|
on Human Capital and Human Resource Management |
| By: | Andrew Ellul (Indiana University and CSEF); Marco Pagano (Università di Napoli Federico II, CSEF, EEIF, CEPR and ECGI); Annalisa Scognamiglio (Università di Napoli Federico II and CSEF) |
| Abstract: | Employees in finance are known to earn higher wages and returns to talent than non-finance workers since the 1990s, suggesting that finance may have attracted talent at the expense of other industries. However, the allocation of talent is likely to respond to differences in career paths across industries, not in wages at a given date. We analyze the careers of 9,964 individuals from 1980 to 2017 based on their resumes, and find that they tend to remain in the same industry for most of their working lives, consistently with them choosing occupations based on comparisons of entire career paths. Comparing various aspects of careers – levels, slopes, PDV and risk of pay profiles – we document that finance as a whole offers a career premium compared to manufacturing and high tech, through higher and steeper pay profiles. This however masks significant diversity within finance: while asset managers enjoy a large career premium and no commensurate career risks, the opposite applies to banking and insurance employees. Furthermore, relative to manufacturing, the asset management career premium has risen for cohorts entering soon before and during the financial crisis, even after controlling for career risk, while the high- tech career premium has become commensurately large for the latest cohorts. |
| Keywords: | careers, hedge funds, asset managers, market discipline, scarring effects. |
| JEL: | G20 G23 J24 J62 J63 |
| Date: | 2020–05–06 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:561&r=all |
| By: | Kvaløy, Ola (UiS Business School, University of Stavanger); Olsen, Trond E. (Dept. of Business and Management Science, Norwegian School of Economics) |
| Abstract: | Reward systems based on balanced scorecards typically connect pay to an index, i.e. a weighted sum of multiple performance measures. However, there is no formal incentive model that actually describe this kind of index contracts as an optimal solution. In this paper, we show that an index contract may indeed be optimal if performance measures are non-verifiable so that the contracting parties must rely on self-enforcement. Under standard assumptions, the optimal self-enforcing (relational) contract between a principal and a Multitasking agent is an index contract where the agent gets a bonus if a weighted sum of performance outcomes on the various tasks (the index) exceeds a hurdle. For a parametric (multinormal) specification, the efficiency of the contract improves with higher precision of the index measure, since this strengthens incentives. Correlations between measurements may for this reason be beneficial. For a similar reason, the principal may also want to include verifiable performance measures in the relational index contract in order to improve incentives. |
| Keywords: | Relational contracts; balanced scorecards; multiple performance measures; index contracts; performance reward |
| JEL: | D00 D20 D21 D80 D86 |
| Date: | 2020–05–08 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhhfms:2020_003&r=all |
| By: | Schildberg-Hörisch, Hannah; Trieu, Chi; Willrodt, Jana |
| Abstract: | Debates about affirmative action often revolve around fairness. Accordingly, we document substantial heterogeneity in the fairness perception of various affirmative action policies. But do these differences translate into different consequences? In a laboratory experiment, we study three different quota rules that favor individuals whose performance is low, either due to bad luck (discrimination), low productivity, or choice of a short working time. Higher fairness perceptions coincide with a higher willingness to compete and less retaliation against winners. No policy harms overall efficiency or post-competition teamwork. Furthermore, individuals seem to internalize the normbehind the policies that are perceived as fairest. |
| Keywords: | affirmative action,fairness ideals,experiment,tournament,real effort |
| JEL: | C91 D02 D63 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:338&r=all |
| By: | Zahra Murad (University of Portsmouth); Chris Starmer (University of Nottingham) |
