentives. We argue that the benefits crucially depend on the perceived intention of the firm. Workers use prosocial incentives as a signal about the firm's type and if used instrumentally in order to profit the firm, they can backfire. We show in an experiment in collaboration with an Italian firm, that monetary and prosocial incentives work very differently. While monetary incentives used instrumentally increase effort, instrumental charitable incentives backfire compared to non-instrumental incentives. This is especially true for non-prosocially-motivated workers who do not care about the prosocial cause but use prosocial incentives only as a signal about the firm. The results contribute to the understanding of the limits of prosocial incentives by focusing on their signaling value to the agent about the principal's type.
    JEL: C93 D03 M52
    Date: 2017–12
  2. By: Angelova, Vera (TU Berlin); Giebe, Thomas (Linnaeus University); Ivanova-Stenzel, Radosveta (TU Berlin)
    Abstract: If agents are exposed to continual competitive pressure, how does a short-term variation of the severity of the competition affect agents\' performance? In a real-effort laboratory experiment, we study a one-time increase in incentives in a sequence of equally incentivized contests. Our results suggest that a short-term increase in incentives induces a behavioral response but does not boost total performance.
    Keywords: contest; tournament; real-effort; experiment; contract theory; forward-looking;
    JEL: C91 D91 J22 J33
    Date: 2017–12–28
  3. By: Daske, Thomas
    Abstract: In many firms, production requires the division of staff into teams. If only team performance is observable, moral hazard in teams is inevitable. This variant of moral hazard can be overcome or exacerbated by the interpersonal relationships among team members. I investigate how the division of staff into teams should account for the agents' social network of interpersonal relationships. Considering piece rate compensation for teams, I identify rules for efficient team assignment. Depending on the shape of individual effort costs, team assignment follows either a maximin or maximax rule with regard to team members' willingness to cooperate. Generally, the preferences of staff for team composition can collide with efficient production. A universal mechanism guaranteeing efficiency while delegating responsibility for team assignment to the agents does not exist. Successful staffing thus requires knowledge of the interpersonal relationships at work and, at times, control instead of delegation.
    Keywords: staffing,social preferences,social network,delegation,control
    JEL: D74 D82 D85 M54
    Date: 2017
  4. By: Peter Hoeschler (University of Zurich); Uschi Backes-Gellner (University of Zurich)
    Abstract: We investigate the relative importance of different personal characteristics for firms' hiring decisions. Our design allows firms to observe potential workers during a long screening period. At the end of that period firms can decide to make job offers, thereby revealing their preferences about workers' personal characteristics. We connect real-world job offers and workers' personal characteristics, both of which are usually unobserved. To investigate the relative importance of various personal characteristics for the likelihood to receive a job offer, we use a unique panel data set of entry-level workers. We find that grades and non-cognitive skills are important for receiving a job offer, with the Big Five Personality traits being the most important predictor. We find no effects for intelligence or economic preferences.
    Keywords: Job Offers, Ability, Non-Cognitive Skills, Preferences, Vocational Education
    JEL: D03 M51 J24
    Date: 2017–12
  5. By: Heinz, Matthias (University of Cologne); Jeworrek, Sabrina (IWH Halle); Mertins, Vanessa (University of Vechta); Schumacher, Heiner (KU Leuven); Sutter, Matthias (Max Planck Institute for Research on Collective Goods)
    Abstract: We present a field experiment in which we set up a call-center to study how the productivity of workers is affected if managers treat their co-workers in an unfair way. This question cannot be studied in long-lived organizations since workers may change their career expectations (and hence effort) when managers behave unfairly towards co-workers. In order to rule out such confounds and to measure productivity changes of unaffected workers in a clean way, we create an environment where employees work for two shifts. In one treatment, we lay off parts of the workforce before the second shift. Compared to two different control treatments, we find that, in the layoff treatment, the productivity of the remaining, unaffected workers drops by 12 percent. We show that this result is not driven by peer effects or altered beliefs about the job or the managers' competence, but rather related to the workers' perception of unfair behavior of employers towards co-workers. The latter interpretation is confirmed in a survey among professional HR managers. We also show that the effect of unfair behavior on the productivity of unaffected workers is close to the upper bound of the direct effects of wage cuts on the productivity of affected workers. This suggests that the price of an employer's unfair behavior goes well beyond the potential tit-for-tat of directly affected workers.
    Keywords: field experiment, fairness, labor markets, layoffs, gift exchange
    JEL: C93 J50 J63
    Date: 2017–11
  6. By: John List; Fatemeh Momeni
    Abstract: Corporate Social Responsibility (CSR) has become a cornerstone of modern business practice, developing from a "why" in the 1960s to a "must" today. Early empirical evidence on both the demand and supply sides has largely confirmed CSR's efficacy. This paper combines theory with a large-scale natural field experiment to connect CSR to an important but often neglected behavior: employee misconduct and shirking. Through employing more than 3,000 workers, we find that our usage of CSR increases employee misbehavior - 20% more employees act detrimentally toward our firm by shirking on their primary job duty when we introduce CSR. Complementary treatments suggest that "moral licensing" is at work, in that the "doing good" nature of CSR induces workers to misbehave on another dimension that hurts the firm. In this way, our data highlight a potential dark cloud of CSR, and serve to forewarn that such business practices should not be blindly applied.
    Date: 2017
  7. By: Bannier, Christina; Pauls, Thomas; Walter, Andreas
    Abstract: We analyze the market reaction to the sentiment of the CEO speech at the Annual General Meeting (AGM). As the AGM is typically preceded by several information disclosures, the CEO speech may be expected to contribute only marginally to investors' decision-making. Surprisingly, however, we observe from the transcripts of 338 CEO speeches of German corporates between 2008 and 2016 that their sentiment is significantly related to abnormal stock returns and trading volumes following the AGM. Using a novel business-specific German dictionary based on Loughran and McDonald (2011), we find a negative association of the post-AGM returns with the speeches - negativity and a positive association with the speeches - relative positivity (i.e. positivity relative to negativity). Relative positivity moreover corresponds with a lower trading volume in a short time window surrounding the AGM. Investors hence seem to perceive the sentiment of CEO speeches at AGMs as a valuable indicator of future firm performance.
    Keywords: Textual Sentiment,CEO Speeches,Market Efficiency,Textual Analysis,Annual General Meeting
    JEL: G02 G12 G14
    Date: 2017

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