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on Human Capital and Human Resource Management |
| By: | Kusterer, David (University of Cologne); Sliwka, Dirk (University of Cologne) |
| Abstract: | We study the determinants of biases in subjective performance evaluations in an MTurk experiment to test the implications of a standard formal framework of rational subjective evaluations. In the experiment, subjects in the role of workers work on a real effort task. Subjects in the role of supervisors observe subsamples of the workers' output and assess their performance. We conduct 6 experimental treatments varying (i) whether workers' pay depends on the performance evaluation, (ii) whether supervisors are paid for the accuracy of their evaluations, and (iii) the precision of the information available to supervisors. In line with the predictions of the model of optimal evaluations we find that ratings are more lenient and less accurate when they determine bonus payments and that rewards for accuracy reduce leniency. When supervisors have access to more detailed performance information their ratings vary to a stronger extent with observed performance. In contrast to the model's prediction we do not find that more prosocial supervisors always provide more lenient ratings, but that they invest more time in the rating task and achieve a higher rating accuracy. |
| Keywords: | subjective performance evaluation, bias, bonuses, differentiation, social preferences |
| JEL: | J33 C91 M52 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15496&r= |
| By: | Richard B. Freeman; Xiaofei Pan; Xiaolan Yang; Maoliang Ye |
| Abstract: | Team incentives are important in many compensation systems that pay workers according to the output of their team as well as to their own output, with team bonuses often depending on whether the team meets or exceeds specified thresholds. Yet little is known about how team members with different abilities respond to compensation rules and thresholds. We contrast the performance of lower ability participants and higher ability participants in an experiment with three distribution schemes – equal sharing, piece rate sharing, and tournament style winner-takes-all – in settings with and without a team threshold. Workers randomly assigned to equal sharing had higher productivity than those assigned to winner-takes-all and had similar productivity to workers in individual piece-rate scheme with no team element. Output under equal sharing was boosted by the higher productivity of less able workers, possibly motivated by a desire to avoid guilt feelings about letting down their partners, per models of guilt aversion. Given a choice of distribution schemes, participants selected piece rate sharing over equal sharing and favored both of those over winner-takes-all, with persons facing a team threshold evincing greater preference for equal sharing and concern about cooperation in chatting about the teams’ compensation system than others. The findings suggest that organizations with teams of workers with varying abilities are likely to do better if the organization can fully consider lower ability workers’ responsiveness to sharing in rewards, e.g., to have an equal sharing component in its compensation system when they are strongly guilt averse. |
| JEL: | C91 C92 D23 J33 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30427&r= |
| By: | John A. List; Rohen Shah |
| Abstract: | In organizations, teams are ubiquitous. “Weakest Link” and “Best Shot” are incentive schemes that tie a group member’s compensation to the output of their group’s least and most productive member, respectively. In this paper, we test the impact of these incentive schemes by conducting two pilot RCTs (one in-person, one online), which included more than 250 graduate students in a graduate math class. Students were placed in study groups of three or four students, and then groups were randomized to either control, Weakest Link, or Best Shot incentives. We find evidence that such incentive approaches can affect test scores, both in-person and online. |
| JEL: | C9 C93 D79 I2 J3 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30374&r= |
| By: | Jan Feld (School of Economics and Finance, Victoria University of Wellington); Edwin Ip (Department of Economics, University of Exeter); Andreas Leibbrandt (Department of Economics, Monash University); Joseph Vecci (Department of Economics, University of Gothenburg) |
| Abstract: | Women are significantly underrepresented in the technology sector. We design a field experiment to identify statistical discrimination in job applicant assessments and test treatments to help improve hiring of the best applicants. In our experiment, we measure the programming skills of job applicants for a programming job. Then, we recruit a sample of employers consisting of human resource and tech professionals and incentivize them to assess the performance of these applicants based on their resumes. We find evidence consistent with inaccurate statistical discrimination: while there are no significant gender differences in performance, employers believe that female programmers perform worse than male programmers. This belief is strongest among female employers, who are more prone to selection neglect than male employers. We also find experimental evidence that statistical discrimination can be mitigated. In two treatments, in which we provide assessors with additional information on the applicants' aptitude or personality, we find no gender differences in the perceived applicant performance. Together, these findings show the malleability of statistical discrimination and provide levers to improve hiring and reduce gender imbalance. |
| Keywords: | inaccurate beliefs, discrimination, gender, field experiment |
| JEL: | J71 D90 C93 |
| Date: | 2022–09–16 |
| URL: | http://d.repec.org/n?u=RePEc:exe:wpaper:2205&r= |
| By: | Matteo Ploner |
| Abstract: | Individuals and organizations may delegate others to perform actions they would not do themselves because of moral constraints. In our experimental setting, a Principal can either self-report a value in a die-under-the-cup task or delegate the report to an Agent who has no material interest in the report. We experimentally manipulate the relative efficiency of the report: the Agent’s prospect either stochastically dominates that of the Principal or vice versa. We find that Principals have a high propensity to lie and delegate only when the Agent’s prospect is more efficient. Agents generally behave honestly, but those with higher prosocial attitudes tend to lie when assigned an inefficient lottery, most likely not to let down the Principal. |
