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on Human Capital and Human Resource Management |
| By: | Lollo, Niklas; O’Rourke, Dara |
| Abstract: | Factory worker pay in global value chains remains a contentious issue. In this paper, we evaluate a two-year field experiment in an apparel factory to analyze altered compensation systems designed to increase worker pay while supporting factory goals around productivity and profitability. Using a quasi-experimental design, with unique data on wages, hours, productivity, quality, and worker engagement, we estimate the impact of three altered compensation systems on pay, productivity, and factory profits. The compensation systems can be described as: 1) an improved productivity-based scheme, 2) a scheme that brings quality and waste reduction into the calculation; and 3) a “target wage†scheme. Overall, the treatments raised wages by 4.2-11.6% and increased productivity by 7-12%-points. Management reported significant financial benefits from the experiment, including increased profits for five of six lines, and avoided costs and productivity losses due to decreased turnover. The factory workers, through focus-group interviews before, during, and after the intervention, reported improved relations with team members and managers. This study demonstrates altered factory compensation can support better factory performance and a better paid workforce, indicating a path towards advanced supply chains with improved wages. |
| Keywords: | Social and Behavioral Sciences, LABOR MARKETS, LOW-WAGE WORK |
| Date: | 2018–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:indrel:qt31c4j2hz&r=all |
| By: | Bennett, Benjamin (Ohio State University (OSU) - Department of Finance); Garvey, Gerald (Blackrock); Milbourn, Todd (Washington University in Saint Louis - Olin Business School); Wang, Zexi (University of Bern) |
| Abstract: | We study the effect of stock price informativeness (SPI) on executive compensation complexity. Using textual analysis of SEC proxy statements to construct compensation complexity measures for US public firms, we find strong evidence that higher SPI reduces pay complexity. We then use mutual fund redemption as an exogenous decrease in SPI to address endogeneity concerns. When fund flow pressure is high, pay includes more performance metrics, a greater number of vesting periods, and options with longer vesting periods. When stock prices convey information more effectively, executive pay is simpler. |
| JEL: | G30 J33 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:ohidic:2019-7&r=all |
| By: | Kenny S, Victoria |
| Abstract: | Employee’s performance depends on various factors but the most important factor is training, which enhances the capabilities of employees |
| Keywords: | Productivity, Organizational Performance and Human Capital |
| JEL: | D0 |
| Date: | 2019–04–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:93294&r=all |
| By: | Mohamed Belhaj (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Frédéric Deroïan (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, AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | We consider a network game with local complementarities. A policymaker, aiming at minimizing or maximizing aggregate effort, contracts with a single agent on the network to trade effort change against transfer. The policymaker has to find the best agent and the optimal contract to offer. Our study shows that for all utilities with linear best-responses, it only takes two statistics about the position of each agent on the network to identify the key player: the Bonacich centrality and the self-loop centrality. We also characterize key players under linear quadratic utilities for various contractual arrangements. |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01981885&r=all |
| By: | Bohnet, Iris (Harvard Kennedy School); Saidi, Farzad (Stockholm School of Economics and CEPR) |
| Abstract: | In labor markets, some individuals have, or believe to have, less data on the determinants of success than others, e.g., due to differential access to technology or role models. We provide experimental evidence on when and how informational differences translate into performance differences. In a laboratory tournament setting, we varied the degree to which individuals were informed about the effort-reward relationship, and whether their competitor received the same or a different amount of information. We find performance is adversely affected only by worse relative, but not absolute, informedness. This suggests that inequity aversion applies not only to outcomes but also to information that helps achieve them, and stresses the importance of inequality in initial information conditions for performance-dependent outcomes. |
| JEL: | D81 D82 M50 |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp19-008&r=all |
| By: | Eliason, Marcus; Hensvik, Lena; Kramarz, Francis; Nordstrom Skans, Oskar |
