nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2018‒02‒05
nine 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 Cassar, Lea; Meier, Stephan
  2. Friends or Foes? Optimal Incentives for Reciprocal Agents By Luca Livio
  3. In Search of Organizational Alignment Using a 360 Assessment System: Evidence from a Retail Chain By Carolyn Deller; Susanna Gallani; Tatiana Sandino
  4. Importance Degree of eHRM and its Impact on Various Administrative Levels in Palestinian Universities By Mazen J. Al Shobaki; Samy S. Abu Naser; Youssef M. Abu Amuna; Suliman A. El Talla
  5. Subjectivity in Tournaments: Implicit Rewards and Penalties and Subsequent Performance By Wei Cai; Susanna Gallani
  6. Skills, Signals, and Employability: An Experimental Investigation By Piopiunik, Marc; Schwerdt, Guido; Simon, Lisa; Woessmann, Ludger
  7. The importance of control in managerial work By Cambalikova, Andrea; Misun, Juraj
  8. Experimenting with Career Concerns By Halac, Marina; Kremer, Ilan
  9. Does Sick Pay Affect Workplace Absence? By Bryson, Alex; Dale-Olsen, Harald

  1. By: Cassar, Lea (University of Cologne); Meier, Stephan (Columbia University)
    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.
    Keywords: prosocial incentives, Corporate Social Responsibility, signaling
    JEL: D03 C93 M52
    Date: 2017–12
  2. By: Luca Livio
    Abstract: Widely used performance-based contracts put (positive or negative) externalities on co-workers. These externalities have been proven to shape an organization’s working climate especially when workers exhibit social preferences. However, it is a priori unclear whether a more friendly or a more competitive working environment should be encouraged. In this paper I consider a theoretical model in which a self-interested principal has to motivate a set of agents. Agents are symmetric, potentially risk-averse and exhibit reciprocity concerns towards each other. The optimal incentive scheme is derived solving a psychological game with asymmetric information about effort choices. I show that the optimal incentive design depends on the interplay between the agents’ attitudes towards risks and their preferences for reciprocity. In particular, the optimal scheme implements (i) a relative performance compensation scheme which induces an exchange of unkindness if agents are relatively little risk averse and (ii) a joint performance compensation scheme which induces an exchange of kindness if agents are sufficiently risk averse. My findings can explain some puzzling empirical results.
    Keywords: Gift Exchange, Group Production, Incentives, Moral Hazard, Reciprocity, Team, Tournament
    Date: 2018–01
  3. By: Carolyn Deller (University of Pennsylvania); Susanna Gallani (Harvard Business School, Accounting and Management Unit); Tatiana Sandino (Harvard Business School, Accounting and Management Unit)
    Abstract: We analyze the effects of increasing the salience of corporate values in an organization rewarding its employees based on financial performance. We use data from a field experiment conducted at an Indian mobile phone retail chain that implemented a 360° performance assessment system focused on organizational values. We find a counterintuitive result: the intervention drove even higher effort on dimensions of short term financial performance associated with pre-existing monetary incentives, but did not substantially affect nonfinancial performance dimensions linked to long term organizational goals. Our setting allows us to explore the effects of underlying counterbalancing mechanisms. While the 360° system drives higher effort to benefit the organization, consistent with the system improving goal clarity, activating organizational identification or increasing implicit incentives, it may not improve all of the dimensions of performance intended to promote organizational alignment. Increasing employees' multitasking requirements, without adequate support and training, can generate confusion, which, in turn, can drive effort away from the sources of confusion and toward known elements of performance. Our findings provide insights about benefits and pitfalls that managers may need to consider when implementing 360° performance assessment programs as a complement to incentives based on financial performance.
    Keywords: 360-degree assessments, corporate values, organizational identity, implicit incentives, multitasking, goal clarity, field experiment.
    Date: 2017–12
  4. By: Mazen J. Al Shobaki (Department of Information Technology - Al-Azhar University); Samy S. Abu Naser (Department of Information Technology - Al-Azhar University); Youssef M. Abu Amuna (Department of Information Technology - Al-Azhar University); Suliman A. El Talla
    Abstract: This study aims to identify the degree of importance of human resources management electronically and its impact on the different administrative levels in the Palestinian universities. The study population consists of the different administrative levels in the universities. The number of employees reached (239). The study sample consisted of (148) individuals from the different administrative levels and (35) from IT centers. The response rate was (84.31%). The researchers used the questionnaire as a tool for study and the analytical descriptive approach to achieve the objectives of the study. The SPSS program was used to analyze the study data. The results of the study showed that the clarity of the importance of human resources management electronically and the support of senior management are available and contribute greatly to the process of transition to electronic management in general and e-HRM in particular. There is clarity in the sample of the study of the importance of human resources management electronically, fully aware of their multiple benefits, this greatly helps to adopt and develop e-HRM and the development of the members of the study from the higher administrative levels and those who influence decision-making. The University's system of human resources management varies in different ways from one university to another and has a significant impact on human resources management electronically, and researchers explain this difference due to the different priorities of universities and their development plans and their material and human resources. The concept of e-management is a broad concept, encompassing several different electronic systems, and the transition to it requires extensive changes, from organizational structure to business processes. The most important electronic management systems that universities develop according to their need are electronic human resources systems. Universities also provide different means of communication with their employees using various ICT means such as e-mail and SMS. The use of e-HR forms is still very limited and greatly reduces e-HRM benefits. Self-service systems are not interrelated with pay and pay systems and researchers explain this because e-HRM systems are not complete at universities. Universities follow a strategy of combining traditional and electronic business, a positive indicator of the transition to e-management. The study reached several recommendations with the aim of benefiting from the promotion of the electronic management approach. The most important of these recommendations is the establishment of official and practical approaches to electronic administration and its systems. To keep abreast of the rapid changes in electronic management and ICT tools and means. The development of the administrative structure of universities commensurate with the process of change to electronic management. E-HRM development in universities, as they have a key role to play in the success of the transition to e-management. Expand the use of electronic forms to manage the affairs of employees to take advantage of its multiple advantages such as reducing expenses and reduce the time of completion of transactions. The adoption of internal electronic correspondence instead of paper, which contributes significantly to reduce administrative financial expenses, and the speed of completion of work. The integration of computerized management information systems and the linking of what is currently fully established as the beginning of a gradual transition to electronic management. For example, the pay system can be linked to the attendance system, self-service, or performance appraisal with the pay system.
