nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2019‒09‒16
nine papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Toward an Understanding of Corporate Social Responsibility: Theory and Field Experimental Evidence By Daniel Hedblom; Brent R. Hickman; John A. List
  2. Adding Tournament to Tournament: Combining Between-Team and Within-Team Incentives By Michael Majerczyk; Roman Sheremeta; Yu Tian
  3. User satisfaction and workspace effectiveness: conditional effects of stress and workplace attachment By Ingrid Nappi-Choulet; Gisele de Campos Ribeiro; Nicolas Cochard
  4. Biased beliefs, costly external finance, and firm behavior : A Unified theory By Li, Delong; Lu, Lei; Mu, Congming; Yang, Jinqiang
  5. CEO Compensation Trends in the Republic of Serbia in the Context of EU Integration By Ivana Marinovic Matovic
  7. Accounting for Federal Retirement and Veterans' Benefits: Cash and Accrual Measures By Congressional Budget Office
  8. Under Pressure? Performance Evaluation of Police Officers as an Incentive to Cheat: Evidence from Drug Crimes in Russia By Ekaterina Travova
  9. Corporate governance reporting: Compliance with upper limits for severance payments to members of executive boards in Germany By Dilger, Alexander; Schottmüller-Einwag, Ute

  1. By: Daniel Hedblom; Brent R. Hickman; John A. List
    Abstract: We develop theory and a tightly-linked field experiment to explore the supply side implications of corporate social responsibility (CSR). Our natural field experiment, in which we created our own firm and hired actual workers, generates a rich data set on worker behavior and responses to both pecuniary and CSR incentives. Making use of a novel identification framework, we use these data to estimate a structural principal-agent model. This approach permits us to compare and contrast treatment and selection effects of both CSR and financial incentives. Using data from more than 1100 job seekers, we find strong evidence that when a firm advertises work as socially-oriented, it attracts employees who are more productive, produce higher quality work, and have more highly valued leisure time. In terms of enhancing the labor pool, for example, CSR increases the number of applicants by 25 percent, an impact comparable to the effect of a 36 percent increase in wages. We also find an economically important complementarity between CSR and wage offers, highlighting the import of using both to hire and motivate workers. Beyond lending insights into the supply side of CSR, our research design serves as a framework for causal inference on other forms of non-pecuniary incentives and amenities in the workplace, or any other domain more generally.
    JEL: C14 C93 J3 J33 J44 L21 M52
    Date: 2019–09
  2. By: Michael Majerczyk (J. Mack Robinson College of Business, Georgia State University); Roman Sheremeta (Weatherhead School of Management, Case Western Reserve University and Economic Science Institute, Chapman University); Yu Tian (Kenneth G. Dixon School of Accounting, University of Central Florida)
    Abstract: We examine theoretically and experimentally how combining between-team and within-team incentives affects behavior in team tournaments. Theory predicts that free-riding will occur when there are only between-team incentives, and offering within-team incentives may solve this problem. However, if individuals collude, then within-team incentives may not be as effective at reducing free-riding. Consistent with the theoretical predictions, the results of our experiment indicate that although between-team incentives are effective at increasing individual effort, there is substantial free-riding and declining effort over time. Importantly, a combination of between-team and within-team incentives is effective not only at generating effort but also at sustaining effort over time, mitigating free-riding problem, increasing cooperation and decreasing collusion within teams.
