nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2018‒02‒19
seven papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. The Effect of Incentives in Non-Routine Analytical Team Tasks - Evidence From a Field Experiment By Englmaier, Florian; Grimm, Stefan; Schindler, David; Schudy, Simeon
  2. Do Management Interventions Last? Evidence from India By Nicholas Bloom; Aprajit Mahajan; David McKenzie; John Roberts
  3. Insurance Between Firms: The Role of Internal Labor Markets By Giacinta Cestone; Chiara Fumagalli; Francis Kramarz; Giovanni Pica
  4. Relational Capital in Lending Relationships. Evidence from European Family Firms By Marco Cucculelli; Valentina Peruzzi; Alberto Zazzaro
  5. What Do Workplace Wellness Programs Do? Evidence from the Illinois Workplace Wellness Study By Damon Jones; David Molitor; Julian Reif
  6. Informal Delegation and Training By Emre Ekinci; Nikos Theodoropoulos
  7. The Effect of Physical and Cognitive Decline at Older Ages on Work and Retirement: Evidence from Occupational Job Demands and Job Mismatch By Péter Hudomiet; Michael D. Hurd; Susann Rohwedder; Robert J. Willis

  1. By: Englmaier, Florian (LMU Munich); Grimm, Stefan (LMU Munich); Schindler, David (Tilburg University); Schudy, Simeon (LMU Munich)
    Abstract: Despite the prevalence of non-routine analytical team tasks in modern economies, little is known about how incentives influence performance in these tasks. In a field experiment with more than 3000 participants, we document a positive effect of bonus incentives on the probability of completion of such a task. Bonus incentives increase performance due to the reward rather than the reference point (performance threshold) they provide. The framing of bonuses (as gains or losses) plays a minor role. Incentives improve performance also in an additional sample of presumably less motivated workers. However, incentives reduce these workers\' willingness to \"explore\" original solutions.
    Keywords: team work; bonus; incentives; loss; gain; non-routine; exploration;
    JEL: C92 C93 J33 D03 M52
    Date: 2018–02–08
  2. By: Nicholas Bloom; Aprajit Mahajan; David McKenzie; John Roberts
    Abstract: Beginning in 2008, we ran a randomized controlled trial that changed management practices in a set of Indian weaving firms (Bloom et al. 2013). In 2017 we revisited the plants and found three main results. First, while about half of the management practices adopted in the original experimental plants had been dropped, there was still a large and significant gap in practices between the treatment and control plants. Likewise, there remained a significant performance gap between treatment and control plants, suggesting lasting impacts of effective management interventions. Second, while few management practices had demonstrably spread across the firms in the study, many had spread within firms, from the experimental plants to the non-experimental plants, suggesting limited spillovers between firms but large spillovers within firms. Third, managerial turnover and the lack of Director time were two of the most cited reasons for the drop in management practices in experimental plants, highlighting the importance of key employees.
    JEL: M0 O0
    Date: 2018–01
  3. By: Giacinta Cestone (Cass Business School; ECGI); Chiara Fumagalli (Università Bocconi; CSEF; CEPR); Francis Kramarz (CREST; ENSAE); Giovanni Pica (Università della Svizzera Italiana (USI); Centro Luca D'Agliano; CSEF; Paolo Baffi Centre)
    Abstract: We investigate how internal labor markets (ILMs) allow business groups to accommodate positive and negative shocks calling for labor adjustments. Group-affliated units faced with positive shocks rely on the ILM for new hires, especially managers and other high-skilled workers, thus overcoming human capital bottlenecks that may curb growth. Adverse shocks affecting one unit in the organization increase workers' mobility to other units rather than external firms, with stricter employment protection causing an additional increase in internal mobility. ILMs emerge as a co-insurance mechanism, allowing organizations to bypass firing and hiring frictions and providing job stability to employees as a by-product.
    Keywords: Labor Market Frictions, Internal Labor Reallocation, Business Groups
    JEL: G30 L22 J20
    Date: 2017–09–14
  4. By: Marco Cucculelli; Valentina Peruzzi (Università Politecnica delle Marche); Alberto Zazzaro (University of Naples Federico II, CSEF and MoFiR.)
