nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2018‒05‒14
nine papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Diversity of employee incentives from the perspective of banks employees in Poland - empirical approach By Vladimir Davydenko; Jerzy Kaźmierczyk; Gulnara Fatykhovna Romashkina; Elżbieta Żelichowska
  2. Labor Market Quotas By Suzanne Bijkerk; Silvia Dominguez-Martinez; Jurjen Kamphorst; Otto Swank
  3. Skills, Signals, and Employability: An Experimental Investigation By Piopiunik, Marc; Schwerdt, Guido; Simon, Lisa; Woessmann, Ludger
  4. Big Business and Management: Too Many Bosses and Too Much Pay? By Lambert, Thomas
  5. Effectiveness and (in)efficiencies of compensation regulation: Evidence from the EU banker bonus cap By Colonnello, Stefano; Koetter, Michael; Wagner, Konstantin
  6. Heterogeneous human capital, inequality and growth: the role of patience and skills By Borissov, Kirill; Bosi, Stefano; Ha-Huy, Thai; Modesto, Leonor
  7. Product market competition and gender discrimination By Dudley Cooke; Ana P. Fernandes; Priscila Ferreira
  8. Competitive Pay and Excessive Manager Risk-taking By Jen-Wen Change; Simpson Zhang
  9. Socially Useless Jobs By Robert Dur; Max van Lent

  1. By: Vladimir Davydenko (Tyumen State University); Jerzy Kaźmierczyk (PUEB - Poznań University of Economics and Business); Gulnara Fatykhovna Romashkina (Tyumen State University); Elżbieta Żelichowska (PUEB - Poznań University of Economics and Business)
    Abstract: This paper examines the diversity of employee incentives from the perspective of banks employees in Poland. According to the theory, employee motivation is a very significant factor which leads to the success of the entire organization and it is closely related to the motivation system in a workplace. It is important to underline the fact that motivation system is not always well-chosen which means that it is also not efficient in each organization. What is more, it is possible to observe differentiation in used motivation incentives in banks among different groups of employees. The purpose of this study was to investigate this segmentation according to the type of bank, gender and job position. Firstly, grounded in the literature, this article explains the importance of employee motivation tools. The research among bank employees let to verify propounded in this article theses. The results revealed the diversity in using employee incentives in banks in Poland. Furthermore, showed that commercial banks use more diverse employee incentives than cooperative ones, female employees in banks are motivated less diversely than males and managerial staff are motivated more diversely than employees in non-managerial positions.
    Keywords: Poland,banks,employee,HRM,motivation,incentives
    Date: 2017–09–29
  2. By: Suzanne Bijkerk (Erasmus School of Economics); Silvia Dominguez-Martinez (University of Amsterdam); Jurjen Kamphorst (Erasmus School of Economics); Otto Swank (Erasmus School of Economics)
    Abstract: Under-representation of women in high level positions is widespread and persistent. We analyze the consequences of labor market quotas for the wages of women in high level positions. The key point of our paper is that quotas cause asymmetric information about why women work in high level positions. Firms know why they have assigned their own female employees to high level positions, but do not know why women at other firms have been assigned to those positions. A winner’s curse, reducing competition for women in high level positions, results. This widens the gender pay gap. We show that ex ante women are better-off without quotas. Next, we investigate how quotas affect incentives for employers to learn the abilities of women to make better job-assignment decisions. Then, under specific conditions women may benefit from quotas.
    Keywords: labor market quota; winners curse; screening
    JEL: D83 J22
  3. By: Piopiunik, Marc (University of Munich); Schwerdt, Guido (University of Konstanz); Simon, Lisa (University of Munich); Woessmann, Ludger (University of 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 Classification: J24, J21, I26
    Date: 2018
  4. By: Lambert, Thomas
    Abstract: The mainstream or neoclassical economics view that labor is rewarded according to its productivity has been extended to managers and management teams as justification for the levels of compensation that they receive. Additionally, the management concept of “span of management” or “span of control” has been used to explain the total number of and per employee number of managers in any organization along with the assumption that the appropriate span of management is where the marginal productivity of the last manager employed should equal his/her marginal cost, or wage. On the other hand, Marxists and institutionalists hold different views of the roles and purposes of managers within organizations and attempt to explain these through either the view of managers exploiting workers on behalf of owners or the view of managers exploiting both workers and owners in order to advance their own agenda. This research note examines managerial compensation and intensity from both traditional/mainstream and alternative views by focusing on measures of managerial salaries, employee productivity, return on owners’ equity, return on assets, and rates of worker exploitation.