| Abstract: | The literature on social networks often presumes that job search through (strong) social ties leads to increased inequality by providing privileged individuals with access to more attractive labor market opportunities. We assess this presumption in the context of sorting between AKM-style person and establishment fixed effects. Our rich Swedish register data allow us to measure connections between agents - workers to workers and workers to firms - through parents, children, siblings, spouses, former co-workers and classmates from high school/college, and current neighbors. In clear contrast with the above presumption, there is less sorting inequality among the workers hired through social networks. This outcome results from opposing factors. On the one hand, reinforcing positive sorting, high wage job seekers are shown to have social connections to high-wage workers, and therefore to high-wage firms (because of sorting of workers over firms). Furthermore, connections have a causal impact on the allocation of workers across workplaces â?? employers are much more likely to hire displaced workers to whom they are connected through their employees, in particular if their social ties are strong. On the other hand, attenuating positive sorting, the (causal) impact is much stronger for low-wage firms than it is for high-wage firms, irrespective of the type of worker involved, even conditional on worker fixed effects. The lower degree of sorting among connected hires thus arises because low-wage firms use their (relatively few) connections to high-wage workers to hire workers of a type that they are unable to attract through market channels. |
| Keywords: | Hiring; Job Displacement; job search; networks |
| JEL: | J23 J30 J60 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13672&r=all |
| By: | Becker, Sascha O. (University of Warwick); Fernandes, Ana (Bern University of Applied Sciences); Weichselbaumer, Doris (Johannes Kepler University Linz) |
| Abstract: | Due to conventional gender norms, women are more likely to be in charge of childcare than men. From an employer’s perspective, in their fertile age they are also at “risk” of pregnancy. Both factors potentially affect hiring practices of firms. We conduct a largescale correspondence test in Germany, Switzerland, and Austria, sending out approx. 9,000 job applications, varying job candidate’s personal characteristics such as marital status and age of children. We find evidence that, for part-time jobs, married women with older kids, who likely finished their childbearing cycle and have more projectable childcare chores than women with very young kids, are at a significant advantage vis-àvis other groups of women. At the same time, married, but childless applicants, who have a higher likelihood to become pregnant, are at a disadvantage compared to single, but childless applicants to part-time jobs. Such effects are not present for full-time jobs, presumably, because by applying to these in contrast to part-time jobs, women signal that they have arranged for external childcare. |
| Keywords: | Fertility; Discrimination; Experimental economics. JEL Classification: C93; J16; J71. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:412&r=all |
| By: | Dariel, Aurelie (new york university abu dhabi); Riedl, Arno (General Economics 1 (Micro)); Siegenthaler, Simon (university of texas at dallas) |
| Abstract: | Information asymmetries can prevent markets from operating efficiently. An important example is the labor market, where employers face uncertainty about the productivity of job candidates. We examine theoretically and with laboratory experiments three key questions related to hiring via referrals when employees have private information about their productivity. First, do firms use employee referrals when there are social ties between a current employee and a future employee? Second, does the existence of social ties and hiring through employee referrals indeed alleviate adverse selection relative to when social ties do not exist? Third, does the existence of social ties have spill-over effects on wages and hiring in competitive labor markets? The answers to all three questions are affirmative. However, despite the identified positive effect of employment referrals, hiring decisions fall short of the (second-best) efficient outcome. We identify risk aversion as a potential reason for this. |
| Keywords: | adverse selection, labor market, employee referrals, social networks |
| JEL: | C92 D82 D85 E20 |
| Date: | 2019–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umagsb:2019009&r=all |
| By: | Scherer, F.M. (Harvard Kennedy School) |
| Abstract: | This article analyzes the trajectory and causes of the explosion of American corporate CEOs' compensation relative to that of average workers between 1958 and 2017. The historical data are presented and analyzed in more detail for 2016 and 2017. Important biases in alternative data sets are explored. Alternative hypotheses for the dramatic changes over time are proposed but not resolved. Among other things, the paper investigates the role of tax and other government policy changes and regulation-induced innovations in the organization of executive pay determination. |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp19-002&r=all |