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on Human Capital and Human Resource Management |
| By: | Amodio, Francesco (McGill University); Martinez-Carrasco, Miguel A. (Universidad de los Andes) |
| Abstract: | This paper studies learning within organizations when incentives change. We use a simple principal-agent model to show how, in the presence of imperfect information over the shape of the production function, worker's effort choice changes over time as information is disclosed and processed. We also show that changes in workers compensation can trigger such learning process. We test this hypothesis using personnel records from a Peruvian egg production plant. Exploiting a sudden change in the compensation schedule, we find that workers learn from each other over the shape of the production function. This adjustment process is costly for the firm. |
| Keywords: | organizational learning, workplace incentives, inputs |
| JEL: | D22 D24 J24 J33 M11 M52 M54 O12 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13898&r=all |
| By: | Moritz Drechsel-Grau; Felix Holub |
| Abstract: | This paper investigates the contribution of managers to gender gaps and analyzes whether the over-representation of men in management positions puts women at a disadvantage. Relying on personnel data from one of the largest European manufacturing firms, we separate out the factors explaining gender gaps. Adjusted pay gaps are positive, which means that men earn more than observationally equivalent women. A significant share of pay gaps can be explained by the sorting of men and women to different managers. More importantly, gender gaps in bonus payments causally depend on the manager's gender. Accounting for worker and manager heterogeneity, bonus gaps are larger when the manager is male. This is driven by the fact that performance ratings are more favorable to men if handed out by a male manager. We present suggestive evidence that the relevance of manager gender for pay gaps is driven by discrimination rather than same-gender complementarities in productivity. However, independent of the root cause of these differences in evaluations by manager gender, the findings imply that a lower number of female managers increases gender gaps and thus constitutes a structural disadvantage for women. |
| Keywords: | gender wage gap, performance ratings, managers, manager gender, sorting, personnel data, unconscious discrimination |
| JEL: | J16 J31 J33 J71 M5 D83 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2020_237&r=all |
| By: | David Boto-Garcìa (University of Oviedo); Alessandro Bucciol (Department of Economics (University of Verona)); Luca Zarri (Department of Economics (University of Verona)) |
| Abstract: | Using detailed field data covering ten seasons of the Italian soccer premier league, we provide the first evidence on the key role played by managerial beliefs in firm performance in a high-powered incentives natural setting where managers receive frequent feedback. We show that managers’ confidence and risk tolerance positively affect performance. Next, we document asymmetrically biased belief updating, in line with prior laboratory work on non-managers. By shedding light on overlooked features of manager-firm interplays and managers’ information processing, our findings corroborate and help qualify the “managers matter” view advanced in recent fieldwork based on low-frequency data. |
| Keywords: | Managerial Beliefs, Firm performance, Professional Soccer, Field data |
| JEL: | D01 D22 D81 D91 L20 Z20 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:ver:wpaper:19/2020&r=all |
| By: | Dur, Robert (Erasmus University Rotterdam); Kvaløy, Ola (University of Stavanger); Schöttner, Anja (University of Bonn) |
| Abstract: | Why do some leaders use praise as a means to motivate workers, while other leaders use social punishment? This paper develops a simple economic model to examine how leadership styles depend on the prevailing labor-market conditions for workers. We show that the existence of a binding wage floor for workers (e.g., due to trade union wage bargaining, minimum-wage legislation, or limited-liability protection) can make it attractive for firms to hire a leader who makes use of social punishment. While the use of social punishments generally is socially inefficient, it lessens the need for high bonus pay, which allows the firm to extract rents from the worker. In contrast, firms hire leaders who provide praise to workers only if it is socially efficient to do so. Credible use of leadership styles requires either repeated interaction or a leader with the right social preferences. Only moderately altruistic leaders offer praise, whereas only moderately spiteful leaders employ social punishment. Lastly, we show that when the leaders' and workers' reservation utilities give rise to a bigger income gap between leaders and workers, attracting spiteful leaders becomes relatively less costly and unfriendly leadership becomes more prevalent. |
| Keywords: | leadership styles, incentives, motivation, social preferences, labor-market conditions, wage-setting |
| JEL: | D2 J3 M5 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13860&r=all |
| By: | Ginja, Rita (Uppsala Center for Labor Studies); Karimi, Arizo (Uppsala Center for Labor Studies); Xia, Pengpeng (Yale University) |
