nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2020‒07‒20
eight papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. The Allocation of Authority in Organizations: A Field Experiment with Bureaucrats By Bandiera, Oriana; Best, Michael; Khan, Adnan; Prat, Andrea
  2. Using Social Connections and Financial Incentives to Solve Coordination Failure: A Quasi-Field Experiment in India's Manufacturing Sector By Afridi, Farzana; Dhillon, Amrita; Li, Sherry Xin; Sharma, Swati
  3. The Influence of Organizational Culture and Compensation on Employee Performance with Work Motivation as a Mediating Variable By Ilzar Daud
  4. Cooperation in a Company: A Large-Scale Experiment By Deversi, Marvin; Kocher, Martin G.; Schwieren, Christiane
  5. Gender Promotion Gaps: Career Aspirations and Workplace Discrimination By Azmat, Ghazala Y.; Cuñat, Vicente; Henry, Emeric
  6. The Cost of Job Loss By Burdett, Kenneth; Carrillo-Tudela, Carlos; Coles, Melvyn G
  7. The Performance of Diverse Teams: Evidence from U.S. Mutual Funds By Evans, Richard B.; Prado, Melissa; Rizzo, A. Emanuele; Zambrana, Rafael
  8. Material Incentives and Effort Choice: Evidence from an Online Experiment Across Countries By Davies, Elwyn; Fafchamps, Marcel

  1. By: Bandiera, Oriana; Best, Michael; Khan, Adnan; Prat, Andrea
    Abstract: We design a field experiment to study how the allocation of authority between frontline procurement officers and their monitors affects performance both directly and through the response to incentives. In collaboration with the government of Punjab, Pakistan, we shift authority from monitors to procurement officers and introduce financial incentives to a sample of 600 procurement officers in 26 districts. We find that autonomy alone reduces prices by 9% without reducing quality and that the effect is stronger when the monitor tends to delay approvals for purchases until the end of the fiscal year. In contrast, the effect of performance pay is muted, except when agents face a monitor who does not delay approvals. The results illustrate that organizational design and anti-corruption policies must balance agency issues at different levels of the hierarchy.
    JEL: D23 H11 H57 O17 O23
    Date: 2020–02
  2. By: Afridi, Farzana; Dhillon, Amrita; Li, Sherry Xin; Sharma, Swati
    Abstract: Production processes are often organized in teams, yet there is limited evidence on whether and how social connections and financial incentives affect productivity in tasks that require coordination among workers. We simulate assembly line production in a lab-in-the-field experiment in which workers exert real effort in a minimum-effort game in teams whose members are either socially connected or unconnected and are paid according to the group output. We find that group output increases by 18%, and coordination improves by 30-39% when workers are socially connected with their co-workers. These findings can plausibly be explained by the higher levels of pro-social motivation between co-workers in socially connected teams.
    Keywords: caste-based networks; coordination; Financial incentives; minimum effort game; output; social incentives
    JEL: C93 D20 D22 D24 J33
    Date: 2020–01
  3. By: Ilzar Daud (Faculty of Economics and Business, Universitas Tanjungpura, Pontianak, Indonesia Author-2-Name: Author-2-Workplace-Name: Author-3-Name: Author-3-Workplace-Name: Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:)
    Abstract: Objective - This study examines the influence of organizational culture and compensation on employee performance with work motivation as a mediating variable. This study was conducted at the State Owned Bank of Pontianak, Indonesia. Methodology/Technique - The population in this study is 150 employees from a State-Owned Bank. The sampling method uses census techniques so that the number of samples used is 150 employees. The research data was collected using a questionnaire which is then analyzed using a path analysis technique using SPSS software to examine the relationships among the constructs, which are: organizational culture, compensation, work motivation and employee performance. Findings - The results show that, in the first substructure, organizational culture and compensation have a significant influence on work motivation. In the second substructure, organizational culture, compensation and work motivation have a significant influence on employee performance. The path analysis results show that work motivation does not mediate the relationship between organizational culture and employee performance, whereas the relationship between compensation and employee performance is mediated by work motivation. Novelty - Previous studies have been carried out in many western countries, raising doubts about generalizations in the same research results in developing countries such as Indonesia. Therefore, the novelty is that this study is carried out in the context of developing countries, especially in the State-Owned Bank in West Kalimantan, Indonesia.Type of Paper - Empirical.
    Keywords: Organizational Culture; Compensation; Work Motivation; Employee Performance.
