nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2019‒10‒07
seven papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. How general is managerial human capital? : Evidence from the Retention of Managers after M&As By Kenjiro Hirata; Ayako Suzuki; Katsuya Takii
  2. Linguistic Diversity and Workplace Productivity By Dale-Olsen, Harald; Finseraas, Henning
  3. Why Join a Team? By David Cooper; Krista Saral; Marie Claire Villeval
  4. Pessimism and Overcommitment By Claes Ek; Margaret Samahita
  5. Do Workers Discriminate against Female Bosses? By Abel, Martin
  6. The Impacts of Managerial Autonomy on Firm Outcomes By Namrata Kala
  7. Intrinsic vs. extrinsic motivators on creative collaboration: The effect of sharing rewards. By Giuseppe Attanasi; Ylenia Curci; Patrick Llerena; Giulia Urso

  1. By: Kenjiro Hirata (Faculty of Economics, Kobe International University); Ayako Suzuki (School of International Liberal Studies, Waseda University); Katsuya Takii (Osaka School of International Public Policy, Osaka University)
    Abstract: This paper investigates the transferability of managerial experience by examining how managers' tenures in target firms influence their probability of retention as board members after mergers or acquisitions in Japanese firms. It develops a general equilibrium model that distinguishes several hypotheses on managerial experiences based on the coefficients of tenure on separation, given several data limitations. In particular, the paper provides a novel method to correct for selection biases by utilizing the timing of selection in a selected sample, which does not require a random sample from the population. Our results suggest that Japanese firms value both target firm-specific and general human capital after M&As and that experience as an employee increases firm-specific skills, but at the expense of the accumulation of general skills. However, experience as a board member does not have this effect.
    Keywords: Tenure; Managerial Skill; Managerial Turnover after M&As; Selection Bias; Cox Proportional Hazards Model
    JEL: G34 J41 J63
    Date: 2019–09
  2. By: Dale-Olsen, Harald (Institute for Social Research, Oslo); Finseraas, Henning (Institute for Social Research, Oslo)
    Abstract: We study the importance of linguistic diversity in the workplace for workplace productivity. While cultural diversity might improve productivity through new ideas and innovation, linguistic diversity might increase communication costs and thereby reduce productivity. We apply a new measure of languages' linguistic proximity to Norwegian linked employer-employee Manufacturing data from 2003-12, and find that higher workforce linguistic diversity decreases productivity. We find a negative effect also when we take into account the impact of cultural diversity. As expected proficiency in Norwegian of foreign workers improves since their time of arrival in Norway, the detrimental impact disappears.
    Keywords: productivity, diversity, language diversity, GMM
    JEL: J15 D24 J24
    Date: 2019–09
  3. By: David Cooper (FSU - Florida State University [Tallahassee]); Krista Saral (UNC - University of North Carolina [Charlotte] - UNC - University of North Carolina System); Marie Claire Villeval (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)
    Abstract: We present experiments exploring why high ability workers join teams with less able co-workers when there are no short-term financial benefits. We distinguish between two explanations: pro-social preferences and expected long-term financial gains from teaching future teammates. Participants perform a real-effort task and decide whether to work independently or join a two-person team. Treatments vary the payment scheme (piece rate or revenue sharing), whether teammates can communicate, and the role of teaching. High ability workers are more willing to join teams in the absence of revenue sharing and less willing to join teams when they cannot communicate. When communication is possible, the choice of high ability workers to join teams is driven by expected future financial gains from teaching rather than some variety of pro-social preferences. This result has important implications for the role of adverse selection in determining the productivity of teams.
