nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2021‒04‒26
nine papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Worker Commitment and Establishment Performance By John T. Addison; Paulino Teixeira
  2. Job Design, Learning & Intrinsic Motivation By Gibbs, Michael
  3. Diversity and Team Performance in a Kenyan Organization By Benjamin Marx; Vincent Pons; Tavneet Suri
  4. A Structural Model of a Multitasking Salesforce: Multidimensional Incentives and Plan Design By Minkyung Kim; K. Sudhir; Kosuke Uetake
  5. Diversity and Performance in Entrepreneurial Teams By Sophie Calder-Wang; Paul A. Gompers; Kevin Huang
  6. Can Older Workers Be Retrained? Canadian Evidence from Worker-Firm Linked Data By Fang, Tony; Gunderson, Morley; Lee, Byron
  7. The Changing Distribution of the Male Ethnic Wage Gap in Great Britain By Clark, Ken; Nolan, Steve
  8. Cognitive Biases: Mistakes or Missing Stakes? By Benjamin Enke; Uri Gneezy; Brian Hall; David C. Martin; Vadim Nelidov; Theo Offerman; Jeroen van de Ven
  9. “I Still Haven’t Found What I’m Looking For”: Evidence of Directed Search from a Field Experiment By Haoran He; David Neumark; Qian Weng

  1. By: John T. Addison; Paulino Teixeira
    Abstract: Using a cross section of matched data from the employee and management questionnaires of the European Company Survey, this paper investigates the determinants of worker commitment and the potential contribution of commitment to establishment performance. An index of worker commitment is constructed from employer perceptions of the motivation of workers and their retention and absenteeism propensities, while the determinants of commitment are fashioned from observations taken from the worker representation side ordered along dimensions such as perceived organizational trust and involvement. The commitment index is then linked to establishment performance outcomes. Key findings from the commitment equation are the positive role of trust in management, the quality of information exchanged, and the degree of worker representation influence in respect of major decisions taken by management. In turn, commitment emerges as a key correlate of establishment financial performance and labor productivity growth. Our supplemental sensitivity analysis is supportive of the interpretation of commitment as a driver of performance.
    Keywords: commitment, type of workplace representation, financial performance, labor productivity growth, European Company Survey
    JEL: J20 J50
    Date: 2021
  2. By: Gibbs, Michael (University of Chicago)
    Abstract: According to psychologists and neuroscientists, a key source of intrinsic motivation is learning. An economic model of this is presented. Learning may make work less onerous, or the employee may value it in and of itself. Multitasking generates learning: performing one task increases productivity on related tasks. Intrinsic motivation generates a new multitask incentive problem if the rate of learning varies across tasks. With no incentive pay, employee autonomy complements learning because expected output increases as the employee uses his or her knowledge to enhance learning. The second part of the paper adds a simple incentive. Incentive pay does not "crowd out" intrinsic motivation, but it does rebalance effort away from learning and towards output. Learning has complex interactions with performance measurement. A higher rate of learning tends to reduce performance measure distortion, especially for a very distorted measure. It also tends to reduce the potential for manipulation, as does multitasking. However, if job design is strongly imbalanced towards a few key tasks, or learning varies significantly across tasks, a higher rate of learning may increase the employee's ability to manipulate the measure. In that case the firm might prefer an incentive with no autonomy, or autonomy with no incentive.
    Keywords: intrinsic motivation, learning, job design, incentives, performance measurement
    JEL: M5
    Date: 2021–04
  3. By: Benjamin Marx; Vincent Pons; Tavneet Suri
    Abstract: We present the results from a field experiment on team diversity. Individuals working as door-to-door canvassers for a non-profit organization were randomly assigned a teammate, a supervisor, and a list of individuals to canvass. This created random variation within teams in the degree of horizontal diversity (between teammates), vertical diversity (between teammates and their supervisor) and external diversity (between teams and the individuals they canvassed). We observe team-level measures of performance and find that horizontal ethnic diversity decreases performance, while vertical diversity often improves performance, and external diversity has no effect. The data on time use suggests that horizontally homogeneous teams organized tasks in a more efficient way, while vertically homogeneous teams exerted lower effort.
    JEL: D22 J24 L22 M54 O12
    Date: 2021–04
  4. By: Minkyung Kim (UNC Chapel Hill Kenan-Flagler Business School); K. Sudhir (Cowles Foundation & School of Management, Yale University); Kosuke Uetake (School of Management, Yale University)
    Abstract: The paper broadens the focus of empirical research on salesforce management to include multitasking settings with multidimensional incentives, where salespeople have private information about customers. This allows us to ask novel substantive questions around multidimensional incentive design and job design while managing the costs and benefits of private information. To this end, the paper introduces the first structural model of a multitasking salesforce in response to multidimensional incentives. The model also accommodates (i) dynamic intertemporal tradeoffs in effort choice across the tasks and (ii) salesperson’s private information about customers. We apply our model in a rich empirical setting in microfinance and illustrate how to address various identification and estimation challenges. We extend two-step estimation methods used for unidimensional compensation plans by embedding a flexible machine learning (random forest) model in the first-stage multitasking policy function estimation within an iterative procedure that accounts for salesperson heterogeneity and private information. Estimates reveal two latent segments of salespeople- a “hunter” segment that is more efficient in loan acquisition and a “farmer” segment that is more efficient in loan collection. Counterfactuals reveal heterogeneous effects: hunters’ private information hurts the firm as they engage in adverse selection; farmers’ private information helps the firm as they use it to better collect loans. The payoff complementarity induced by multiplicative incentive aggregation softens adverse specialization by hunters relative to additive aggregation, but hurts performance among farmers. Overall, task specialization in job design for hunters (acquisition) and farmers (collection) hurts the firm as adverse selection harm overwhelms efficiency gain.
