nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2021‒01‒04
twelve papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Individual Incentives and Workers’ Contracts: Evidence from a Field Experiment By M. Ali Choudhary; Vasco J. Gabriel; Neil Rickman
  2. International Fiscal-financial Spillovers: The Effect of Fiscal Shocks on Cross-border Bank Lending By Karen Meng Li; Sang-Hyun Kim
  3. What is the Role of Firm-Specific Pay Policies on the Gender Earnings Gap in Canada? By Jiang Li; Benoit Dostie; Gäelle Simard-Duplain
  4. Robot Imports and Firm-Level Outcomes By Alessandra Bonfiglioli; Rosario Crinò; Harald Fadinger; Gino Gancia
  5. Optimal sickness benefits in a Principal-Agent Model By Sébastien Ménard
  6. Eyes wide open: perceived exploitation and its consequences By Ofer, Ephrat; Coyle-Shapiro, Jackie; Pearce, Jone L.
  7. Incentives can't buy me knowledge: The missing effects of appreciation and aligned performance appraisals on knowledge sharing of public employees By Fischer, Caroline
  8. Organizational Drivers of Innovation: The Role of Workforce Agility By F. Landini; C. Franco
  9. Trust and Contracts: Empirical Evidence By Francesco D'Acunto; Jin Xie; Jiaquan Yao
  10. Do recruiters select workers with different personality traits for different tasks? A discrete choice experiment By Wehner, Caroline; de Grip, Andries; Pfeifer, Harald
  11. Gender Differences within the Firm: Evidence from Two Million Travelers By Javier D. Donna; Gregory F. Veramendi
  12. Do Employees Benefit from Worker Representation on Corporate Boards? By Christine Blandhol; Magne Mogstad; Peter Nilsson; Ola Lotherington Vestad

  1. By: M. Ali Choudhary (State Bank of Pakistan); Vasco J. Gabriel (University of Surrey and NIPE-UM); Neil Rickman (University of Surrey)
    Abstract: We present evidence on the operation of incentive pay from a field experiment in Pakistan, looking at piece rates and pay based on rank achieved in a tournament. Importantly, some workers are in contracts ‘tying’ them to the employer for several picking seasons; others are ‘untied’ in the sense of being employed for only the current season. We find that incentive pay (of either type) improves productivity by 30% on average, but that there are important differences across the types of workers: in particular, tournament incentives are less effective amongst the tied workers. We suggest that our main results have implications for tournament theory and the design of incentive pay schemes, particularly to the extent that they may discourage some workers and, thus, reduce incentives.
    JEL: D23 J23 J33 M52
    Date: 2020–10
  2. By: Karen Meng Li (Yonsei Univ); Sang-Hyun Kim (Yonsei Univ)
    Abstract: This paper employs a field experiment to investigate in which information environment teambased incentives work better. The experiment was conducted in two spinning factories in Henan, China. We focus on workers who were doing the same individualistic task but still were paid according to team performances. For about three months, we have given three different types of performance feedback, baseline, intra-team, and inter-team feedbacks. We find that workers' productivity was highest with the intra-team feedback and lowest with the baseline feedback, which suggests that peer pressure and group status concern are of importance in making team incentives work.
    Keywords: Relative performance feedback, Peer pressure, Group identity, Field experiment
    JEL: C93 D91 M52
    Date: 2020–12
  3. By: Jiang Li; Benoit Dostie; Gäelle Simard-Duplain
    Abstract: Using data from the Canadian Employer-Employee Dynamics Database between 2001 and 2015, we examine the impact of firms’ hiring and pay-setting policies on the gender earnings gap in Canada. Consistent with the existing literature and following Card, Cardoso, and Kline (2016), we find that firm-specific premiums explain nearly one quarter of the 26.8% average earnings gap between female and male workers. On average, firms’ hiring practices – due to difference in the relative proportion of women hired at high-wage firms, or sorting – and pay-setting policies – due to differences in pay by gender within similar firms – each explain about one half of this firm effect. The compositional difference between the two channels varies substantially over the life-cycle, by parental and marital status, and across provinces.
