nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2022‒10‒31
eight papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Rank vs Money: Evidence from Managers By Raymond, C.; Shvets, J.
  2. Aversion to hiring algorithms: Transparency, gender profiling, and self-confidence By Dargnies, Marie-Pierre; Hakimov, Rustamdjan; Kübler, Dorothea
  3. Heterogeneous Effects of Monetary and Non-Monetary Job Characteristics on Job Attractiveness in Nursing By Martin Kroczek; Philipp Kugler
  4. Organisational Leadership: How Much Does It Matter? By Haile, Getinet Astatike
  5. Bad Times, Bad Jobs? How Recessions Affect Early Career Trajectories By Parag Mahajan; Dhiren Patki; Heiko Stüber
  6. Earnings Dynamics, Inequality and Firm Heterogeneity By Paul Bingley; Lorenzo Cappellari
  7. Technical Change, Task Allocation, and Labor Unions By Marczak, Martyna; Beissinger, Thomas; Brall, Franziska
  8. Feedback, Gender, and Choking under Pressure: Evidence from Alpine Skiing By Christoph Buehren; Martin Gschwend; Alex Krumer

  1. By: Raymond, C.; Shvets, J.
    Abstract: We study the existence and relative importance of status concerns compared to financial incentives among managers in a large firm where the bonus is determined through a high powered tournament. Using detailed data about both performance and labour input decisions, we consider managers' response to feedback about their rank as well as monetary bonuses. We find that managers exhibit rank concerns that are distinct from, but co-exist with, financial performance incentives. These rank concerns are important: moving from the bottom to the top of the firm's ranking is worth up to $4,500 a year to the average manager, or 48% of their annual performance bonus. Moreover, managers exhibit desire to catch up (i.e., utility is concave in rank): when managers get a bad rank they respond by improving performance, rather than getting discouraged. Our data allow us to identify these effects using both outputs (performance) as well as inputs (staffing decisions) of the managers.
    Keywords: Status, Incentives, Relative performance, Intrinsic motivation
    JEL: D83 J22 J33 M12 M52
    Date: 2022–10–13
  2. By: Dargnies, Marie-Pierre; Hakimov, Rustamdjan; Kübler, Dorothea
    Abstract: We run an online experiment to study the origins of algorithm aversion. Participants are either in the role of workers or of managers. Workers perform three real-effort tasks: task 1, task 2, and the job task which is a combination of tasks 1 and 2. They choose whether the hiring decision between themselves and another worker is made either by a participant in the role of a manager or by an algorithm. In a second set of experiments, managers choose whether they want to delegate their hiring decisions to the algorithm. In the baseline treatments, we observe that workers choose the manager more often than the algorithm, and managers also prefer to make the hiring decisions themselves rather than delegate them to the algorithm. When the algorithm does not use workers' gender to predict their job task performance and workers know this, they choose the algorithm more often. Providing details on how the algorithm works does not increase the preference for the algorithm, neither for workers nor for managers. Providing feedback to managers about their performance in hiring the best workers increases their preference for the algorithm, as managers are, on average, overconfident
    Keywords: algorithm aversion,experiment,hiring discrimination,transparency
    JEL: D91 J71 C9
    Date: 2022
  3. By: Martin Kroczek; Philipp Kugler
    Abstract: We apply a novel methodological approach described by Chernozhukov, Fern´andez-Val & Luo (2018), to analyze preference heterogeneity regarding non-monetary job characteristics and trade-offs between wage and non-monetary job characteristics. Using this approach, we can describe preference heterogeneity more concise than with subgroup analysis. Analyzing data from a selfconducted factorial survey experiment on nurses, we find significant effect heterogeneity regarding the single job characteristics and the trade-offs between wage and non-monetary job characteristics. We also find positive interaction effects between wage and other job characteristics. We further analyze which factors are associated with effect heterogeneity. Working hours and gender appear to be the main drivers of these effects. We also find differences regarding the sources of a nurse’s motivation to initially choose the nursing occupation. Differentiation of job characteristics (job offers) to fit different preferences can therefore be a more effective and efficient way to attract workers than a “one size fits all” solution. Regarding nursing jobs, there is some evidence for such differentiation.