    Keywords: Individual incentive; Team incentive; Tournament; Free-riding; Collusion
    JEL: C70 D72 H41
    Date: 2019
  3. By: Ingrid Nappi-Choulet; Gisele de Campos Ribeiro; Nicolas Cochard
    Abstract: In recent years, companies like IBM and Yahoo have ended the practice of encouraging employees’ remote-work and reverted to getting workers back to the office. The reasoning behind this decision has been prompted by the findings of several studies showing that employees’ face-to-face interactions are positively associated with creativity and performance. Nowadays, offices are not viewed anymore as a mere source of expenses, but as places where people come together to socialize, share knowledge, mentor others and work as teams. Therefore, one of the central issues in workplace management is the opportunity that workspaces offer for accumulating knowledge or intellectual capital. In this sense, office spatial arrangements that favour the development of such potentialities become a full company resource that supports the development of collective dynamics and lends meaning to a common project, a company business. Workspace research must consider employees’ experiences, collaboration and the need for sensory and emotional engagement in the workplace (Gruber et al. 2015). Research on users’ satisfaction with the office environment has generated extensive knowledge of workers’ preferences relative to ambient and environmental conditions. However, limited research exists on how the workspace supports workers to perform their tasks (Visher, 2008; De Been & Beijer, 2014; Rolfö et al. 2018). To our knowledge, a limited number of studies focused on how employees’ satisfaction with their workspace environment is related to workspace effectiveness. The workplace is a territory around which the whole organization social life is shaped (Fisher, 1997). Office-settings environments are supposed to generate positive dynamics such as employees’ emotional connections with their workspace, collaboration, creativity, and performance. However, these dynamics engender negative outcomes unintentionally, one of which is stress. The aim of our study was to evaluate the relationship between employees' workspace satisfaction and workspace effectiveness through workspace attachment and stress. A web-based survey of 66 office employees working in different workspace settings was performed. Contrary to expectations, the results showed that satisfaction with workspace environment is not related to employees’ perception of workspace effectiveness; instead, this relationship is moderated by stress levels, and, mediated to workspace attachment. Purpose: To study the relationship between workspace satisfaction and workspace effectiveness.Design/methodology/approach: A web-based survey of 66 white-collar functions employees working in a company on two sites and in different types of offices.Findings: Controlling by office type, gender, age, the seniority in the company, and the time in the function, the results showed that the relationship between workspace satisfaction and workspace effectiveness is moderated by stress, and mediated by workspace attachment. Practical implications: Our study shows that employees’ positive evaluation of the workspace environment, while significant, is not a guarantee of workspace effectiveness. Instead, the perception of the workspace support for performing daily work is conditional on stress. When stress levels are low, the workspace contributes positively to performing daily work. When stress levels are high, the workspace contributes negatively to performing daily work. Workplace attachment mediates the relationship between workspace satisfaction and workspace effectiveness positively. Employees who are relatively more satisfied with their workspace tend to feel more attached to their offices, which in turn translates into a greater perception of workspace effectiveness.Originality/value: This research helps to improve the knowledge of how the workspace supports workers to perform their tasks. Disciplines presented in the paper: Corporate Real Estate Management, Workplace Management, Human Resources, Environmental Psychology.
    Keywords: office environment; Stress; workplace attachment; workspace; workspace effectiveness
    JEL: R3
    Date: 2019–01–01
  4. By: Li, Delong; Lu, Lei; Mu, Congming; Yang, Jinqiang
    Abstract: Overconfidence and overextrapolation are two behavioral biases that are pervasive in human thinking. A long line of research documents that such biases influence business decisions by distorting managers' expected productivity. We propose a new mechanism in which the biases change firms' precautionary motives when external financing is costly, finding that the influences of biases on investment, payouts, and refinancing are stronger for financially weaker firms. Moreover, biased and rational firms display di erential responses to economic booms and busts holding financial positions constant. Our work illustrates that managerial traits, when interacting with imperfect capital markets, drive firm dynamics in business cycles.
    JEL: E32 G31 G32 G35
    Date: 2019–09–09
  5. By: Ivana Marinovic Matovic (Addiko Bank AD Belgrade)
    Abstract: CEO compensations are an effective instrument for adjusting the interests of managers and equity owners, so that full engagement and commitment can only be expected of managers who are sufficiently motivated. Among other things, sufficient motivation is achieved by the use of adequate CEO compensations. This paper analyzes applied models of CEO compensation, and their levels, in the Republic of Serbia and EU member countries. Comparison of CEO compensation in the Republic of Serbia and EU countries will enable the positioning of the Republic of Serbia in the context of EU integration; as well as enable Serbian business organizations to track trends that are current, and structure their CEO compensations to meet managers’ expectations in terms of attractiveness, and equity owners in terms of cost efficiency. The paper will try to determine the existing differences in CEO compensation levels, conditioned by the degree of economic development of the observed countries. The paper will analyze the factors that directly or indirectly affect the level of CEO compensation. It will try to determine which components of CEO compensation are mostly used in business organizations from the EU, and compare the results with business organizations from the Republic of Serbia in order to improve existing practice. As CEO compensations are still underdeveloped area in the Republic of Serbia, the contribution of the paper is expected to be significant, for Serbian business organizations that operate, or plan to operate, on the international market, and allow their managers to work in EU countries. Strategy and policy of CEO compensation is a very sensitive area, so the focus of the paper is on identifying existing differences that could be used in terms of convergence of the CEO compensation practice in the Republic of Serbia to the one that is present in the more advanced EU countries, in the context of EU integration.