    Keywords: big business, bureaucracy, economic systems, management, and productivity
    JEL: B51 D2 D43
    Date: 2018–04
  5. By: Colonnello, Stefano; Koetter, Michael; Wagner, Konstantin
    Abstract: We study if the regulation of bank executive compensation has unintended consequences. Based on novel data on CEO and non-CEO executives in EU banking, we show that capping the variable-to-fixed compensation ratio did not induce executives to abandon the industry. Banks indemnified executives sufficiently for the shock to retain them by raising fixed and lowering variable compensation while complying with the cap. At the same time, banks' risk-adjusted performance deteriorated due to increased idiosyncratic risk. Collateral damage for the financial system as a whole appears modest though, as average co-movement of banks with the market declined under the cap.
    Keywords: banks,bonus cap,executive compensation,executive turnover
    JEL: G21 G32 G34
    Date: 2018
  6. By: Borissov, Kirill; Bosi, Stefano; Ha-Huy, Thai; Modesto, Leonor
    Abstract: We extend the Lucas' 1988 model introducing two classes of agents with heterogeneous skills, discount factors and initial human capital endowments. We consider two regimes according to the planner's political constraints. In the first regime, that we call meritocracy, the planner faces individual constraints. In the second regime the planner faces an aggregate constraint, redistributing. We find that heterogeneity matters, particularly with redistribution. In the meritocracy regime, the optimal solution coincides with the BGP found by Lucas (1988) for the representative agent's case. In contrast, in the redistribution case, the solution for time devoted to capital accumulation is never interior for both agents. Either the less talented agents do not accumulate human capital or the more skilled agents do not work. Moreover, social welfare under the redistribution regime is always higher than under meritocracy and it is optimal to exploit existing differences. Finally, we find that inequality in human capital distribution increases in time and that, in the long run, inequality always promotes growth.
    Keywords: human capital, heterogenous patience and skills, inequality and growth.
    JEL: E24 O4 O41
    Date: 2018–04
  7. By: Dudley Cooke (University of Exeter); Ana P. Fernandes (University of Exeter); Priscila Ferreira (University of Minho, NIMA)
    Abstract: This paper presents novel empirical evidence for the prediction from Becker’s (1957) famous theory, that competition will drive discrimination out of the market. We use a comprehensive firm entry deregulation reform in Portugal as a quasi-natural experiment to study the effect of increased product market competition on gender discrimination. We use employer-employee data for the universe of private sector firms and workers, and exploit the staggered implementation of the reform across municipalities for identification. Increased competition following the deregulation reduces the gender pay gap for medium- and high-skill workers but not for the low-skilled. The gender pay gap is also reduced for workers in managerial positions, except for the CEO. We also find that the share of females in managerial positions increased in affected municipalities. Existing evidence has shown that gender discrimination reduces output; our findings suggest that deregulation can contribute to reduce inefficiencies arising from gender discrimination.
    Keywords: Deregulation, Discrimination, Entry, Gender Pay Gap, Product Market Competition, Wage Structure.
    JEL: J16 J31 J71
    Date: 2018–05
  8. By: Jen-Wen Change (California State University, Fullerton); Simpson Zhang (Office of Financial Research)
    Abstract: Since the 2007-09 financial crisis, researchers have debated whether compensation plans drove excessive risk-taking or financial managers simply underestimated the risks of various investments. Through a principal-agent model with heterogeneous beliefs, we show that principals offer contracts that incentivize safe behavior when competition for managerial talent is low. However, intense competition results in contracts that incentivize risk-taking. We find that factors that increase the intensity of competition include greater search efficiency, larger project scales, and higher debt funding, all of which may be prevalent during a financial bubble.
    Keywords: competition, compensation constracts, overoptimism
    Date: 2018–04–10
  9. By: Robert Dur (Erasmus University Rotterdam, CESifo Munich, IZA); Max van Lent (Leiden University)
    Abstract: It has been claimed that many workers in modern economies think that their job is socially useless, i.e. that it makes no or a negative contribution to society. However, the evidence so far is mainly anecdotal. We use a representative dataset comprising 100,000 workers from 47 countries at four points in time. We find that approximately 8% of workers perceive their job as socially useless, while another 17% are doubtful about the usefulness of their job. There are sizeable differences between countries, sectors, occupations, and age groups, but no trend over time. A vast majority of workers cares about holding a socially useful job and we find that they suffer when they consider their job useless. We also explore possible causes of socially useless jobs, including bad management, strict job protection legislation, harmful activities at work, labor hoarding, and division of labor.
    Keywords: work motivation; job satisfaction; job search; management quality; job protection legislation; sin industries; labor hoarding; division of labor
    JEL: J2 J3 J4 J8 M5

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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