    Keywords: labor supply; wage; non-monetary job characteristics; heterogeneity analysis; nurses
    JEL: J22 J31 J32 I11
    Date: 2022–09–26
  4. By: Haile, Getinet Astatike (University of Nottingham)
    Abstract: We study the influence of leadership on organisational performance and worker wellbeing using data from the 2004 and 2011 Workplace Employment Relations Survey (WERS). Our most conservative estimates from fixed effects regressions on a panel of organisations reveal that virtuous leadership is significantly and positively linked to an upbeat assessment of organisational performance, and an increase in worker wellbeing. Specifically, the estimates reveal that an increase in leadership quality by one standard deviation increases organisational performance and worker job satisfaction by 0.27 and 0.73 standard deviations, respectively, while it leads to a fall in worker job anxiety by 0.13 standard deviations. The results support the hypothesis that good leadership is vital for the success of business including worker wellbeing, which organisational policy makers ought to heed. There is a dearth of evidence on organisational leadership as an institution and its influence on organisational outcomes, which this paper aims to address.
    Keywords: leadership, organisational performance, worker wellbeing, linked data, Britain
    JEL: I31 J28 J5 L2 M5
    Date: 2022–09
  5. By: Parag Mahajan; Dhiren Patki; Heiko Stüber
    Abstract: Workers who enter the labor market during recessions experience lasting earnings losses, but the role of non-pay amenities in either exacerbating or counteracting these losses remains unknown. Using population-scale data from Germany, we find that labor market entry during recessions generates a 6 percent reduction in earnings cumulated over the first 15 years of experience. Implementing a revealed-preference estimator of employer quality that aggregates information from the universe of worker moves across employers, we find that one-quarter of recession-induced earnings losses are compensated for by non-pay amenities. Purely pecuniary estimates can therefore overstate the welfare costs of labor market entry during recessions.
    Keywords: earnings inequality; recessions; non-pay amenities
    JEL: E32 J24 J31 J32
    Date: 2022–10–01
  6. By: Paul Bingley; Lorenzo Cappellari
    Abstract: Studies of individual earnings dynamics typically ignore firm heterogeneity, whereas worker and firm decompositions of earnings inequality abstract from the life-cycle. We study firm effects in individual earnings dynamics for the Italian private sector population, leveraging the covariance structure of co-workers earnings for identification. Our model allows for dynamics of both worker and firm effects, worker-firm sorting, worker segregation and correlation of firm effects among connected firms. While firms explain most of the earnings inequality when workers are young, workers explain most over the life cycle. Sorting of workers across firms is substantial, especially for younger workers. Standard earnings dynamics models overstate the relevance of individual heterogeneity.
    Keywords: earnings inequality; earnings dynamics; co-workers' covariance
    JEL: J24 J31
    Date: 2022–10
  7. By: Marczak, Martyna; Beissinger, Thomas; Brall, Franziska
    Abstract: We propose a novel framework that integrates the "task approach" for a more precise production modeling into the search-and-matching model with low- and high-skilled workers, and wage setting by labor unions. We establish the relationship between task reallocation and changes in wage pressure, and examine how skill- biased technical change (SBTC) affects the task composition, wages of both skill groups, and unemployment. In contrast to the canonical model with a fixed task allocation, low-skilled workers may be harmed in terms of either lower wages or higher unemployment depending on the relative task-related productivity profile of both worker types. We calibrate the model to the US and German data for the periods 1995-2005 and 2010-2017. The simulated effects of SBTC on low-skilled unemployment are largely consistent with observed developments. For example, US low-skilled unemployment increases due to SBTC in the earlier period and decreases after 2010.
    Keywords: task approach,search and matching,labor unions,skill-biased technical change,labor demand,wage setting
    JEL: J64 J51 E23 E24 O33
    Date: 2022
  8. By: Christoph Buehren (Ruhr-University Bochum); Martin Gschwend (University of St. Gallen); Alex Krumer (Molde University College)
    Abstract: In alpine skiing competitions, one of the coaches of the participating countries sets the course. This may provide an advantage, but it may also exert higher pressure on the racers. We analyze 40,150 men’s and 36,968 women’s performances from all competitions in alpine skiing’s Slalom, Giant Slalom, and Super Giant disciplines that took place in the World Cups, World Championships, and Olympic Games between the 2001-02 and 2017-2018 seasons. We compare the performance of racers when competing on a course that was set by their compatriot to the performance of the same racers in the same season when the course was set by a coach from another country. Having a compatriot course setter only has an effect in the second (and decisive) run of the most technical discipline Slalom. We find that men fail significantly more often to complete their run when their compatriots set the course, whereas women fail significantly less in the same situation. The most likely drivers of our results relate to gender differences in response to feedback and choking under pressure in skill-based tasks.
    Keywords: Alpine skiing; choking under pressure; gender differences; panel data
    JEL: C33 C93 D91 J16 J24 Z20
    Date: 2022

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