| Abstract: | Search frictions make worker turnover costly to firms. A three-month parental l eave expansion in Sweden provides exogenous variation that we use to quantify firms’ adjustment costs upon worker absence and exit. The reform increased women’s leave duration and likelihood of separating from prebirth employers. Firms with greater exposure to the reform hired additional workers and increased incumbent hours, incurring additional wage costs. These adjustment costs varied by firms’ availability of internal and external substitutes. Economy-wide analyses show that a higher reform exposure is correlated with fewer hires and lower starting wages of young women compared to men and older women. |
| Keywords: | Parental Leave; Firm-Specific Human Capital; Statistical Discrimination |
| JEL: | J13 J16 J21 J22 J31 |
| Date: | 2020–11–02 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2020_018&r=all |
| By: | Rene Belderbos; Boris Lokshin; Christophe Boone; Jojo Jacob |
| Abstract: | We investigate how international diversity in Top Management Teams (TMTs) contributes to the effectiveness of geographically dispersed R&D strategies in enhancing innovation performance. Both international work experience and nationality diversity may enhance the effectiveness of geographically dispersed R&D when there is alignment between the countries of work experience and nationality of TMT members, on the one hand, and firms’ R&D locations on the other. This influence is stronger for international work experience diversity than for nationality diversity, as the former provides more task-related knowledge to coordinate R&D activities and is less associated with the risk of social categorization. We find partial support for these notions in a panel analysis of the innovation performance of 165 leading MNCs based in Europe, Japan and the United States. |
| Keywords: | diversity, innovation, internationalization, MNCs, R&D, Top Management Teams (TMTs) |
| Date: | 2020–11–18 |
| URL: | http://d.repec.org/n?u=RePEc:ete:msiper:663275&r=all |
| By: | Vahagn Jerbashian (Universitat de Barcelona); Montserrat Vilalta-Bufi (Universitat de Barcelona) |
| Abstract: | We use data from 14 European countries and provide evidence that the fall in prices of information and communication technologies (ICT) is associated with a significant increase in the share of employees who work from home. Similar results hold within age, gender, and occupation groups. There are notable differences across age groups, however. The effect of the fall in ICT prices on working from home increases with age. A rationale for such a result is that the preference for working from home increases with age. |
| Keywords: | Working from Home, ICT, Age, Gender, Occupations. |
| JEL: | J23 J24 O33 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ewp:wpaper:404web&r=all |
| By: | Van Rens, Thijs (University of Warwick, CAGE and IZA); Oswald, Andrew J. (University of Warwick, CAGE and IZA) |
| Abstract: | Are general lockdowns an appropriate response to the threat of Covid-19? Recent cost-benefit studies do not favour the case for them. Instead, since the virus practises a form of age discrimination (approximately 90% of coronavirus deaths are older than 65), some analysts have suggested an alternative. It is that younger citizens -- the generation worst affected by lockdowns and the one that will predominantly pay the eventual tax bill for furlough -- should be allowed to return to work to sustain the economy. Lockdown advocates argue that this would be dangerous, because older people would get infected by young workers living in the same home. We explore that claim. We find that 96% of UK workers under age 40 do not live with anyone over 65. In fact, 92% of all UK workers live in a household without anyone over 65 years old – and that holds true for white and BAME workers. Releasing young workers would thus expose only a small fraction of older citizens to intra-household transmission, although we recognize that the absolute number of people infected might eventually become considerable, and some vulnerable citizens could potentially be at risk if they live in large households. In general this paper’s results illustrate the potential value of fine-tuning the lifting of restrictions. Our findings buttress the cost-benefit case for age-based policies. |
| Keywords: | coronavirus ; labor market ; recession ; COVID-19 JEL codes: I18 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1315&r=all |
| By: | Abel, Martin (Middlebury College); Buchman, Daniel (Middlebury College) |
| Abstract: | We hire 1,800 Indian gig economy workers for a real-effort transcription task and randomize the gender of the (fictitious) manager as well as the delivery of performance feedback. We find that negative feedback (i.e. criticism) leads to moderate deterioration in worker attitudes, but it increases effort provision in both mandatory and voluntary tasks. By contrast, praise affects neither attitudes nor effort provision. Importantly, feedback effects do not vary between workers assigned to female and male managers. Consistent with this finding, there is no evidence for attention discrimination towards female managers, implicit gender bias, or gendered expectations among workers. By contrast, Abel (2019) employs the same research design in the U.S. and finds substantial gender discrimination and no effect of feedback on effort. This highlights that the effects of feedback and manager gender vary across different contexts. |
| Keywords: | India, gender discrimination, gig economy, feedback |
| JEL: | J50 J70 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13871&r=all |