| Keywords: | Honesty, Decision Making for Others, Belief-based preferences. |
| JEL: | D91 C91 D81 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpce:2202&r= |
| By: | Augustin Bergeron; Pedro Bessone; John Kabeya Kabeya; Gabriel Z. Tourek; Jonathan L. Weigel |
| Abstract: | The assignment of workers to tasks and teams is a key margin of firm productivity and a potential source of state effectiveness. This paper investigates whether a low-capacity state can increase its tax revenue by optimally assigning its tax collectors. We study the two-stage random assignment of property tax collectors into teams and to neighborhoods in a large Congolese city. The optimal assignment involves positive assortative matching on both dimensions: high (low) ability collectors should be paired together, and high (low) ability teams should be paired with high (low) payment propensity households. Positive assortative matching stems from complementarities in collector-to-collector and collector-to-household match types. We provide evidence that these complementarities reflect in part high-ability collectors exerting greater effort when matched with other high-ability collectors. According to our estimates, implementing the optimal assignment would increase tax compliance by 2.94 percentage points and revenue by 26% relative to the status quo (random) assignment. Alternative policies, such as replacing low-ability collectors with new ones of average ability or increasing collectors’ performance wages, are likely incapable of achieving a similar revenue increase. |
| JEL: | D73 H11 H20 M50 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30413&r= |
| By: | Francesc Dilmé (University of Bonn); Daniel Garrett (University of Essex) |
| Abstract: | Work on relational employment agreements often predicts low payments or termination for poor performance. The possibility of saving can, however, limit the e˙ectiveness of mone-tary incentives in motivating an employee with diminishing marginal utility for consump-tion. We study the role of savings and their observability in optimal relational contracts. We focus on the case where players are not too patient, and hence the constant first-best e˙ort cannot be implemented. If savings are hidden, the relationship eventually deterio-rates over time. In particular, both payments and e˙ort decline. On the other hand, if savings are public, consumption is initially high, so the agent’s savings fall over time, and e˙ort and payments to the agent increase. The findings thus suggest how tacit agreements on consumption can forestall the deterioration of dynamic relationships in which the agent can save. |
| Keywords: | relational contracts, consumption smoothing preferences, private savings |
| JEL: | C73 J30 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:192&r= |
| By: | Andrew Caplin (New York University and NBER); Minjoon Lee (Carleton University); Søren Leth-Petersen (University of Copenhagen); Johan Sæverud (University of Copenhagen); Matthew D. Shapiro (University of Michigan and NBER) |
| Abstract: | How worker productivity evolves with tenure and experience is central to economics, shaping, for example, life-cycle earnings and the losses from involuntary job separation. Yet, worker-level productivity is hard to identify from observational data. This paper introduces direct measurement of worker productivity in a firm survey designed to separate the role of on-the-job tenure from total experience in determining productivity growth. Several findings emerge concerning the initial period on the job. (1) On-the-job productivity growth exceeds wage growth, consistent with wages not being allocative period-by-period. (2) Previous experience is a substitute, but a far less than perfect one, for on-the-job tenure. (3) There is substantial heterogeneity across jobs in the extent to which previous experience substitutes for tenure. The survey makes use of administrative data to construct a representative sample of firms, check for selective non-response, validate survey measures with administrative measures, and calibrate parameters not measured in the survey. |
| Keywords: | Productivity, Wages, Tenure, Experience, Firm survey |
| JEL: | E24 J24 J30 |
| Date: | 2022–09–11 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kucebi:2211&r= |
| By: | Rachel Scarfe (School of Economics, University of Edinburgh); Carl Singleton (Department of Economics, University of Reading); Adesola Sunmoni (Department of Economics, University of Reading); Paul Telemo (School of Economics, University of Edinburgh) |
| Abstract: | There is an inverted u-shaped relationship between age and wages in most labour markets and occupations, but the effects of age on productivity are less clear. We use panel data on the productivity and salaries of all elite professional footballers (soccer players) in North America to estimate age-productivity and age-wage profiles, which control for unobserved player characteristics and for entry and exit from this market, finding stark differences. While the productivity of footballers tends to peak in their early to mid-20s and then falls slowly, wages continue to increase throughout most of their careers, up to age 30, after which they fall rapidly. This discrepancy has been observed in other labour markets and poses the question: why are the youngest and oldest workers seemingly underpaid relative to their productivity? We consider a number of possible mechanisms that could be responsible without finding a clear culprit. |
| Keywords: | Labour productivity, Wages, Aging, Major League Soccer |
| JEL: | J23 J24 J31 J41 Z22 |
| Date: | 2022–09–09 |
| URL: | http://d.repec.org/n?u=RePEc:rdg:emxxdp:em-dp2022-07&r= |
| By: | Mario Lackner; Hendrik Sonnabend (University of Hagen) |
| Abstract: | We use data from top-level soccer to examine determinants of individual misbehaviour in team contests. Our estimates indicate a significant positive and non-linear relationship between a player’s age and (relative) ability on the one hand and the tendency to misbehave on the other. These findings are consistent with Social Learning Theory in that the group of high-status players may has learned that the consequences of misconduct are low and manageable. Furthermore, we demonstrate that misbehaviour is costly to both the players and their teams. |
| Keywords: | misconduct, contests, status, soccer |
| JEL: | J32 J24 K42 L83 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:jku:econwp:2022-11&r= |