nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2019‒03‒11
seven papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Motivation and incentives in an online labor market By Sebastian Fest; Ola Kvaløy; Petra Nieken; Anja Schöttner
  2. The Impact of Management Practices on Employee Productivity: A Field Experiment with Airline Captains By Greer K. Gosnell; John A. List; Robert D. Metcalfe
  3. Professionals on Corporate Boards: How do they affect the bottom line? By SAKO Mari; KUBO Katsuyuki
  4. Strategically delusional By Alice Soldà; Changxia Ke; Lionel Page; William von Hippel
  5. Deadly combinations: how leadership contexts undermine the activation and enactment of followers’ high core self-evaluations in performance By Soane, Emma; Booth, Jonathan E.; Alfes, Kerstin; Shantz, Amanda; Bailey, Catherine
  6. Truth Telling Under Oath By Nicolas Jacquemet; Stephane Luchini; Julie Rosaz; Jason Shogren
  7. Performance Measurement in Agency Models By Koo Chi, Chang; Jin Choi, Kyoung

  1. By: Sebastian Fest; Ola Kvaløy; Petra Nieken; Anja Schöttner
    Abstract: In this paper we present results from a large scale real effort experiment in an online labor market investigating the effect of performance pay and two common leadership techniques: Positive expectations and specific goals. We find that positive expectations have a significant negative effect on quantity - and no effect on quality - irrespective of how the workers are paid. On average, workers who receive positive expectations before they start to work, have a five percent lower output than those who do not. Goal-setting has no significant effect, neither on quantity nor quality. Performance pay, in contrast, has a strong positive effect on quantity, although we find no difference between high and low piece rates. Finally, we find no evidence of a multitask problem. Piece rates have no negative effects on the quality of work, even if it is fully possible for the workers to be less accurate and thereby substituting quality for higher quantity.
    Keywords: non-monetary motivation, performance pay, field experiment
    JEL: C93 M52 J33
    Date: 2019
  2. By: Greer K. Gosnell; John A. List; Robert D. Metcalfe
    Abstract: Increasing evidence indicates the importance of management in determining firms’ productivity. Yet, causal evidence regarding the effectiveness of management practices is scarce, especially for high-skilled workers in the developed world. In an eight-month field experiment measuring the productivity of captains in the commercial aviation sector, we test four distinct management practices: (i) performance monitoring; (ii) performance feedback; (iii) target setting; and (iv) pro-social incentives. We find that these management practices—particularly performance monitoring and target setting—significantly increase captains’ productivity with respect to the targeted fuel-saving dimensions. We identify positive spillovers of the tested management practices on job satisfaction and carbon dioxide emissions, and captains overwhelmingly express desire for deeper managerial engagement. Both the implementation and the results of the study reveal an uncharted opportunity for management researchers to delve into the black box of firms and rigorously examine the determinants of productivity amongst skilled labor.
    JEL: C93 D01 J3 Q5 R4
    Date: 2019–02
  3. By: SAKO Mari; KUBO Katsuyuki
    Abstract: Licensed professionals, such as accountants and lawyers, play a variety of roles when they sit on corporate boards. This paper sheds light on what role professional-directors play under what circumstances, and its consequences for corporate performance. We develop a two-dimensional framework, enabling us to identify the ‘wise counsel’ role in relation to the professional-capital dimension, and the ‘cop’ and ‘entrepreneur’ roles in relation to the risk-taking dimension. Using a dataset of all publicly quoted companies in Japan during 2004-2015, we demonstrate that the presence of professional-directors increases profitability and corporate value in all sectors, indicative of their ‘wise counsel’ role. We also show that the presence of professional-directors leads to higher stock return volatility in regulated industries, evidence of their role as ‘entrepreneurs’. By contrast, professional-directors lower stock return volatility in less regulated industries, indicative of their role as ‘cops’. Our theory and findings on the contingent effects of professional roles on firm performance have implications for corporate governance. They also shed light on a key question in strategic management, that is, the role of professionals as a specific type of resource in explaining performance heterogeneity.
