nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2019‒02‒11
five papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Non-linear Incentives and Worker Productivity and Earnings: Evidence from a Quasi-experiment By Richard B. Freeman; Wei Huang; Teng Li
  2. HPWS in the Public Sector: Are There Mutual Gains? By Michael White; Alex Bryson
  3. Rac(g)e Against the Machine? Social Incentives When Humans Meet Robots By Brice Corgnet; Roberto Hernán-Gonzalez; Ricardo Mateo
  4. Learning about One's Self By Yves Le Yaouanq; Peter Schwardmann
  5. Which firms employ older workers? By Andrén, Daniela; Mudenda, Lackson Daniel; Pettersson, Nicklas

  1. By: Richard B. Freeman; Wei Huang; Teng Li
    Abstract: Firms often use non-linear incentive systems to motivate workers to achieve specified goals, such as paying bonuses to reach targets in sales, production, or cost reduction. Using administrative data from a major Chinese insurance firm that raised its sales targets and rewards for insurance agents greatly in 2015, we find that increased incentives induced agents to increase sales of the increasingly incentivized life insurance products, bunched around the new targets, albeit in part with some low quality sales that led to canceled contracts, while reducing sales of products out-side the new incentive system. The greater non-linear incentives raised agent incomes and low-ered turnover and substantially increased firm revenues net of the increase in payments to agents. The stock market reacted to the new system with a jump in the firms’ share price relative to its main competitor by 15-20% in the days surrounding introduction of the new system.
    JEL: J00 J22 J3 M5 M52
    Date: 2019–01
  2. By: Michael White (University of Westminster); Alex Bryson (University College London, National Institute of Social and Economic Research and Institute for the Study of Labor)
    Abstract: Few studies investigate the links between high-performance work systems (HPWS) on public sector organizational performance and worker job attitudes. We fill this gap with analyses of these links using linked employer-employee surveys of workplaces in Britain in 2004 and 2011. We find robust evidence of positive associations between the use of HPWS and organizational performance in the public sector but no associations with worker attitudes. The implication is that, in contrast to similar work on the private sector in the United States (Appelbaum et al., 2000) HPWS is not delivering mutual gains for employers and employees in the British public sector.
    Keywords: HRM; HPWS; workplace performance; job satisfaction; organizational commitment; trust
    JEL: J28 L23 M50 M54
    Date: 2018–12–01
  3. By: Brice Corgnet (emlyon business school, GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique); Roberto Hernán-Gonzalez (UBFC - Université Bourgogne Franche-Comté [COMUE]); Ricardo Mateo (UNAV - Universidad de Navarra [Pamplona])
    Abstract: Because work is most often performed in a social context, social incentives are key to understand incentive setting in firms. We assess the strength of social incentives, which critically depend on the extent of social preferences and social pressure at work, by assessing the difference in human performance when people complete a sequential task with either other humans or robots. We find evidence that, despite maintaining monetary incentives intact, humans who work with robots underperform those who work with other humans, especially under team pay. The lack of altruism toward robots and the lack of social pressure exerted by robots are key to explain this negative effect under team pay. Under piece rate, the lack of envy toward robots plays a crucial role. Regardless of the payment scheme, our findings show that social incentives are powerful. Accounting for the weakening of social incentives when assessing the cost-efficiency of replacing humans with robots is thus critical.
    Keywords: Incentives,social pressure,social preferences,personnel economics,organizational behavior,automation
    Date: 2019–01–25
  4. By: Yves Le Yaouanq; Peter Schwardmann
    Abstract: How can naiveté about present bias persist despite experience? To answer this question, our experiment investigates participants’ ability to learn from their own behavior. Participants decide how much to work on a real effort task on two predetermined dates. In the week preceding each work date, they state their commitment preferences and predictions of future effort. While we find that participants are present biased and initially naive about their bias, our methodology enables us to establish that they are Bayesian in how they learn from their experience at the first work date. A treatment in which we vary the nature of the task at the second date further shows that learning is unencumbered by a change in environment. Our results suggest that persistent naiveté cannot be explained by a fundamental inferential bias. At the same time, we find that participants initially underestimate the information that their experience will provide - a bias that may lead to underinvestment in experimentation and a failure to activate self-regulation mechanisms.
    Keywords: naiveté, present bias, learning
    JEL: D83
    Date: 2019
  5. By: Andrén, Daniela (Örebro University School of Business); Mudenda, Lackson Daniel (Örebro University School of Business); Pettersson, Nicklas (Örebro University School of Business)
    Abstract: There is an increasing emphasizes on the importance of allowing people as they grow older to continue to work according to their work capacity and preferences. This paper builds on earlier literature that shows that firms employ older workers, but they tend not to hire them, and provides an explorative analysis of the establishments that employ older workers. A special focus is on how sensitive are the findings when the definition of older workers become more restrictive. Using employer-employee data from Swedish administrative registers, we found that the difference in establishments’ employment is large enough to explain some of the observed difference across definitions. The retirement age in the guaranteed pension scheme, i.e., 65 years, seems to be one the institutional settings that affect both the employees and employers’ decision for work after 65, but also the establishment’s size, age and ownership.
    Keywords: active aging; older workers; establishments; firms
    JEL: J21 J22 J23 J24 J26
    Date: 2019–01–29

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