nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2022‒05‒23
six papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Performance Evaluation, Influence Activities, and Bureaucratic Work Behavior: Evidence from China By Alain de Janvry; Guojun He; Elisabeth Sadoulet; Shaoda Wang; Qiong Zhang
  2. Relational Contracts and Hierarchy By Chongwoo Choe; Shingo Ishiguro
  3. Performance Ranks, Conformity, and Cooperation: Evidence from a Sweater Factory By Anik Ashraf
  4. JAQ of All Trades: Job Mismatch, Firm Productivity and Managerial Quality By Luca Coraggio; Marco Pagano; Annalisa Scognamiglio; Joacim Tåg
  5. The allocation of incentives in multi-layered organizations By Erika Deserranno; Stefano Caria; Philipp Kastrau; Gianmarco León-Ciliotta
  6. Do Management Practices Matter in Further Education? By McNally, Sandra; Schmidt, Luis; Valero, Anna

  1. By: Alain de Janvry (University of California, Berkeley); Guojun He (Hong Kong University of Science and Technology); Elisabeth Sadoulet (University of California, Berkeley); Shaoda Wang (University of Chicago); Qiong Zhang (Renmin University of China)
    Abstract: Subjective performance evaluation is widely used by firms and governments to provide work incentives. However, delegating evaluation power to local senior leadership could induce influence activities: agents might devote much effort to pleasing their supervisors, rather than focusing on productive tasks that benefit their organizations. We conduct a large-scale randomized field experiment among Chinese local government employees and provide the first rigorous empirical evidence on the existence and implications of influence activities. We find that employees do engage in evaluator-specific influence to affect evaluation outcomes, and that this process can be partly observed by their co-workers. However, introducing uncertainty in the identity of the evaluator discourages evaluator-specific influence activities and significantly improves the work performance of local government employees.
    Keywords: subjective evaluation, influence activities, civil servants, work performance
    JEL: M12 D73 F63
    Date: 2020–09
  2. By: Chongwoo Choe (Monash University, Department of Economics); Shingo Ishiguro (Osaka University, Graduate School of Economics)
    Abstract: We study optimal organization design with one principal and two agents, who interact through long-term relational contracts. In centralization, the principal contracts with both agents. In hierarchy, the principal contracts with one agent, who is delegated authority to contract with the other agent. We derive necessary and sufficient conditions for each organizational structure to achieve the first best. Hierarchy outperforms centralization when players are sufficiently patient and business conditions are favorable enough to alleviate agents’ incentive problems. We apply our theory to evaluate the two contrasting models of supplier networks in the automotive industry in Japan and the US.
    Keywords: Relational Contracts, Centralization, Hierarchy, Supplier Networks
    JEL: D23 D82 D86
    Date: 2022–05
  3. By: Anik Ashraf
    Abstract: Performance ranks introduce a trade-off for workers. They have to choose between signaling high productivity or signaling social compatibility to peers. Using a long-term experiment at a sweater factory, this paper disentangles the incentives underlying performance ranks. Treated workers receive either private or public ranks. In response, intrinsic incentives from private ranks do not affect productivity. But publicly-ranked workers reduce productivity to conform to their social groups in the workplace. Additionally, cooperation decreases among the workers, although with limited effect on productivity. The paper shows how inducing competition among workers may be counterproductive for firms.
    Keywords: ranks, social conformity, cooperation
    JEL: D23 J53 O15
    Date: 2022
  4. By: Luca Coraggio (University of Naples Federico II); Marco Pagano (University of Naples Federico II and EIEF); Annalisa Scognamiglio (University of Naples Federico II); Joacim Tåg (Research Institute of Industrial Economics (IFN))
    Abstract: Does the matching between workers and jobs help explain productivity differentials across firms? To address this question we develop a job-worker allocation quality measure (JAQ) by combining employer-employee administrative data with machine learning techniques. The proposed measure is positively and significantly associated with labor earnings over workers’ careers. At firm level, it features a robust positive correlation with firm productivity, and with managerial turnover leading to an improvement in the quality and experience of management. JAQ can be constructed for any employer-employee data including workers’ occupations, and used to explore the effect of corporate restructuring on workers’ allocation and careers.
    Date: 2022
  5. By: Erika Deserranno; Stefano Caria; Philipp Kastrau; Gianmarco León-Ciliotta
    Abstract: A classic problem faced by organizations is to decide how to distribute incentives among their different layers. By means of a field experiment with a large public-health organization in Sierra Leone, we show that financial incentives maximize output when they are equally shared between frontline health workers and their supervisor. The impact of this intervention on completed health visits is 61% larger than the impact of incentive schemes that target exclusively the worker or the supervisor. Also, the shared incentives uniquely improve overall health-service provision and health outcomes. We use these experimental results to structurally estimate a model of service provision and find that shared incentives are effective because worker and supervisor effort are strong strategic complements, and because side payments across layers are limited. Through the use of counterfactual model experiments, we highlight the importance of effort complementarities across the different layers of an organization for optimal policy design.
    Keywords: Incentives, multi-layered organizations, effort complementarities, side payments, output
    JEL: O15 O55 I15 J31 M52
    Date: 2022–04
  6. By: McNally, Sandra (University of Surrey); Schmidt, Luis (London School of Economics); Valero, Anna (London School of Economics)
    Abstract: Further Education colleges are a key way in which 16-19 year olds acquire skills in the UK (much like US Community Colleges), especially those from low income backgrounds. Yet, little is known about what could improve performance in these institutions. We design and conduct the world's first management practices survey in these colleges (based on the World Management Survey) and match this to administrative longitudinal data on over 40,000 students. Value added regressions with rich controls suggest that structured management matters for educational outcomes (e.g. upper secondary qualifications), especially for students from low-income backgrounds. In a hypothetical scenario where a learner is moved from a college at the 10th percentile of management practices to the 90th, this would be associated with 8% higher probability of achieving a good high school qualification, which is nearly half of the educational gap between those from poor and non-poor backgrounds. Hence, improving management practices may be an important channel for reducing inequalities.
    Keywords: management practices, further education
    JEL: I20 J24
    Date: 2022–04

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