    Keywords: Teams,teaching,revenue sharing,social preferences,self-selection,experiment
    Date: 2019
  4. By: Claes Ek; Margaret Samahita
    Abstract: Economic agents commonly use commitment devices to limit impulsive behavior in the interest of long-term goals. We provide evidence for excess demand for commitment in a laboratory experiment. Subjects are faced with a tedious productivity task and a tempting option to surf the internet. Subjects state their willingness-to-pay for a commitment device that removes the option to surf. The commitment device is then allocated with some probability, thus allowing us to observe the behavior of subjects who demand commitment but have to face temptation. We find that a significant share of the subjects overestimate their demand for commitment when compared to their material loss from facing the temptation. This is true even when we take into account the potential desire to avoid psychological costs from being tempted. Assuming risk aversion does not change our conclusion, though it suggests that pessimism in expected performance, rather than psychological cost, is the main driver of overcommitment. Our results suggest there is a need to reconsider the active promotion of commitment devices in situations where there is limited disutility from the tempting option.
    Keywords: Commitment device; Pessimism; Self-control
    JEL: C91 D03 D91
    Date: 2019–09
  5. By: Abel, Martin (Middlebury College)
    Abstract: I hire 2,700 workers for a transcription job, randomly assigning the gender of their (fictitious) manager and provision of performance feedback. While praise from a manager has no effect, criticism negatively impacts workers' job satisfaction and perception of the task's importance. When female managers, rather than male, deliver this feedback, the negative effects double in magnitude. Having a critical female manager does not affect effort provision but it does lower workers' interest in working for the firm in the future. These findings hold for both female and male workers. I show that results are consistent with gendered expectations of feedback among workers. By contrast, I find no evidence for the role of either attention discrimination or implicit gender bias.
    Keywords: gender discrimination, gig economy, female leadership
    JEL: J50 J70
    Date: 2019–09
  6. By: Namrata Kala
    Abstract: The allocation of decision rights within organizations influences resource allocation, expansion decisions, and ultimately outcomes. Using a newly constructed dataset, I estimate the effects of an earned autonomy program for State Owned Enterprises (SOEs) in India. The program gave managers (the board of directors) of profitable SOEs more autonomy over strategic decisions such as capital expansion and the formation of joint ventures. I find that autonomy allows SOEs to increase their capital stock and form more strategic partnerships which leads to greater sales and profits. I also find that the likelihood that a manager subsequently joins a board of a private firm is greater for managers of those SOEs which were granted autonomy, indicating that career concerns is a consistent explanation for these managerial decisions. Taken together, these results indicate that large gains in SOE performance are possible without privatization (by policies like earned autonomy) and may occur partly through managers' career concerns.
    JEL: D2 D23 D73 D92 M12 M38 M51 O38 O53
    Date: 2019–09
  7. By: Giuseppe Attanasi; Ylenia Curci; Patrick Llerena; Giulia Urso
    Abstract: Charness and Grieco (2019) have experimentally shown that financial incentives have a positive impact on individual creativity, but only in the case of “close” creativity, i.e., when there are constraints to the creative task that a subject has to accomplish. In this paper, we build on the same “close” creativity assignments of Charness and Grieco (2019) and analyze with undergraduate students and with experts in creativity the interplay between monetary incentives and group cooperation in creative assignments. We introduce a novel model of intrinsic vs. extrinsic motivation to group collaboration in creativity and run a theorydriven experiment to test our experimental hypotheses on the crowding out of intrinsic motivation due to extrinsic motivation to group creativity. We find more creativity in the group than in the individual treatment, apart when there are explicit monetary incentives to co-working (sharing ideas) in the creative assignment. Therefore, while Charness and Grieco (2019) show a positive interplay between monetary incentives (extrinsic individual motivation) and “close” creativity at the individual level, we provide evidence of a negative interplay between monetary incentives and “close” creativity at the group level (crowding out of intrinsic group motivation). Furthermore, and again in line with our model predictions, the latter effect is found more in the experimental sessions with experts in creativity than in those with undergraduate students.
    Keywords: Creativity, Group cooperation, Intrinsic Motivation, Extrinsic Motivation, Crowding out, Experiment.
    JEL: I23 O31 O32
    Date: 2019

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