nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2019‒07‒22
nine papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Talking about Performance or Paying for it? Evidence from a Field Experiment By Manthei, Kathrin; Sliwka, Dirk; Vogelsang, Timo
  2. Training, Soft Skills and Productivity: Evidence from a Field Experiment By Prada, Maria; Rucci, Graciana; Urzua, Sergio
  3. What Do Student Jobs on Graduate CVs Signal to Employers? By Van Belle, Eva; Caers, Ralf; Cuypers, Laure; De Couck, Marijke; Neyt, Brecht; Van Borm, Hannah; Baert, Stijn
  5. Rank Incentives and Social Learning: Evidence from a Randomized Controlled Trial By Dobrescu, Isabella; Faravelli, Marco; Megalokonomou, Rigissa; Motta, Alberto
  6. What Do Employee Referral Programs Do? By Friebel, Guido; Heinz, Matthias; Hoffman, Mitchell; Zubanov, Nick
  7. Gender Quotas in the Boardroom: New Evidence from Germany By Alexandra Fedorets; Anna Gibert; Norma Burow
  8. On the Strategic Benefits of Diversity By Martin Kaae Jensen
  9. Gender Wage Gaps and Worker Mobility: Evidence from the Garment Sector in Bangladesh By Andreas Menzel; Christopher Woodruff

  1. By: Manthei, Kathrin (RFH Koeln); Sliwka, Dirk (University of Cologne); Vogelsang, Timo (University of Cologne)
    Abstract: We investigate the causal effect of conversations about performance and performance pay implementing a 2x2 field experiment in a retail chain. In the performance pay treatments, managers receive a bonus for profit increases. In the performance review treatments, managers have regular meetings with their supervisors discussing their activities to increase profits. We find that review conversations raise profits by 7%-8%. However, when additionally receiving performance pay this effect vanishes. Analyzing an extension of Bénabou and Tirole (2006), we rationalize this effect formally and provide empirical evidence that the use of performance pay changes the nature of conversations undermining their value.
    Keywords: performance pay, performance reviews, monitoring, feedback, field experiment, management practices
    JEL: J3 L2 M5 C93
    Date: 2019–06
  2. By: Prada, Maria (University of Maryland); Rucci, Graciana (IADB); Urzua, Sergio (University of Maryland)
    Abstract: This paper examines a training intervention aimed at boosting leadership and communication skills among employees of a large Latin American retailer. The identification exploits an experimental design in the context of a difference-in-difference strategy. Using longitudinal information obtained from the firm and two skills surveys, we document large positive effects of the training on store- and individual- level productivity. The intervention was more effective in boosting leadership than communication skills. Spillovers from trained managers to untrained sales representatives also contribute to the main effects. Our findings confirm the possibility of increasing productivity through training targeting critical soft-skills.
    Keywords: socio-emotional skills, training, productivity, experiments with firms
    JEL: C93 J24 M53 O15
    Date: 2019–06
  3. By: Van Belle, Eva (University of Neuchatel); Caers, Ralf (KU Leuven); Cuypers, Laure (Ghent University); De Couck, Marijke (Free University of Brussels); Neyt, Brecht (Ghent University); Van Borm, Hannah (Ghent University); Baert, Stijn (Ghent University)
    Abstract: Due to the prevalence and important consequences of student work, the topic has seen an increased interest in the literature. However, to date the focus has been solely on measuring the effect of student employment on later labour market outcomes, relying on signalling theory to explain the observed effects. In the current study, we go beyond measuring the effect of student work and we examine for the first time what exactly is being signalled by student employment. We do this by means of a vignette experiment in which we ask 242 human resource professionals to evaluate a set of five fictitious profiles. Whereas all types of student work signal a better work attitude, a larger social network, a greater sense of responsibility, an increased motivation, and more maturity, only student employment in line with a job candidate's field of study is a signal of increased human capital and increased trainability.
    Keywords: student employment, signalling, hiring chances, vignette study
    JEL: C91 I21 J22 J24
    Date: 2019–06
  4. By: Stijn Baert; Dieter Verhaest (-)
    Abstract: We investigated the impact on first hiring outcomes of two main curriculum vitae (CV) characteristics by which graduates with a tertiary education degree distinguish themselves from their peers: degree class and extra-curricular activities. These characteristics were randomly assigned to 2,800 fictitious job applications that were sent to real vacancies in Belgium. Academic performance and extra-curricular engagement both enhanced job interview rates by about 7%. The effect of a higher degree class was driven by female (versus male) candidates and candidates with a master’s (versus a bachelor’s) degree. We did not find evidence for these CV characteristics to be substitutes or to reinforce each other’s effect.