    Keywords: Gender Wage Gap,Firm Effects,Marital Status,Linked Employer-Employee Data,Pay-Setting,Sorting,
    JEL: J16 J31 J51 J71
    Date: 2020–12–14
  4. By: Alessandra Bonfiglioli; Rosario Crinò; Harald Fadinger; Gino Gancia
    Abstract: We use French data over the 1994-2013 period to study how imports of industrial robots affect firm-level outcomes. Compared to other firms operating in the same 5-digit sector, robot importers are larger, more productive, and employ a higher share of managers and engineers. Over time, robot import occurs after periods of expansion in firm size, and is followed by improvements in efficiency and a fall in demand for labor. Guided by a simple model, we develop various empirical strategies to identify the causal effects of robot adoption. Our results suggest that, while demand shocks generate a positive correlation between robot imports and employment, exogenous changes in automation lead to job losses. We also find that robot imports increase productivity and the employment share of high-skill professions, but have a weak effect on total sales. The latter result suggests that productivity gains from automation may not be entirely passed on to consumers in the form of lower prices.
    Keywords: automation, displacement, firms, robots
    JEL: J23 J24 O33 D22
    Date: 2020
  5. By: Sébastien Ménard (GAINS - Groupe d'Analyse des Itinéraires et des Niveaux Salariaux - UM - Le Mans Université)
    Abstract: This paper studies the optimal design of sickness benefits in a repeated principal-agent model, where the fraudsters are not observed by the principal. Sickness compensation protects workers against the income fluctuations implied by the risk of illness and its provision is limited by the presence of fraudsters using this protection to temporarily adjust their labour supply. We show that the slope of the optimal contract depends on the dynamics of the rate of fraudsters over time. When the duration of temporary shocks on the disutility of work is shorter than the average duration of diseases, the sickness benefits must increase over time. In addition, A tax dependent on the length of the sick leave makes it possible to minimise the cost for a given promise-keeping constraint. Contrary to intuition, this tax must be decreasing because the necessity to penalise the shortest sick leave to deter agents from cheating.
    Keywords: Sickness benefits,Absence rate,Recursive contracts. JEL: I13,I18,J24
    Date: 2020–11–27
  6. By: Ofer, Ephrat; Coyle-Shapiro, Jackie; Pearce, Jone L.
    Abstract: Drawing on the array of literature on exploitation from several social science disciplines, we propose a new way of seeing employer-employee relationships by introducing the concept of perceived exploitative employee-organization relationships, distinguish it from related concepts, and conduct five studies to develop a scale and test our theoretical model of the effects of such employee perceptions. Contributing to the Employee-Organization Relationships and workplace emotions literatures, perceived exploitation is defined as employees’ perceptions that they have been purposefully taken advantage of in their relationship with the organization, to the benefit of the organization itself. We propose and find that such perceptions are associated with both outward-focused emotions of anger and hostility toward the organization and inward-focused ones of shame and guilt at remaining in an exploitative job. In two studies including construction workers and a time-lagged study of medical residents, we find that the emotions of anger and hostility partially mediate the effects of perceived exploitation on employee engagement, revenge against the organization, organizational commitment, and turnover intentions, whereas the emotions of shame and guilt partially mediate the effects of perceived exploitation on employee burnout, silence, and psychological withdrawal.
    JEL: J50
    Date: 2019–12
  7. By: Fischer, Caroline
    Abstract: This study examines whether incentives affect public employees' intention to share knowledge. Tested incentives satisfy needs for either achievement or appreciation. Both treatments were tested on implicit as well as explicit knowledge sharing. A 2x3 factorial survey experiment was designed to observe within-person and between-person effects. Data were collected from public employees in the core administration and healthcare sector (n=623) in 2018. The analysis indicates that both treatments positively affect knowledge-sharing intention if it is explicit knowledge that ought to be shared. However, no effects of either treatment can be found in either type of knowledge sharing. No negative effect of the tested incentives on knowledge sharing was observed. Hence, incentives might not harm knowledge sharing but also do not pay off in organizational practice. In contrast to these motivation-enhancing human resource practices, ability and opportunity-enhancing practices should be tested to foster knowledge sharing.
    Date: 2020–12–16
  8. By: F. Landini; C. Franco
    Abstract: The interplay between organization practices and innovation is highly relevant in modern business. This paper analyzes whether a specific organizational dimension, namely workforce agility, affects innovative performance. We rationalize this effect within an organizational economics perspective that stresses the role of behavioral motives and skill variety in the innovation process. In particular, we distinguish the contribution of two components: time agility and task agility. Using a sample of nearly 20000 private-sector workplaces in 32 countries, we report conditional correlations between workforce agility and innovation that are consistent with our framework. Establishments with higher workforce agility are more likely to innovate. This relationship holds also when we consider different types of innovation and we distinguish between time and task agility. The analysis of managers’ perceptions about internal working climate and information exchange activities suggest that this effect is likely be driven by the fact that workforce agility improves work motivation and knowledge transmission at the workplace level, favouring innovation. Managerial and policy implications are discussed.