| Abstract: | We investigate whether relative performance feedback can create biases in confidence leading it to ‘snowball’. We study elicited confidence about own performance, relative to other group members, in three stages. As subjects move across stages, we change group composition so that new groups contain either only top performers or only bottom performers, from the previous stage. Between treatments, we manipulate whether subjects know about their own past relative performance or that of currently matched group members. In the NoFeedback treatment, they know neither of these things and confidence remains calibrated and stable across the stages. In both of the other two treatments, we provide feedback on own performance and, in both of these treatments, confidence snowballs significantly in the direction of the feedback: confidence consistently rises among top performers and falls among bottom performers. In one of these treatments - the OwnFeedback treatment, which we interpret as inducing full reference group neglect – subjects are not told about how their reference group is changing. In the FullFeedback treatment, however, subjects do have a basis for judging that their own performance feedback is essentially uninformative, yet we still find strong evidence that confidence snowballs and only limited evidence that they are weaker than those arising from full reference group neglect. Hence, the results are broadly consistent with the reference group neglect hypothesis. The results suggest the possibility of confidence biases emerging and snowballing in a potentially wide range of field settings. |
| Keywords: | overconfidence, relative performance feedback, confidence updating |
| JEL: | C91 D81 |
| Date: | 2020–05–14 |
| URL: | http://d.repec.org/n?u=RePEc:pbs:ecofin:2020-08&r=all |
| By: | Burzynska, Katarzyna; Contreras, Gabriela (Radboud University) |
| Abstract: | Whereas governments are increasingly considering affirmative action programs to increase corporate board diversity, the effect of such programs can be superficial as they do not address the underlying problem, which is women's access to and inclusion in relevant corporate networks. To address this issue, we study the relationship among affirmative action programs (binding gender quotas and non-binding gender targets), director networks, and the number of board positions individual directors hold given their gender. We use personal, professional, and network characteristics of 25,127 unique directors from 2,435 public firms in 32 European countries over the period of 2000 through 2017. We find that in the absence of affirmative action programs, women directors benefit less from their networks than men directors suggesting the existence of a gender gap in network benefits. After the passage of binding gender quotas, this gender gap in network benefits narrows between women and men directors. Overall, this research suggests that binding gender quotas enhance the inclusion of women in corporate director networks and may help in leveling the playing field in the way these networks are used for achieving top management positions. |
| Date: | 2020–04–21 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:zc8r5&r=all |
| By: | Marie Boltz; Bart Cockx; Ana María Díaz; Luz Magdalena Salas; Bart Cockx; Ana María Díaz; Luz Magdalena Salas |
| Abstract: | Resumen Publicamos anuncios de trabajo reales para observar la elección de personas buscando empleo en el mercado laboral Bogotano en su entorno natural. Diseñamos un experimento de campo que se llevó a cabo en tres etapas. Primero, los aplicantes llenan su información básica para aplicar al puesto de trabajo y realizan una prueba previa al empleo para medir su productividad ex ante. Segundo, aleatorizamos a todos los aplicantes en diferentes tratamientos, variando el número de horas trabajadas a la semana y el grado de flexibilidad en el horario de trabajo. Finalmente, realizamos ofertas de trabajo reales a un subconjunto de aplicantes dentro de los que estaban interesados en continuar en el proceso de selección. Nuestro estudio es innovador porque tiene una medida ex ante de productividad que permite distinguir entre la productividad inducida por la selección (sorting) y la inducida por la motivación (u otras características ex post). Los resultados muestran que no se puede aumentar la productividad ex post al ofrecer contratos flexibles porque las personas más productivas no se seleccionan; es decir no hay evidencia de sorting. Sin embargo, encontramos que los contratos flexibles atraen más a mujeres con personas dependientes dentro del hogar. ***** Abstract We placed real job advertisements to observe labor market participants’ choices in their natural environment. We used a three stage experimental method. Following a standard job post, applicants had to fill in their credentials and to perform a pre-employment test to measure their ex ante productivity. We then randomized all participants into different treatments varying the flexibility in working hours and the total hours worked, and finally, made real job offers. Our study is innovative in that it has an ex ante measure of productivity that allows distinguishing between the enhanced productivity induced by sorting and the one induced by motivation (or other ex post features). We find that productivity cannot be raised by announcing flexible contracts because more productive individuals do not sort. We do find that flexible contracts attract more women with dependents. |
| Keywords: | flexible working time arrangements, part-time workers, productivity, labor market sorting, labormarket flexibility, work-life balance |
| JEL: | J21 J22 J23 J24 J33 |
| Date: | 2020–04–03 |
| URL: | http://d.repec.org/n?u=RePEc:col:000416:018140&r=all |