    Abstract: We investigate the role of a family CEO’s relational capital and a non-family CEO’s managerial abilities in the context of bank relationships for a large sample of small- and medium-sized European firms. We begin by examining whether the relational capital embodied in the family leadership of the company influences the lending relationship with the bank in terms of information sensitivity and duration. Next, we test how banks value in their credit decisions the leadership of professionals and their managerial skills with respect to the relational capital of family CEOs. The results indicate that family businesses appointing managers from within the family are significantly more likely to maintain soft-information-based and longer-lasting lending relationships. However, family executives do not have a negative impact on the firm’s access to credit, while the creation of soft-information-based and long-lasting lending relationships significantly reduce the likelihood of experiencing credit restrictions. In view of these findings, family relational capital appears to have a univocal beneficial impact on the bank–firm relationship in our sample.
    Keywords: Family firm, family CEO, soft information, relational capital, relationship lending, credit rationing
    JEL: D22 G21 G22
    Date: 2018–02–01
  5. By: Damon Jones; David Molitor; Julian Reif
    Abstract: Workplace wellness programs cover over 50 million workers and are intended to reduce medical spending, increase productivity, and improve well-being. Yet, limited evidence exists to support these claims. We designed and implemented a comprehensive workplace wellness program for a large employer with over 12,000 employees, and randomly assigned program eligibility and financial incentives at the individual level. Over 56 percent of eligible (treatment group) employees participated in the program. We find strong patterns of selection: during the year prior to the intervention, program participants had lower medical expenditures and healthier behaviors than non-participants. However, we do not find significant causal effects of treatment on total medical expenditures, health behaviors, employee productivity, or self-reported health status in the first year. Our 95% confidence intervals rule out 78 percent of previous estimates on medical spending and absenteeism. Our selection results suggest these programs may act as a screening mechanism: even in the absence of any direct savings, differential recruitment or retention of lower-cost participants could result in net savings for employers.
    JEL: I1 J3 M5
    Date: 2018–01
  6. By: Emre Ekinci; Nikos Theodoropoulos
    Abstract: This paper investigates the relationship between the firm’s incentives to provide training and to delegate authority. We consider a principal-agent model in which the firm is not able to commit to delegation contractually and the conflict of interest between the firm and the worker arises both because the latter is biased towards certain decisions and because players interpret information differently (i.e., they have differences of opinion). Our theoretical analysis consists of two parts. First, we examine the equilibrium behavior when the degree of incongruence between the firm and the worker is public information. Second, we analyze the equilibrium behavior when the firm is privately informed about its type wherein the type refers to the level of differences in opinion between the firm and the worker. This exercise shows the extent to which the firm can use training provision to convey its private information to the worker, thereby committing not to retract the agent’s authority it initially granted. In our empirical analysis, we use a cross section of matched employer-employee data of British establishments to examine the extent to which the model’s predictions are supported by data.
    Date: 2018–02
  7. By: Péter Hudomiet (RAND); Michael D. Hurd (RAND); Susann Rohwedder (RAND); Robert J. Willis (University of Michigan)
    Abstract: As workers age, their physical and cognitive abilities tend to decline. This could lead to a mismatch between workers’ resources and the demands of their jobs, restricting future work. We use longitudinal data from the Health and Retirement Study (HRS) linked to detailed occupational characteristics from the O*NET project to investigate how mismatches between job demands and workers’ resources in two physical and two cognitive domains affect retirement outcomes. We estimate how changes in physical and cognitive resources as well as their interactions with occupational job-demands affect changes in 1) subjective reports of work-limiting health problems; 2) mental health; and 3) subjective probabilities of working past age 65. We also estimate hazard models for transitions from full-time work to retirement. We found that declines in physical and cognitive resources are strong predictors of all outcomes: Fewer resources lead to greater reporting of work-limiting health problems; decline in mental health; smaller subjective probabilities of working full-time past age 65; and more transitions from work to retirement. The interaction of resources with job demands, however, is only statistically significant for workers with large-muscle limitations who are more likely to report changes in outcomes when they work in occupations that rely heavily on physical strength. In contrast, the effects of declines in fine motor skills and cognition do not show statistically significant differences by occupational job demands. It appears cognitive and fine motor skills, at least as measured in the HRS, are universally important determinants of working, not specific to certain occupations.
    Date: 2017–10

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