    Keywords: workforce agility, task agility, time agility, innovation
    Date: 2020
  9. By: Francesco D'Acunto; Jin Xie; Jiaquan Yao
    Abstract: Trust between parties should drive the negotiation and design of contract: if parties did not trust each others' reaction to unplanned events, they might agree to pay higher costs of negotiation to complete contracts. Using a unique sample of U.S. principal-agent consulting contracts and a negative shock to trust between parties staggered across space and over time, we find that lower trust increases contract completeness. Not only contract complexity but also the verifiable states of the world contracts cover increase after a drop in trust. The results hold for several text-analysis-based measures of completeness and do not arise when agents are also principals (shareholders) or in other falsification tests. Non-compete agreements, confidentiality and indemnification clauses, and restrictions to agents' actions are more likely to be added to contracts signed in the same locations, same industries, and same years after a negative shock to trust.
    Keywords: empirical contract theory, incomplete contracts, cultural economics, beliefs and choice, corporate finance, consulting, textual analysis, non-compete agreements, big five, fraud, accounting, management, organization
    JEL: D86 D91 J33 L14 Z10
    Date: 2020
  10. By: Wehner, Caroline; de Grip, Andries (RS: GSBE Theme Learning and Work, RS: SBE - MACIMIDE, Research Centre for Educ and Labour Mark); Pfeifer, Harald
    Abstract: This paper explores whether firms recruit workers with different personality traits for different tasks. For our analysis, we used data from a discrete choice experiment conducted among recruiters of 634 firms in Germany. Recruiters were asked to choose between job applicants who differed in seven aspects: professional competence, the ‘big five’ personality traits and the prospective wage level. We found that all personality traits affect the hiring probability of the job applicant; among them, conscientiousness and agreeableness have the strongest effects. However, recruiters’ preferences differed for different job tasks. For analytical tasks, recruiters prefer more open and conscientious applicants, whereas they favour more open, extraverted, and agreeable workers for interactive tasks.
    JEL: J23 D91 M51
    Date: 2020–12–21
  11. By: Javier D. Donna; Gregory F. Veramendi
    Abstract: We document gender differences in the price paid for work-related air travel among similar workers within a firm. We show that women pay consistently less per ticket than men, after accounting for a large set of covariates that include the characteristics of the trips, the employers, and the employees. A large proportion of the lower fares paid by women is explained by women booking flights earlier than men. We investigate potential mechanisms that could explain the observed gender differences. We find that gender differences increase with age, but we find no deviation from this trend during the childbearing years. We also find significant variation in gender differences across the regions of the world. Using country-level data on preference differences, we report that positive and negative reciprocity are factors associated with the documented gender differences, although this result is only suggestive. The documented gender differences have important monetary implications for firms and suggest a potentially important role for workers’ morale within a firm.
    Keywords: gender differences, worker gender differences, airline industry
    JEL: D91 J16 F00 L93 M50
    Date: 2020
  12. By: Christine Blandhol; Magne Mogstad; Peter Nilsson; Ola Lotherington Vestad
    Abstract: Do employees benefit from worker representation on corporate boards? Economists and policymakers are keenly interested in this question – especially lately, as worker representation is widely promoted as an important way to ensure the interests and views of the workers. To investigate this question, we apply a variety of research designs to administrative data from Norway. We find that a worker is paid more and faces less earnings risk if she gets a job in a firm with worker representation on the corporate board. However, these gains in wages and declines in earnings risk are not caused by worker representation per se. Instead, the wage premium and reduced earnings risk reflect that firms with worker representation are likely to be larger and unionized, and that larger and unionized firms tend to both pay a premium and provide better insurance to workers against fluctuations in firm performance. Conditional on the firm’s size and unionization rate, worker representation has little if any effect. Taken together, these findings suggest that while workers may indeed benefit from being employed in firms with worker representation, they would not benefit from legislation mandating worker representation on corporate boards.
    Keywords: worker compensation, worker representation, corporate governance, unions
    JEL: G34 G38 J31 J54 J58
    Date: 2020

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