    Keywords: degree class, extra-curricular activities, hiring, field experiment
    JEL: J23 J24 I23 C93
    Date: 2019–07
  5. By: Dobrescu, Isabella (University of New South Wales); Faravelli, Marco (University of Queensland); Megalokonomou, Rigissa (University of Queensland); Motta, Alberto (University of New South Wales)
    Abstract: In a 1-year randomized controlled trial involving thousands of university students, we provide real-time private feedback on relative performance in a semester-long online assignment. Within this setup, our experimental design cleanly identifies the behavioral response to rank incentives (i.e., the incentives stemming from an inherent preference for high rank). We find that rank incentives not only boost performance in the related assignment, but also increase the average grade across all course exams taken over the semester by 0.21 standard deviations. These beneficial effects remain sizeable across all quantiles and extend beyond the time of the intervention. The mechanism behind these findings involves social learning: rank incentives make students engage more in peer interactions, which lead them to perform significantly better across the board. Finally, we explore the virtues of real-time feedback by analyzing a number of alternative variations in the way it is provided.
    Keywords: relative performance feedback, rank incentives, social learning, academic performance, randomized controlled trial
    JEL: J24 J18
    Date: 2019–06
  6. By: Friebel, Guido; Heinz, Matthias; Hoffman, Mitchell; Zubanov, Nick
    Abstract: Employee referral programs (ERPs) are randomly introduced in a grocery chain. Larger bonuses increase referrals and decrease referral quality, though the increase in referrals is modest. Still, ERPs are highly profitable, partly, because referrals stay longer than non-referrals, but, mainly, because non-referrals stay longer in treated stores than in control stores. In a post-RCT firmwide ERP rollout, referral rates remain low for grocery jobs, but are high for non-grocery jobs, which are perceived as more attractive. Our results (1) are consistent with referral-making being driven by money and altruism toward friends; (2) show that ERPs can have substantial benefits beyond generating referrals. The most-supported mechanism for (2) is that workers value being involved in hiring.
    Keywords: altruism; employee referral programs; Hiring; referrals; respect; Turnover
    JEL: D90 J24 J30 J63 M51
    Date: 2019–05
  7. By: Alexandra Fedorets; Anna Gibert; Norma Burow
    Abstract: We examine the introduction of a gender quota law in Germany, mandating a minimum 30% of the underrepresented gender on the supervisory boards of a particular type of firms. We exploit the fact that Germany has a two-tier corporate system consisting of the affected supervisory boards and unaffected management boards within the same firm. We find a positive effect on the female share on supervisory boards of affected firms, but no effect on presidency of the board or its size. We also study whether the increased female representation has had an effect on the financial performance of the firm and conclude that, unlike some previous studies in other countries, there has not been any negative effect on the profitability of the firm, neither at the time when the law was announced nor when it was passed.
    Keywords: Gender quota, Economics of gender, Labor discrimination, Personnel economics, Firm performance
    JEL: J78 J16 M51 L25
    Date: 2019
  8. By: Martin Kaae Jensen (University of Surrey)
    Abstract: This paper studies the relationship between functional diversity and team performance. The main question is whether diversity may entail strategic benefits that enable diverse teams to outperform homogenous teams even if the homogenous teams are more skilled on average, or diversity entails a direct efficiency loss a la Benabou (1996). Both ability diversity and cognitive diversity (Johnson- Laird (1983), Page (2008)) are studied, and the paper also considers the role of Becker and Murphy (1992)-type coordination costs. In all cases, the main message is that effort adjustments set off by greater diversity may significantly change the outcome in comparison with an assessment based on the more familiar direct effects. For example, a diverse team may outperform a homogenous team even if the elasticity of substitution is positive and less capable individuals therefore “drag down” the more capable individuals productivities; and under the same condition, a “superstar” may outperform a cognitively diverse team even though a positive elasticity of substitution implies decreasing returns to talent in the sense of Rosen (1981). The paper discusses the implications of these findings for the general diversity debate, for optimal team selection, and for market salaries. The main insights, as well as the tools developed to reach those insights, are very general and extend to other contexts where diversity plays a role.
    JEL: C72 D40 D80 M10 Z13
    Date: 2019–07
  9. By: Andreas Menzel; Christopher Woodruff
    Abstract: Data from 70 large export-oriented garment manufacturers in Bangladesh show that gender wage gaps are similar to those found in higher-income countries. Among production workers, women’s wages are 8 percent lower. We show that by combining short administrative panels, survey data from a representative sample of workers, and structure, we can estimate how the wage gap evolves over workers’ careers. Gender differences in internal and across-factory promotions contribute roughly equally to the emergence of the gender gap over worker careers. Differences in promotion rates appear to arise mainly from career concerns rather than frictions coming from household responsibilities.
    JEL: J16 J31 O14
    Date: 2019–06

This nep-hrm issue is ©2019 by Patrick Kampkötter. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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