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on Human Capital and Human Resource Management |
| By: | Ingrid Huitfeldt (Statistics Norway); Andreas R. Kostøl; Jan Nimczik; Andrea Weber |
| Abstract: | This paper develops a new method to study how workers’ career and wage profiles are shaped by internal labor markets (ILM) and job hierarchies in firms. Our paper tackles the conceptual challenge of organizing jobs within firms into hierarchy levels by proposing a data-driven ranking method based on ob-served worker flows between occupations within firms. We apply our method to linked employer-employee data from Norway that records fine-grained occupational codes and tracks contract changes within firms. Our findings confirm existing evidence that is primarily based on case studies for single firms. We expand on this by documenting substantial heterogeneity in the structure and hierarchy of ILMs across a broad range of large firms. Our findings on wage and promotion dynamics in ILMs are consistent with models of careers in organizations |
| Keywords: | Internal Labor Markets; Organization of Labor; Wage Setting |
| JEL: | J31 J62 M5 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:961&r= |
| By: | Gallus, Jana; Reiff, Joseph; Kamenica, Emir; Fiske, Alan Page |
| Abstract: | Our life is built around coordinating efforts with others. This usually involves incentivizing others to do things, and sustaining our relationship with them. Using the wrong incentives backfires: it lowers effort and tarnishes our relationships. But what constitutes a ‘wrong’ incentive? And can incentives be used to shape relationships in a desired manner? To address these and other questions, we introduce relational incentives theory, which distinguishes between two aspects of incentives: schemes (how the incentive is used) and means (what is used as an incentive). Prior research has focused on means (e.g., monetary vs. non-monetary incentives). Our theory highlights the importance of schemes, with a focus on how they interact with social relationships. It posits that the efficacy of incentives depends largely on whether the scheme fits the relational structure of the persons involved in the activity: participation incentive schemes for communal sharing relations, hierarchy for authority ranking relations, balancing for equality matching relations, and proportional incentive schemes for market pricing relations. We show that these four schemes comprise some of the most prevalent variants of incentives. We then discuss the antecedents and consequences of the use of congruent and incongruent incentive schemes. We argue that congruent incentives can reinforce the relationship. Incongruent incentives disrupt relational motives, which undermines the coordinating relationship and reduces effort. But, importantly, incongruent incentives can also be used intentionally to shift to a new relational model. The theory thus contributes to research on relational models by showing how people constitute and modulate relationships. It adds to the incentives and contracting literatures by offering a framework for analyzing the structural congruence between incentives and relationships, yielding predictions about the effects of incentives across different organizational and individual-level contexts. |
| Keywords: | incentives, social relationships, relational models, congruence, incentive schemes |
| JEL: | D03 J2 J3 M14 M5 Z1 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:109898&r= |
| By: | Hugo Castro-Silva (Universidade de Lisboa); Francisco Lima (Universidade de Lisboa) |
| Abstract: | In the knowledge economy, skilled workers play an important role in innovation and economic growth. However, small firms may not be able to keep these workers. We study how the knowledge-skill complementarity relates to job duration in small and large firms, using a Portuguese linked employer-employee data set. We select workers displaced by firm closure and estimate a discrete-time hazard model with unobserved heterogeneity on the subsequent job relationship. To account for the initial sorting of displaced workers to firms, we introduce weights in the model according to the individual propensity of employment in a small firm. Our results show a lower premium on skills in terms of job duration for small firms. Furthermore, we find evidence of a strong knowledge-skill complementarity in large firms, where the accumulation of firm-specific human capital also plays a more important role in determining the hazard of job separation. For small firms, the complementarity does not translate into longer job duration, even for those with pay policies above the market. Overall, small knowledge-intensive firms struggle to retain high skill workers and find it harder to leverage the knowledge-skill complementarity. |
| Keywords: | knowledge intensity, technology, firm size, small firms, job duration, skills |
| JEL: | A1 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:inf:wpaper:2012.08&r= |