    JEL: L22 M12 M19
    Date: 2020–06–30
  4. By: Deversi, Marvin (University of Munich (LMU)); Kocher, Martin G. (Institute for Advanced Studies, Vienna, University of Vienna, and University of Gothenburg); Schwieren, Christiane (University of Heidelberg)
    Abstract: We analyze cooperation within a company setting in order to study the relationshipbetween cooperative attitudes and financial as well as non-financial rewards. In to-tal, 910 employees of a large software company participate in an incentivized onlineexperiment. We observe high levels of cooperation and the typical conditional con-tribution patterns in a modified public goods game. When linking experiment andcompany record data, we observe that cooperative attitudes of employees do not payoff in terms of financial rewards within the company. Rather, cooperative employeesreceive non-financial benefits such as recognition or friendship as the main rewardmedium. In contrast to most studies in the experimental laboratory, sustained levelsof cooperation in our company setting relate to non-financial values of cooperationrather than solely to financial incentives.
    Keywords: cooperation, social dilemma, field experiment, company
    JEL: C93 D23 H41 J31 J32 M52
    Date: 2020–05
  5. By: Azmat, Ghazala Y.; Cuñat, Vicente; Henry, Emeric
    Abstract: Using a nationally representative longitudinal survey of lawyers in the U.S., we document a sizeable gap between men and women in their early aspirations to become law firm partners, despite similar early investments and educational characteristics. This aspiration gap can explain a large part of the gender promotion gap that is observed later. We propose a model to understand the role of aspirations and then empirically test its predictions. We show that aspirations create incentives to exert effort and are correlated with expectations of success and the preference for becoming a partner. We further show that aspirations are affected by early work experiences - facing harassment or demeaning comments early in the career affects long-term promotion outcomes mediated via aspirations. Our research highlights the importance of accounting for, and managing, career aspirations as an early intervention to close gender career gaps.
    Keywords: career aspirations; gender gaps; Promotion
    JEL: J16 J44 K40 M51
    Date: 2020–01
  6. By: Burdett, Kenneth; Carrillo-Tudela, Carlos; Coles, Melvyn G
    Abstract: This paper identifies an equilibrium theory of wage formation and endogenous quit turnover in a labour market with on-the-job search, where risk averse workers accumulate human capital through learning-by-doing and lose skills while unemployed. Optimal contracting implies the wage paid increases with experience and tenure. Indirect inference using German data determines the deep parameters of the model. The estimated model not only reproduces the large and persistent fall in wages and earnings following job loss, a new structural decomposition finds foregone human capital accumulation (while unemployed) is the worker's major cost of job loss.
    Keywords: Human Capital Accumulation; job loss; job search
    JEL: J41 J42 J63 J64
    Date: 2020–02
  7. By: Evans, Richard B.; Prado, Melissa; Rizzo, A. Emanuele; Zambrana, Rafael
    Abstract: We use the U.S. mutual fund industry to study the relation between team diversity and performance. Focusing on diversity concerning political ideology, we find that diverse portfolio manager teams outperform homogeneous teams and have a higher active share, and tracking error. These results are robust to controlling for manager and family fixed effects, as well as other dimensions of diversity, manager political connections, and incentives. We also find that political polarization has a strong limiting effect of diversity on performance, consistent with a reversal of the benefits of diversified perspectives when external forces negatively affect team trust and cooperation. In assessing possible mechanisms for the observed outperformance, we find evidence consistent both with improved decision-making due to the increased variety of perspectives, as well as increased monitoring by heterogeneous team members. Lastly, in exploring why diverse teams are not more prevalent in the industry, we find that entrenched managers prefer homogeneous teams and that local labor markets are constrained in their supply of ideologically diverse managers.
    Keywords: Â Mutual fund; Campaign Contributions; Dispersion in Beliefs; diversity; Labor incentives; PACs; Polarization; Political Ideology; Teams
    JEL: G11 G23 J33 J44 L22 L25 L84 M12 M52
    Date: 2020–01
  8. By: Davies, Elwyn; Fafchamps, Marcel
    Abstract: We conduct in the an interactive online experiment framed as an employment contract between employer and worker. Subjects from the US and India are matched in pairs within and across countries. Employers make a one-period offer to a worker who can either decline or choose a high or low effort. The offer is made from within a restricted and variable set of possible contracts: high and low fixed wage; bonus and malus contracts; and bonus and malus with reneging. High effort is always efficient. Self-interest predicts a fraction of observed choices, but many choices indicate conditional or unconditional cooperation instead. Indian subjects are more likely to play unconditional cooperation and provide high effort more often. US subjects are more likely to follow self-interest. Indian subjects reach a more efficient outcome than US subjects in 5 of the 6 treatments. Survey data on demographics and attitudes to incentives is unable to predict behavioral differences between the two countries, suggesting the possible existence of cultural differences in the response to labor incentives.
    Keywords: conditional cooperation; Cross-country comparisons; intrinsic motivation; Labor contracts; work incentives
    JEL: D9 J31 O12 O57
    Date: 2020–01

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