    Keywords: Palestinian universities,higher education institutions,administrative levels,Electronically Human resources management
    Date: 2017
  5. By: Wei Cai (Harvard Business School); Susanna Gallani (Harvard Business School, Accounting and Management Unit)
    Abstract: This study explores the effects of subjective adjustments of objective performance rankings in a tournament incentive contract including both rewards and penalties. While prior research focuses predominantly on ex-ante incentive effects of tournament systems, we explore the consequences of awarding rewards and penalties subjectively. We extend the literature on the tradeoffs associated with subjectivity in performance evaluations by describing the effects of implicit penalties (rewards), whereby workers ranked at the top (bottom) of objective performance rankings fail to receive the reward (penalty) due to management's subjective performance evaluations. Using data from a field setting where incentive contracts are structured as a repeated tournament with no carry-over of performance across periods, we predict and find that workers subject to implicit rewards (penalties) exhibit performance reactions that counterbalance those of workers receiving subjective penalties (rewards). While the net performance effect of subjective rewards and implicit penalties is not significantly different than zero, we find that the net performance effect of subjective penalties and implicit rewards is significantly positive. Our study documents effects of subjective evaluations that might alter the effectiveness of tournament incentive systems, and are relevant for the practice of management accounting.
    Keywords: Tournaments, Subjective Performance Evaluation, Relative Performance Evaluation, Implicit Rewards and Penalties
    Date: 2017–12
  6. By: Piopiunik, Marc (ifo Institute at the University of Munich); Schwerdt, Guido (University of Konstanz); Simon, Lisa (ifo Institute at the University of Munich); Woessmann, Ludger (ifo and LMU Munich)
    Abstract: As skills of labor-market entrants are usually not directly observed by employers, individuals acquire skill signals. To study which signals are valued by employers, we simultaneously and independently randomize a broad range of skill signals on pairs of resumes of fictitious applicants among which we ask a large representative sample of German human-resource managers to choose. We find that signals in all three studied domains - cognitive skills, social skills, and maturity - have a significant effect on being invited for a job interview. Consistent with the relevance, expectedness, and credibility of different signals, the specific signal that is effective in each domain differs between apprenticeship applicants and college graduates. While GPAs and social skills are significant for both genders, males are particularly rewarded for maturity and females for IT and language skills. Older HR managers value school grades less and other signals more, whereas HR managers in larger firms value college grades more.
    Keywords: signals; cognitive skills; social skills; resume; hiring; labor market;
    JEL: J24 J21
    Date: 2018–01–15
  7. By: Cambalikova, Andrea; Misun, Juraj
    Abstract: Control represents a process through which managers ensure that resources are procured and used efficiently and effectively to meet the goals of the organization. It is a dynamic function interrelated with the other management functions, and it plays a role of critical determinant in achieving organizational success. The individual management functions provide a useful framework for organizing managerial knowledge. Control involves tracking, measuring, and correcting activities to ensure a compliance of actual development with the planned one. Effective controlling requires the existence of plans, since planning provides the necessary performance standards or objectives. Controlling also requires a clear understanding of where responsibility for deviations from standards lies. The paper contains the results of questionnaire survey realized in 331 companies aimed to determine the importance of control process in carrying out daily managerial tasks in different types of organizations active in various sectors. We analyze the attitudes of managers when they are controlling and when they are being controlled with emphasis on main reasons. The paper confirms the importance of control in management work, while one of the most obvious benefits of controlling function is that it provides the accurate information which is wanted for effective decision making process as well as maintaining effective functioning state of a business.
    Keywords: management function, importance of control, managerial work
    JEL: M10 M19
    Date: 2017
  8. By: Halac, Marina; Kremer, Ilan
    Abstract: A manager who learns privately about a project over time may want to delay quitting it if recognizing failure/lack of success hurts his reputation. In the banking industry, managers may want to roll over bad loans. How do distortions depend on expected project quality? What are the effects of releasing public information about quality? A key feature of banks is that they learn about project quality from bad news, i.e. a default. We show that in such an environment, distortions tend to increase with expected quality and imperfect information about quality. Results differ if managers instead learn from good news.
    Keywords: bad loans; banks; career concerns; Dynamic games; private learning; strategic experimentation
    JEL: C73 D83 G21
    Date: 2018–01
  9. By: Bryson, Alex (University College London); Dale-Olsen, Harald (Institute for Social Research, Oslo)
    Abstract: Higher replacement rates often imply higher levels of absenteeism, yet even in generous welfare economies, private sick pay is provided in addition to the public sick pay. Why? Using comparative workplace data for the UK and Norway we show that the higher level of absenteeism in Norway compared to UK is related to the threshold in the Norwegian public sick pay legislation. This threshold's importance is confirmed in a Regression Kinked Design (RKD) analysis on the Norwegian micro-data. Private sick pay is provided as an employer-provided non-wage benefit and when training costs are high.
    Keywords: absenteeism, public sick pay, private sick pay, comparative
    JEL: H31 J22 J28 J32
    Date: 2017–12

This nep-hrm issue is ©2018 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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