| By: | BALL Kirstie |
| Abstract: | This report re-evaluates the literature about surveillance/monitoring in the standard workplace, in home working during the COVID 19 pandemic and in respect of digital platform work. It utilised a systematic review methodology (see Appendix I). A total of 398 articles were identified, evaluated and synthesised. The report finds that worker surveillance practices have extended to cover many different features of the employees as they work. Surveillance in the workplace targets thoughts, feelings and physiology, location and movement, task performance and professional profile and reputation. In the standard workplace, more aspects of employees’ lives are made visible to managers through data. Employees’ work/non-work boundaries are contested terrain. The surveillance of employees working remotely during the pandemic has intensified, with the accelerated deployment of keystroke, webcam, desktop and email monitoring in Europe, the UK and the USA. Whilst remote monitoring is known to create work-family conflict, and skilled supervisory support is essential, there is a shortage of research which examines these recent phenomena. Digital platform work features end-to-end worker surveillance. Data are captured on performance, behaviours and location, and are combined with customer feedback to determine algorithmically what work and reward are offered to the platform worker in the future. There is no managerial support and patchy colleague support in a hyper-competitive and gamified freelance labour market. Once again there is a shortage of research which specifically addresses the effects of monitoring on those who work on digital platforms. Excessive monitoring has negative psycho-social consequences including increased resistance, decreased job satisfaction, increased stress, decreased organisational commitment and increased turnover propensity. The design and application of monitoring, as well as the managerial practices, processes and policies which surround it influence the incidence of these psycho-social risks. Policy recommendations target at mitigating the psycho-social risks of monitoring and draw upon privacy, data justice and organisational justice principles. Numerous recommendations are derived both for practice and for higher level policy development. |
| Keywords: | digital platform work, COVID-19, monitoring, surveillance |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc125716&r= |
| By: | Rudolf Kerschbamer; Regine Oexl |
| Abstract: | Previous work has shown that unobservable random shocks on output have a detrimental effect on effort provision in short-term ('static') employment relationships. Given the prevalence of long-term ('dynamic') relationships in firms, we investigate whether the impact of shocks is similarly pronounced in gift-exchange relationships where the same principal-agent pair interacts repeatedly. In dynamic relationships, shocks have a significantly less pronounced negative effect on the agent's effort provision than in static relationships. In an attempt to identify the drivers for our results we find that the combination of a repeated-game effect and a noise-canceling effect is required to avoid the detrimental effects of unobservable random shocks on effort provision. |
| Keywords: | Gift exchange, principal agent model, incomplete contracts, random shocks, reciprocity, laboratory experiments, long-term contracts |
| JEL: | C72 C91 D81 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2021-27&r= |
| By: | Job Boerma; Aleh Tsyvinski; Alexander P. Zimin |
| Abstract: | We fully solve an assignment problem with heterogeneous firms and multiple heterogeneous workers whose skills are imperfect substitutes, that is, when production is submodular. We show that sorting is neither positive nor negative and is characterized sufficiently by two regions. In the first region, mediocre firms sort with mediocre workers and coworkers such that output losses are equal across all these pairings (complete mixing). In the second region, high skill workers sort with a low skill coworker and a high productivity firm, while high productivity firms employ a low skill worker and a high skill coworker (pairwise countermonotonicity). The equilibrium assignment is also necessarily characterized by product countermonotonicity, meaning that sorting is negative for each dimension of heterogeneity with the product of heterogeneity in the other dimensions. The equilibrium assignment as well as wages and firm values are completely characterized in closed form. We illustrate our theory with an application to show that our model is consistent with the observed dispersion of earnings within and across U.S. firms. Our counterfactual analysis gives evidence that the change in the firm project distribution between 1981 and 2013 has a larger effect on the observed change in earnings dispersion than the change in the worker skill distribution. |
| JEL: | E0 J0 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29290&r= |