    Date: 2019–02
  4. By: Alice Soldà (Univ Lyon, Université Lyon 2, GATE UMR 5824, 93 Chemin des Mouilles, F-69130, Ecully, France ; Queensland University of Technology, Brisbane, QLD 4000, Australia); Changxia Ke (Queensland University of Technology, Brisbane, QLD 4000, Australia); Lionel Page (University of Technology Sydney, Ultimo, NSW 2007, Australia); William von Hippel (University of Queensland, Brisbane, QLD 4000, Australia)
    Abstract: We aim to test the hypothesis that overconfidence arises as a strategy to influence others in social interactions. We design an experiment in which participants are incentivised either to form accurate beliefs about their performance at a test, or to convince a group of other participants that they performed well. We also vary participants’ ability to gather information about their performance. Our results provide, the different empirical links of von Hippel and Trivers’ (2011) theory of strategic overconfidence. First, we find that participants are more likely to overestimate their performance when they anticipate that they will try to persuade others. Second, when offered the possibility to gather information about their performance, they bias their information search in a manner conducive to receiving more positive feedback. Third, the increase in confidence generated by this motivated reasoning has a positive effect on their persuasiveness.
    Keywords: Overconfidence, motivated cognition, self-deception, persuasion, information sampling, experiment
    JEL: C91 D03 D83
    Date: 2019
  5. By: Soane, Emma; Booth, Jonathan E.; Alfes, Kerstin; Shantz, Amanda; Bailey, Catherine
    Abstract: Employees with high core self-evaluations (CSE) generally perform well in their jobs. The enactment of CSE in performance occurs within contexts, and leadership is one form of context that influences the activation and expression of CSE. Drawing on theories of CSE and leader–member exchange (LMX), we characterized the leadership context as the interaction between leader CSE and LMX quality. Examination of 173 followers and their 31 leaders in a manufacturing organization showed a positive association between follower CSE and performance when the context comprised high leader CSE and high LMX. Conversely, leadership contexts comprising high leader CSE and low LMX, or low leader CSE and high LMX, resulted in a negative relationship between follower CSE and performance. We also show that low CSE followers have relatively high performance under some circumstances. Thus, we contribute to understanding how some leadership contexts undermine high CSE followers’ performance and promote low CSE followers’ performance
    JEL: R14 J01 J50
    Date: 2018–02–27
  6. By: Nicolas Jacquemet (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics); Stephane Luchini (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - EHESS - École des hautes études en sciences sociales); Julie Rosaz (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); Jason Shogren (Departement of Economics and Finance, University of Wyoming - UW - University of Wyoming)
    Abstract: Oath-taking for senior executives has been promoted as a mean to enhance honesty within and towards organizations. Herein we explore whether people who voluntarily sign a solemn truth-telling oath are more committed to sincere behavior when offered the chance to lie. We design an experiment to test how the oath affects truth-telling in two contexts: a neutral context replicating the typical experiment in the literature, and a "loaded" context in which we remind subjects that "a lie is a lie." We consider four payoff configurations, with differential monetary incentives to lie, implemented as within-subjects treatment variables. The results are reinforced by robustness investigations in which each subject made only one lying decision. Our results show that the oath reduces lying, especially in the loaded environment-falsehoods are reduced by fifty percent. The oath, however, have a weaker effect on lying in the neutral environment. The oath did affect decision times in all instances: the average person takes significantly more time deciding whether to lie under oath.
    Keywords: Lies,Truth-telling oath,Deception,Laboratory Experiment
    Date: 2019–01
  7. By: Koo Chi, Chang (Dept. of Economics, Norwegian School of Economics and Business Administration); Jin Choi, Kyoung (University of Calgary)
    Abstract: This note explores how to evaluate an agent’s performance in standard incentive contracts. We show that the MPS criterion proposed by Kim (1995) becomes a tight condition for one performance measurement system to be more informative than another, as long as the first-order approach can be justified. In the one-signal case obeying the monotone likelihood ratio property, the MPS criterion is equivalent to the way of ordering signals developed by Lehmann (1988), establishing a link to statistical decision theory. Our results demonstrate that depending on the agent’s potential deviations, ideal performance measures can be different.
    Keywords: Agency problems; performance measurement; informativeness criterion; signal orderings
    JEL: D86
    Date: 2019–02–25

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