nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2018‒09‒24
seven papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Middle managers, personnel turnover and performance: A long-term field experiment in a retail chain By Friebel, Guido; Heinz, Matthias; Zubanov, Nick
  2. Only time will tell: A theory of deferred compensation By Hoffmann, Florian; Inderst, Roman; Opp, Marcus M.
  3. Social capital and conservation under collective and individual incentive schemes: a framed field experiment in Indonesia By Wollni, M.; Lanza, G.; Ibanez, M.
  4. Moral Imaginaries of Performance Measurement Systems in the Pharmaceutical Industry: Struggles and Negotiations to Define What is an Agent and What is Not By Robson, Keith; Dambrin, Claire; Bottausci, Chiara
  5. The Impact of Chief Diversity Officers on Diverse Faculty Hiring By Steven W. Bradley; James R. Garven; Wilson W. Law; James E. West
  6. Target setting and Allocative Inefficiency in Lending: Evidence from Two Chinese Banks By Yiming Cao; Raymond Fisman; Hui Lin; Yongxiang Wang
  7. Employment Adjustments Following Rises and Reductions in Minimum Wages: New Insights from a Survey Experiment By Bossler, Mario; Oberfichtner, Michael; Schnabel, Claus

  1. By: Friebel, Guido; Heinz, Matthias; Zubanov, Nick
    Abstract: In a field experiment, a large retail chain's CEO asked managers of treated stores "to do what they can" to reduce personnel turnover. Turnover decreases by a quarter for nine months; a reminder treatment triggers a similar decrease for a shorter period. Treated managers report shifting their time toward HR; their employees report more managerial attention and support. Store sales are unaffected, indicating that the possible performance increases related to managers spending more time on HR are neutralized by the effects of managers spending less time on customers and goods. The discernible efficiency gains occur at the firm, rather than at the store level.
    Keywords: communication; hierarchy; HR; insider econometrics; Managers; organizations; personnel turnover; randomized controlled trial (RCT)
    JEL: L2 M1 M12 M5
    Date: 2018–08
  2. By: Hoffmann, Florian; Inderst, Roman; Opp, Marcus M.
    Abstract: This paper provides a complete characterization of optimal contracts in principal-agent settings where the agent's action has persistent effects. We model general information environments via the stochastic process of the likelihood-ratio. The martingale property of this performance metric captures the information benefit of deferral. Costs of deferral may result from both the agent's relative impatience as well as her consumption smoothing needs. If the relatively impatient agent is risk neutral, optimal contracts take a simple form in that they only reward maximal performance for at most two payout dates. If the agent is additionally risk-averse, optimal contracts stipulate rewards for a larger selection of dates and performance states: The performance hurdle to obtain the same level of compensation is increasing over time whereas the pay-performance sensitivity is declining.
    Keywords: compensation design,duration of pay,moral hazard,persistence,principal-agent models,informativeness principle
    JEL: D86
    Date: 2018
  3. By: Wollni, M.; Lanza, G.; Ibanez, M.
    Abstract: In this study, we explore the effects of payments for environmental services on land use decisions among farmers living in Jambi province in Indonesia. Using a framed field experiment we compare land use decisions in a baseline with no payment with two alternative payments for environmental services (PES): an individual incentive scheme, where each participant receives a flat rate payment for each experimental land unit conserved, and a collective incentive scheme that offers individual payments only if an aggregate pre-determined conservation threshold is passed by the group. We find that individual and collective PES are equally effective on the average to increase environmentally friendly behavior associated with the cultivation of rubber agroforestry. Yet we find that whereas individual incentives work equally well for small and large farmers, collective incentives only work for large farmers. In addition, collective incentives generate an increase in conservation even at low payment levels whereas individual incentives only work when payments are high. Participants with a larger social network cultivating oil palm invest a lower share of their endowment in conservation. These findings highlight how land heterogeneity and social capital influence the success of a PES scheme.
