nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2020‒09‒21
eight papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Reservation Wages and Workers' Valuation of Job Flexibility: Evidence from a Natural Field Experiment By Kuan-Ming Chen; Min Ding; John List; Magne Mogstad
  2. Multi-dimensional model for measurement of the motivation level and its relationship with organizational performance By Stefanescu, Silviu Cristian
  3. Support workers in community mental health teams for older people: exploring sources of satisfaction and stress By Jasper, Rowan; Wilberforce, Mark; Abendstern, Michele; Tucker, Sue; Challis, David
  4. Layoffs and Productivity at a Bangladeshi Sweater Factory By Robert Akerlof; Anik Ashraf; Rocco Macchiavello; Atonu Rabbani
  5. Optimal monitoring design By Georgiadis, George; Szentes, Balázs
  6. Efficiency Wages with Motivated Agents By Jesper Armouti-Hansen; Lea Cassar; Anna Deréky
  7. On Heterogeneous Memory in Hidden-Action Setups: An Agent-Based Approach By Patrick Reinwald; Stephan Leitner; Friederike Wall
  8. Selection into Leadership and Dishonest Behavior of Leaders: A Gender Experiment By Kerstin Grosch; Stephan Müller; Holger A. Rau; Lilia Zhurakhovska

  1. By: Kuan-Ming Chen; Min Ding; John List; Magne Mogstad
    Abstract: Recent changes in labor arrangements have increased interest in estimating and understanding the value of job flexibility. We leverage a large natural field experiment at Uber to create exogenous variation in expected market wages across individuals and over time. Combining this experiment with high frequency panel data on wages and individual work decisions, we document how labor supply responds to exogenous changes in expected market wages in a setting with virtually no restrictions on drive labor allocation. We find that there is i) systematic heterogeneity in labor supply responses both across drivers and within a driver over time, ii) significant fixed costs of beginning a shift, and iii) high rider demand when it is costly for drivers to work. These three findings motivate a model of labor supply with heterogeneous preferences over work schedules, adjustment costs, and statistical dependence between market wages and the costs of driving. We recover the labor supply elasticities and reservation wages of this dynamic labor supply model via a combination of experimental estimates and other data moments. We then perform counterfactual analyses that allow us to examine how preference heterogeneity and adjustment costs influence the responses of workers' to wage incentives as well as infer drivers' willingness to pay for the ability to customize and adjust their work schedule. We also show that a static approach to the driver's dynamic problem delivers materially different estimates of workers' labor supply elasticities and their value of job flexibility.
    Date: 2020
  2. By: Stefanescu, Silviu Cristian
    Abstract: Motivation is an essential ingredient in ensuring employee performance and productivity. Even when employees have the right skills, clear work goals are formulated and there is a favorable work environment, they would not do their job without an intense motivation to achieve these goals. Motivated employees are excited to exert a certain level of effort (intensity), for a certain period of time (persistence), towards a distinct goal or direction. Motivation is essential for any discussion of employee behavior within the organization, as it has a direct link to individual and collective performance; it is assumed that the motivated worker is the productive worker. Not everyone is motivated by the same rewards, and managers need to think about adapting the motivational environment to the individual, depending on the organization's policies. In this paper we propose a multi-dimensional model for measuring the degree of motivation and its relationship with organizational performance.
    Keywords: performance; motivation; multi-dimensional model
    JEL: M12 M21
    Date: 2019–05
  3. By: Jasper, Rowan; Wilberforce, Mark; Abendstern, Michele; Tucker, Sue; Challis, David
    Abstract: Context: Support workers play an essential role in multidisciplinary community mental health teams for older people (CMHTsOP) in England. However, little is known about how they perceive their role or the impact this has on their levels of stress, wellbeing and job satisfaction. Objectives: To compare CMHTsOP support workers’ perceptions of the psychosocial characteristics of their work with those of registered CMHTsOP practitioners. Methods: A postal survey of CMHTsOP staff in nine mental health trusts. Information was collected about job demands, controls and support using the Job Content Questionnaire. Additional data was collected on other psychosocial features of CMHTsOP working using job satisfaction and intention-to-quit measures and a set of bespoke statements which were supplemented by a subset from the Occupational Stress Indicator. Findings: Responses were received from 43 support workers and 166 registered practitioners. Support workers reported significantly lower job demands and better co-worker support than registered practitioners. They were also significantly more satisfied with their jobs and more likely to believe that their skills and strengths were used appropriately. The majority of both groups were positive about their team’s climate and their value and identity within it. Limitations: Although the study explored the psychosocial characteristics of work that contribute to wellbeing, it did not directly measure stress. Implications: Given the growing number of CMHTsOP support workers and their diverse roles, future research might usefully explore the specific tasks which contribute most to individual satisfaction and wellbeing.