    Keywords: Salesforce compensation, Multitasking, Multidimensional incentives, Job design, Private information, Adverse selection
    JEL: C61 J33 L11 L23 L14 M31 M52 M55
    Date: 2019–09
  5. By: Sophie Calder-Wang; Paul A. Gompers; Kevin Huang
    Abstract: We study the role of diversity and performance in the entrepreneurial teams. We exploit a unique dataset of MBA students who participated in a required course to propose and start a real micro-business that allows us to examine horizontal diversity (i.e., within the team) as well as vertical diversity (i.e., team to faculty advisor) and their effect on performance. The design of the course allows for identification of the causal implications of horizontal and vertical diversity. The course was run in multiple cohorts in otherwise identical formats except for the team formation mechanism used. In several cohorts, students were allowed to choose their teams from among students in their section (roughly 90 students). In other cohorts, students were randomly assigned to teams based upon a computer algorithm. In the cohorts that were allowed to choose, we find strong selection based upon shared attributes. Among the randomly-assigned teams, greater diversity along the intersection of gender and race/ethnicity significantly reduced performance. However, the negative effect of this diversity is alleviated in cohorts in which teams are endogenously formed. Finally, we find that teams with more female members perform substantially better when their faculty section leader was also female. Because the gender of the faculty section leader is exogenous to the gender make-up of the entrepreneurial team, the positive performance effects can be interpreted as causal. These findings suggest that diversity policies should take adequate consideration of the multiple dimensions of diversity.
    JEL: J1 J15 J16
    Date: 2021–04
  6. By: Fang, Tony (Memorial University of Newfoundland); Gunderson, Morley (University of Toronto); Lee, Byron (China Europe International Business School)
    Abstract: Based on Statistics Canada's worker-firm matched Workplace and Employee Survey, our econometric analysis indicated that the average probability of receiving training was 9.3 percentage points higher for younger (25-49) compared to older (50+) workers. Slightly more than half of that gap is attributed to older workers having a lower propensity to receive training after controlling for the characteristics that affect training. Their lower propensity to receive training tended to prevail across 54 different training measures. We find that older workers can be trained, but this requires training that is designed for their needs including: slower and self-paced instruction; hands-on practical exercises; modular training components that build in stages; familiarizing them with new equipment; and minimizing required reading and the amount of material covered.
    Keywords: training, older workers, worker-firm matched data, Canada
    JEL: J14 J18 J24
    Date: 2021–04
  7. By: Clark, Ken (University of Manchester); Nolan, Steve (University of Manchester)
    Abstract: We decompose the ethnic pay gap in Great Britain across the distribution of hourly wages, yielding a detailed insight into differences between groups and how these vary over pay percentiles and through time. While some groups experience reductions in the pay gap consistent with lower discrimination, including relatively well paid Indian workers and relatively poorly paid Bangladeshis, others - specifically Black groups - face an apparent glass ceiling barring access to well paid jobs. The increasing educational attainment of Britain's ethnic groups provides some optimism around narrowing pay differentials, particularly at the top of the distribution, while the introduction and uprating of the National Minimum/Living Wage has contributed to improvements at the lower end.
    Keywords: ethnic pay gap, race discrimination, minimum wages, decomposition
    JEL: D31 J15 J31 J38
    Date: 2021–04
  8. By: Benjamin Enke; Uri Gneezy; Brian Hall; David C. Martin; Vadim Nelidov; Theo Offerman; Jeroen van de Ven
    Abstract: Despite decades of research on heuristics and biases, empirical evidence on the effect of large incentives – as present in relevant economic decisions – on cognitive biases is scant. This paper tests the effect of incentives on four widely documented biases: base rate neglect, anchoring, failure of contingent thinking, and intuitive reasoning in the Cognitive Reflection Test. In laboratory experiments with 1,236 college students in Nairobi, we implement three incentive levels: no incentives, standard lab payments, and very high incentives that increase the stakes by a factor of 100 to more than a monthly income. We find that response times – a proxy for cognitive effort – increase by 40% with very high stakes. Performance, on the other hand, improves very mildly or not at all as incentives increase, with the largest improvements due to a reduced reliance on intuitions. In none of the tasks are very high stakes sufficient to de-bias participants, or come even close to doing so.
    JEL: D01 D03
    Date: 2021–04
  9. By: Haoran He; David Neumark; Qian Weng
    Abstract: We explore the impact of wage offers on job applications, testing implications of the directed search model and trying to distinguish it from random search. We use a field experiment conducted on a Chinese job board, with real jobs for which we randomly varied the wage offers across three ranges. We find that higher wage offers raise application rates overall, which is consistent with directed search but can also arise with random search. We also find that higher wage offers raise application rates for job seekers with wage offers above reservation wages, and that – among the latter – the increase in application rates is stronger for those with higher reservation wages. The latter two types of evidence are consistent with directed search but not random search. Hence, our evidence lends support to directed search models.
    JEL: E24 J64
    Date: 2021–04

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