    Keywords: Agricultural and Food Policy, International Development
    Date: 2018–07
  4. By: Robson, Keith (HEC Paris); Dambrin, Claire (ESCP Europe - Management Control Department); Bottausci, Chiara (HEC Paris)
    Abstract: This study explores how morality is constituted into accounting objects and how accounting becomes a moral mediator. We retrace the moral practices that subtend the field-level construction of a Principal-Agent incentive algorithm in a Big Pharma company, with particular focus on the inscribing work through which different communities of knowledge, internal and external to the organization, try to realize particular moral principles for the performance measurement system in the making. The study draws upon Science and Technology Studies (Latour, 1989; Jasanoff, 2015) to explore performance measurement systems as existing in Moral Imaginaries, ethical visions that positions accounting devices, and their material features and technical functionalities, as embedding and enacting ‘moral’ and ‘just’ viewpoints. We show how performance measurement systems emerge as moral calculating devices that are shaped by, and struggle with, the contrasting moralities of heterogeneous designers, but also act as moral mediators that reshape human actors’ moral imaginaries as their algorithmic constructions and data outputs perform. In so doing, we contribute to Science and Technology Studies by highlighting how the constitution of who / what is an “Agent”, and its actantiality, is embedded upon movements in which morality circulates, is claimed by actors and attributed to others, and finally objectified in material technologies.
    Keywords: morality; accounting; imaginaries
    JEL: M41
    Date: 2018–08–01
  5. By: Steven W. Bradley; James R. Garven; Wilson W. Law; James E. West
    Abstract: As the American college student population has become more diverse, the goal of hiring a more diverse faculty has received increased attention in higher education. A signal of institutional commitment to faculty diversity often includes the hiring of an executive level chief diversity officer (CDO). To examine the effects of a CDO in a broad panel data context, we combine unique data on the initial hiring of a CDO with publicly available faculty and administrator hiring data by race and ethnicity from 2001 to 2016 for four-year or higher U.S. universities categorized as Carnegie R1, R2, or M1 institutions with student populations of 4,000 or more. We are unable to find significant statistical evidence that preexisting growth in diversity for underrepresented racial/ethnic minority groups is affected by the hiring of an executive level diversity officer for new tenure and non-tenure track hires, faculty hired with tenure, or for university administrator hires.
    JEL: I23 I28 J78
    Date: 2018–08
  6. By: Yiming Cao; Raymond Fisman; Hui Lin; Yongxiang Wang
    Abstract: We study the consequences of month-end lending incentives for Chinese bank managers. Using data from two banks, one state-owned and the other partially privatized, we show a clear increase in lending in the final days of each month, a result of both more loan issuance and higher value per loan. We estimate that daily end-of-month lending is 95 percent higher in the last 5 days of each month as a result of loan targets, with only a small amount plausibly attributable to shifting loans forward from the following month. End-of-month loans are 2.1 percentage points (more than 16 percent) more likely to be classified as bad in the years following issuance; a back-of-the-envelope calculation suggests that the incremental loans made in order to hit targets are 26 percent more likely to eventually turn bad. Our work highlights the distortionary effects of target-setting on capital allocation, in a context in which such concerns have risen to particular prominence in recent years.
    JEL: G21 M52
    Date: 2018–08
  7. By: Bossler, Mario (Institute for Employment Research (IAB), Nuremberg); Oberfichtner, Michael (Institute for Employment Research (IAB), Nuremberg); Schnabel, Claus (University of Erlangen-Nuremberg)
    Abstract: The effects of large minimum wage increases, like those planned in the UK and in some US states, are still unknown. We conduct a survey experiment that randomly assigns increases or decreases in minimum wages to about 6,000 establishments in Germany and asks the personnel managers about their expectations concerning employment adjustments. We find that employment reacts asymmetrically to positive and negative changes in minimum wages. The larger the increase in the minimum wage is, the larger the expected reduction in employment. Employment adjustments are more pronounced in those industries and plants which are more strongly affected by the current minimum wage and in those plants that have neither collective agreements nor a works council. In contrast, employment is not found to increase if the minimum wage is reduced by about 10 percent. This mainly reflects that plants with works councils and collective agreements would not cut wages.
    Keywords: minimum wage, wage cuts, establishment survey, Germany
    JEL: J31 J23 D22
    Date: 2018–08

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