nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2019‒04‒08
seven papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. The Pied Piper: Prizes, Incentives, and Motivation Crowding-in By Luigino Bruni; Vittorio Pelligra; Tommaso Reggiani; Matteo Rizzolli
  2. Personality Traits and Performance in Online Labour Markets By Mourelatos, Evangelos; Giannakopoulos, Nicholas; Tzagarakis, Manolis
  3. Is there a wage cost for employees in family-friendly workplaces? The effect of different employer policies By Ariane Pailhé; Anne Solaz
  4. Fraudulent Financial Reporting and the Consequences for Employees By Jung Ho Choi; Brandon Gipper
  5. Effects of Timing and Reference Frame of Feedback By Fischer, Mira; Wagner, Valentin
  6. Contract law and Contract theory. A survey and some considerations By Daniel Danau
  7. Paying for market liquidity: Competition and incentives By Bellia, Mario; Pelizzon, Loriana; Subrahmanyam, Marti G.; Uno, Jun; Yuferova, Darya

  1. By: Luigino Bruni (LUMSA University); Vittorio Pelligra (University of Cagliari); Tommaso Reggiani (Masaryk University); Matteo Rizzolli (LUMSA University)
    Abstract: In mainstream business and economics, prizes such as the Presidential Medal of Freedom are understood as special types of incentives, with the peculiar features of being awarded in public, and of having largely symbolic value. Informed by both historical considerations and philosophical instances, our study defines fundamental theoretical differences between incentives and prizes. The conceptual factors highlighted by our analytical framework are then tested through a laboratory experiment. The experimental exercise aims to analyze how prizes and incentives impact actual individuals’ behavior differently. Our results show that both incentives (monetary and contingent) and prizes (non-monetary and discretional rewards) boost motivation to perform if awarded publicly, but only prizes crowd-in motivation promoting virtuous attitude.
    Keywords: incentives, prizes, awards, crowding-in, meaning, intrinsic motivation
    JEL: B1 D03 J33
    Date: 2019–03–26
  2. By: Mourelatos, Evangelos; Giannakopoulos, Nicholas; Tzagarakis, Manolis
    Abstract: In this paper we investigate the impact of non-cognitive skills on the quality of task-specific outcomes by conducting a quasi-experiment on a well-known online crowdsourcing platform. We show that a worker’s performance varies with personality traits, gender, human capital, crowdsourcing experience and work effort. Regarding the effects of non-cognitive skills, we find that workers’ performance in online microtasks is positively related to extraversion and agreeableness. The positive impact of extroverts is also revealed when performance is adjusted for task completion time. These findings provide implications regarding the integration of selection mechanisms in online labour matching platforms aiming in uncovering microworkers soft skills to improve performance and consequently the allocation of resources in online microtasks.
    Keywords: Crowdsourcing,online labour,quality of work,cognitive abilities,personality traits,workers
    JEL: O33 J40 J24
    Date: 2019
  3. By: Ariane Pailhé (INED - Institut national d'études démographiques); Anne Solaz (INED - Institut national d'études démographiques)
    Abstract: This article assesses the wage impact of different family‐friendly employer policies: in‐kind or in‐cash child‐related benefits and flexible work schedule arrangements. We use French matched employee–employer data with a rich set of indicators of family‐friendly benefits, and we pay attention to the possible endogeneity of worker–employer matching. Our results show that the provision of in‐cash or in‐kind benefits is associated with higher wages for women, while flexible work schedules have no significant effect on wages. Our results lead us to reject the hypothesis of compensating wage differentials: women do not appear to face a trade‐off between wages and a better work–life balance. Our findings are more in line with the enhancing productivity theory: in‐kind benefits reduce the time devoted to household activities and alleviate conflict between professional life and family life, thereby improving women's work effort and productivity. This is not the case for flexible work arrangements, which may be perceived as negatively related to workers' commitment to their job.