    Keywords: support workers; job satisfaction; stress; community mental health teams; older people; well-being
    JEL: R14 J01
    Date: 2019–09–11
  4. By: Robert Akerlof; Anik Ashraf; Rocco Macchiavello; Atonu Rabbani
    Abstract: Conflicts between management and workers are common and can have significant impacts on productivity. We study how workers in a large Bangladeshi sweater factory responded to management’s decision to lay off about a quarter of the workers following a period of labor unrest. Our main finding is that the mass layoff resulted in a large and persistent reduction in the productivity of surviving workers. Moreover, it is specifically the firing of peers with whom workers had social connections – friends - that matters. We also provide suggestive evidence of deliberate shading of performance by workers in order to punish the factory’s management, and a corresponding deliberate attempt by the factory to win the angry workers back by selectively giving them tasks that are more rewarding. By combining ethnographic and survey data on the socialization process with the factory’s internal records, the paper provides a rare glimpse into the aftermath of an episode of labor unrest. A portrait of the firm emerges as a web of interconnected relational agreements supported by social connections.
    Keywords: layoffs, productivity, morale, relational contracts
    JEL: J50 M50 O12
    Date: 2020
  5. By: Georgiadis, George; Szentes, Balázs
    Abstract: This paper considers a Principal–Agent model with hidden action in which the Principal can monitor the Agent by acquiring independent signals conditional on effort at a constant marginal cost. The Principal aims to implement a target effort level at minimal cost. The main result of the paper is that the optimal information-acquisition strategy is a two-threshold policy and, consequently, the equilibrium contract specifies two possible wages for the Agent. This result provides a rationale for the frequently observed single-bonus wage contracts.
    JEL: J1
    Date: 2020–03–29
  6. By: Jesper Armouti-Hansen; Lea Cassar; Anna Deréky
    Abstract: Many organizations nowadays combine profits with a social mission. This paper reveals a new hidden benefit of the mission: its role in facilitating the emergence of efficiency wages. We show that in a standard gift-exchange principals highly underestimate agents’ reciprocity and, thereby, offer wages that are much lower than the profit-maximizing level. This bias has a high social cost: if principals had correct beliefs and thus offered the profit-maximizing wage, efficiency would increase by 86 percent. However, the presence of a social mission (in the form of a positive externality generated by the agent’s effort), by increasing principals' trust, acts as a debiasing mechanism and, thereby, increases efficiency by 50 percent. These results contribute to our understanding of behavior in mission-oriented organizations, to the debate about the relevance of reciprocity in the workplace and open new questions about belief formation in prosocial contexts.
    Keywords: mission motivation, reciprocity, gift exchange, beliefs, efficiency wages
    JEL: D23 M52
    Date: 2020
  7. By: Patrick Reinwald; Stephan Leitner; Friederike Wall
    Abstract: We follow the agentization approach and transform the standard-hidden action model introduced by Holmstr\"om into an agent-based model. Doing so allows us to relax some of the incorporated rather "heroic" assumptions related to the (i) availability of information about the environment and the (ii) principal's and agent's cognitive capabilities (with a particular focus on their memory). In contrast to the standard hidden-action model, the principal and the agent are modeled to learn about the environment over time with varying capabilities to process the learned pieces of information. Moreover, we consider different characteristics of the environment. Our analysis focuses on how close and how fast the incentive scheme, which endogenously emerges from the agent-based model, converges to the second-best solution proposed by the standard hidden-action model. Also, we investigate whether a stable solution can emerge from the agent-based model variant. The results show that in stable environments the emergent result can nearly reach the solution proposed by the standard hidden-action model. Surprisingly, the results indicate that turbulence in the environment leads to stability in earlier time periods.
    Date: 2020–09
  8. By: Kerstin Grosch; Stephan Müller; Holger A. Rau; Lilia Zhurakhovska
    Abstract: Leaders often have to weigh ethical against monetary consequences. Such situations may evoke psychological costs from being dishonest and dismissing higher monetary benefits for others. In a within-subjects experiment, we analyze such a dilemma. We first measure individual dishonest behavior when subjects report the outcome of a die roll, which determines their payoffs. Subsequently, they act as leaders and report payoffs for a group including themselves. In our main treatment, subjects can apply for leadership, whereas in the control treatment, we assign leadership randomly. Results reveal that women behave more dishonestly as leaders while men behave similarly in both the individual and the group decision. For female leaders, we find that sorting into leadership is not related to individual honesty preferences. In the control we find that female leaders do not increase dishonesty. A follow-up study reveals that female leaders become more dishonest after assuming leadership, as they align dishonest behavior with their belief on group members’ honesty preferences.
    Keywords: leadership, decision for others, lab experiment, gender differences, dishonesty
    JEL: C91 H26 J16
    Date: 2020

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