    Keywords: CEO compensation, Republic of Serbia, EU integration, compensation trends
    Date: 2019–04
  6. By: Shivani Taneja (University of Essex)
    Abstract: The gender gap in attaining a university qualification has gradually narrowed in Britain and this has motivated the evaluation of gender differences in non-pecuniary returns of education. Therefore, this paper explores the trends in job utility of workers, measured by subjective self-evaluation of satisfaction scores from work. The data shows that while female workers experience higher job utility compared to men during the survey period, male workers are reporting higher utility in recent years, resulting in narrowing gender gap in job utility. Logistic regression models are used to understand the factors contributing to this gender gap. The results suggest that education is unlikely to contribute to this trend whereas unemployment has a small contribution to the emerging pattern. Furthermore, the results show that job utility of male workers is more cyclically sensitive compared to female workers as stalling unemployment during an economic downturn affects men more than women.
    Keywords: Job satisfaction, Unemployment, United Kingdom
    Date: 2019–06
  7. By: Congressional Budget Office
    Abstract: Programs that provide benefits to retired federal civilian workers, retired military personnel, and veterans have long-term effects on the federal budget. The government’s cash payments for those benefits are reported in the budget as outlays when they are made—which means that the long-term costs of current decisions about those benefits are not reflected in the current budget deficit.
    JEL: G00 H50 H83 J32 J45
    Date: 2019–09–10
  8. By: Ekaterina Travova
    Abstract: This paper provides an empirical analysis of possible manipulations of amounts of seized drugs, based on a unique dataset that contains full information on drug crimes in Russia reported during 2013-2014. First, using a standard bunching estimator, I investigate the incentives for police officers to manipulate and find that the motivation most likely arises from the officers’ performance evaluation system. Second, applying a novel bunching technique, I determine that police officers are more likely to manipulate the drug amounts seized from repeat offenders. The overall effect of manipulation is an additional year of incarceration, and this is not dependent on a guilty plea.
    Keywords: drug crimes; police discretion; performance evaluation; incentives;
    JEL: H11 H76 K14 K42
    Date: 2019–04
  9. By: Dilger, Alexander; Schottmüller-Einwag, Ute
    Abstract: This paper examines how corporate governance reporting corresponds to actual conduct regarding severance payment caps for prematurely departing members of companies' executive boards in Germany. For this purpose, we first evaluate the declarations of conformity for all companies listed in the CDAX between 2010 and 2014, which we use to determine conformity and deviation rates, and analyse reasons for deviation. In a further full survey, we assess the compensation amounts of all severance payments made and published by DAX companies to their executive board members who were prematurely terminated, which allows us to compare the respective severance ratio with the cap recommended by the German Corporate Governance Codex (GCGC). We find that more than 20% of companies listed in the CDAX declared deviation in the declaration of conformity, and one-third of all deviations were justified by a rejection of the normative decision of the recommendation. Moreover, in 57% of actual severance cases where DAX companies had previously declared their compliance, the cap was exceeded; yet, none of the companies that had exceeded the cap in a severance case disclosed this in the following declaration of conformity. In the years under review, for the majority of severance cases in companies listed in the DAX, the GCGC's cap did not have any factual binding effect. Finally, in most cases the corporate reports deviated from reality and therefore could not serve as a suitable basis for decisions by the capital market.
    JEL: D86 G34 G38 J33 J63 J65 K12 K31 M12 M52 M55
    Date: 2019

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.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.