    Keywords: France,family pay-gap,women's employment,family-friendly employment policies,flexible work schedules,wages
    Date: 2019
  4. By: Jung Ho Choi; Brandon Gipper
    Abstract: We examine employment effects, such as wages and employee turnover, before, during, and after periods of fraudulent financial reporting. To analyze these effects, we combine U.S. Census data with SEC enforcement actions against firms with serious misreporting (“fraud”). We find compared to a matched sample that fraud firms’ employee wages decline by 9% and the separation rate is higher by 12% during and after fraud periods while employment growth at fraud firms is positive during fraud periods and negative afterward. We discuss several reasons that plausibly drive these findings. (i) Frauds cause informational opacity, misleading employees to still join or continue to work at the firm. (ii) During fraud, managers overinvest in labor changing employee mix, and after fraud the overemployment is unwound causing effects from displacement. (iii) Fraud is misconduct; association with misconduct can affect workers in the labor market. We explore the heterogeneous effects of fraudulent financial reporting, including thin and thick labor markets, bankruptcy and non-bankruptcy firms, worker movements, pre-fraud wage levels, and period of hire. Negative wage effects are prevalent across these sample cuts, indicating that fraudulent financial reporting appears to create meaningful and negative consequences for employees possibly through channels such as labor market disruptions, punishment, and stigma.
    Keywords: Wages, Employment Growth, Accounting Fraud, Information Asymmetry, Stigma
    JEL: D83 J23 J31 M48 M51
    Date: 2019–03
  5. By: Fischer, Mira (WZB Berlin); Wagner, Valentin (University of Mainz)
    Abstract: Information about past performance has been found to sometimes improve and sometimes worsen subsequent performance. Two factors may help to explain this puzzle: which aspect of one\'s past performance the information refers to and when it is revealed. In a field experiment in secondary schools, students received information about their absolute rank in the last math exam (level feedback), their change in ranks between the second-last and the last math exam (change feedback), or no feedback. Feedback was given either 1-3 days (early) or immediately (late) before the final math exam of the semester. Both level feedback and change feedback significantly improve students\' grades in the final exam when given early and tend to worsen them when given late. The largest effects are found for negative change feedback and are concentrated on male students, who adjust their ability beliefs downwards in response to feedback.
    Keywords: timing of feedback; type of feedback; beliefs; education; field experiment;
    JEL: D83 D91 I21
    Date: 2019–03–26
  6. By: Daniel Danau (Normandie Univ, UNICAEN, CNRS, CREM, F-14000 Caen, France)
    Abstract: In this study we parallel Contract theory and Contract law and over a few considerations about the link between the two literatures. First, we highlight that studies in Contract theory can be classi ed in analyses of principal agent relation-ships and analyses of speci c investment problems, and that Contract law mainly focuses on the latter, in general. This leaves aside the analysis of the potential role of the law, for instance, in containing the contractual costs of asymmetric information. Second, we try and clarify under what legal rules the parties fully commit with the contract, or they do not, taking into account that the notions of full and limited commitment are very common in Contract theory whereas they are not in Contract law. This further allows us to provide a uni ed presentation of the literature, based on the features of the contractual environment: complete versus incomplete contracting, full versus limited commitment. Third, we point out that, unlike studies in Contract law, studies in Contract theory devote little attention to the litigation process. For this reason, there is no uni ed analysis of optimal contracts accounting for the transaction costs that appear in the various stages of a contractual relationship.
    Keywords: Contract law, Contract theory, Law and economics, Incomplete contracts
    JEL: D82 K12
    Date: 2019–03
  7. By: Bellia, Mario; Pelizzon, Loriana; Subrahmanyam, Marti G.; Uno, Jun; Yuferova, Darya
    Abstract: Do competition and incentives offered to designated market makers (DMMs) improve market liquidity? Using data from NYSE Euronext Paris, we show that an exogenous increase in competition among DMMs leads to a significant decrease in quoted and effective spreads, mainly through a reduction in adverse selection costs. In contrast, changes in incentives, through small changes in rebates and requirements for DMMs, do not have any tangible effect on market liquidity. Our results are of relevance for designing optimal contracts between exchanges and DMMs and for regulatory market oversight.
    Keywords: High-Frequency Trading (HFT),Designated Market Makers (DMMs) Market Making,Adverse Selection,Liquidity Provision
    JEL: G12 G14
    Date: 2019

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