nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2022‒12‒05
eight papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Subjective Performance Evaluation, Influence Activities, and Bureaucratic Work Behavior: Evidence from China By Alain de Janvry; Guojun He; Elisabeth Sadoulet; Shaoda Wang; Qiong Zhang
  2. Trading Away Incentives By Stefano Colonnello; Giuliano Curatola; Shuo Xia
  3. Management and Performance in the Public Sector: Evidence from German Municipalities By Englmaier, Florian; Muehlheusser, Gerd; Roider, Andreas; Wallmeier, Niklas
  4. The Selection Effects of Part-Time Work: Experimental Evidence from a Large-Scale Recruitment Drive By Hyuncheol Bryant Kim; Hyunseob Kim; John Zhu
  5. The Effect of Performance Pay Incentives on Market Frictions: Evidence from Medicare By Atul Gupta; Guy David; Lucy (Kunhee) Kim
  6. Workplace Presenteeism, Job Substitutability and Gender Inequality By Ghazala Azmat; Lena Hensvik; Olof Rosenqvist
  7. National Wage Setting By Jonathon Hazell; Christina Patterson; Heather Sarsons; Bledi Taska
  8. Organized Labour and R&D: Evidence from Italy By Cetrulo, Armanda; Cirillo, Valeria; Landini, Fabio

  1. By: Alain de Janvry; Guojun He; Elisabeth Sadoulet; Shaoda Wang; Qiong Zhang
    Abstract: Subjective performance evaluation is widely used by firms and governments to provide work incentives. However, delegating evaluation power to local leadership could induce influence activities: employees might devote too much effort to impressing/pleasing their evaluator, relative to working toward the goals of the organization itself. We conduct a large-scale randomized field experiment among Chinese local civil servants to study the existence and implications of influence activities. We find that civil servants do engage in evaluator-specific influence to affect evaluation outcomes, partly in the form of reallocating work efforts toward job tasks that are more important and observable to the evaluator. Importantly, we show that introducing uncertainty about the evaluator’s identity discourages evaluator-specific influence activities and improves bureaucratic work performance.
    JEL: D73 M12
    Date: 2022–11
  2. By: Stefano Colonnello (Department of Economics, University Of Venice CÃ Foscari; Halle Institute for Economic Research (IWH)); Giuliano Curatola (University of Siena); Shuo Xia (Leipzig University; Halle Institute for Economic Research (IWH))
    Abstract: Equity pay has been the primary component of managerial compensation packages at US public firms since the early 1990s. Using a comprehensive sample of top executives from 1992-2020, we estimate to what extent they trade firm equity held in their portfolios to neutralize increments in ownership due to annual equity pay. Executives accommodate ownership increases linked to options awards. Conversely, increases in stock holdings linked to option exercises and restricted stock grants are to a large extent neutralized through comparable sales of unrestricted shares. Variation in stock trading responses across executives hardly appears to respond to diversification motives. From a theoretical standpoint, these results challenge (i) the common, generally implicit assumption that managers cannot undo their incentive packages, (ii) the standard modeling practice of treating different equity pay items homogeneously, and (iii) the often taken for granted crucial role of diversification motives in managers’ portfolio choices.
    Keywords: Executive Compensation, Equity Incentives, Insider Trading, Hedging, Dynamic Contracting
    JEL: G32 G34 J33 M12 M52
    Date: 2022
  3. By: Englmaier, Florian (University of Munich); Muehlheusser, Gerd (University of Hamburg); Roider, Andreas (University of Regensburg); Wallmeier, Niklas (University of Hamburg)
    Abstract: We study management practices and performance of public sector organizations in Germany. For a representative sample of municipalities, we provide survey evidence for substantial heterogeneity in the use of structured management practices. This heterogeneity is not driven by differences across states, regional types, or population size. Moreover, we document a systematic positive relationship between the degree of structured management and a diverse set of performance measures capturing municipalities' attractiveness for citizens and firms. Topic modelling (LDA) of survey responses suggests that management styles differ indeed in the extent of structured management, with many municipalities displaying relatively little of it.
    Keywords: management practices, public sector organizations, local government, municipal performance, World Management Survey (WMS)
    JEL: D20 D73 H11 H73 R50
    Date: 2022–10
  4. By: Hyuncheol Bryant Kim; Hyunseob Kim; John Zhu
    Abstract: We implement a field experiment to examine how part-time work attracts applicants with different quality and productivity levels than full-time work. In a large-scale recruitment drive for a data-entry position in Ethiopia, either a part-time or full-time job opportunity was randomly offered across villages. We find that the part-time work attracts a less qualified pool of applicants with a stronger preference for short work hours, who in turn exhibit lower productivity, all relative to the full-time work. Our preferred estimates show that this selection effect on productivity may explain up to half of the typical part-time wage penalty. A simple conceptual framework demonstrates that a lack of high quality potential applicants with a strong preference for short work hours could explain the experimental evidence. The results have implications for the selection effects of alternative work arrangements and for the gender pay gap.
    Keywords: part-time work; alternative work arrangements; self-selection bias; labor productivity; wage-hour relation
    JEL: J22 J24 O15 M51
    Date: 2022–10–25
  5. By: Atul Gupta; Guy David; Lucy (Kunhee) Kim
    Abstract: Medicare has increased the use of performance pay incentives for hospitals, with the goal of increasing care coordination across providers, reducing market frictions, and ultimately to improve quality of care. This paper provides new empirical evidence by using novel operations and claims data from a large, independent home health care firm with the Hospital Readmissions Reduction Program (HRRP) penalty on hospitals providing identifying variation. We find that the penalty incentive to reduce re-hospitalizations passed through from hospitals to the firm at least for some types of patients, since it provided more care inputs for heart disease patients discharged from hospitals at greater penalty risk and that contributed more patients to the firm. This evidence suggests that HRRP helped increase coordination between hospitals and home health firms without formal integration. Greater home health effort does not appear to have led to lower patient readmissions.
    JEL: I11 I13 I18
    Date: 2022–11
  6. By: Ghazala Azmat (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEP - LSE - Centre for Economic Performance - LSE - London School of Economics and Political Science); Lena Hensvik (Uppsala University); Olof Rosenqvist (IFAU - The Institute for Evaluation of Labour Market and Education Policy)
    Abstract: Following the arrival of the first child, women's absence rates soar and become less predictable. This fall in workplace presenteeism harms women's wages, especially in jobs with low substitutability. Although both presenteeism and job uniqueness are rewarded, we document that women's likelihood of holding jobs with low substitutability decreases relative to men's after childbearing. This gap persists, with important long-run wage implications. We highlight that the parenthood wage penalty for women could be reduced by organizing work so that more employees have tasks that can be performed satisfactorily by other employees in the workplace.
    Keywords: Work absence,Job substitutability,Gender wage inequality
    Date: 2021–11
  7. By: Jonathon Hazell; Christina Patterson; Heather Sarsons; Bledi Taska
    Abstract: How do firms set wages across space? Using job-level vacancy data and a survey of HR managers, we show that 40-50% of a job’s posted wages are identical across locations within a firm. Moreover, nominal posted wages within the firm vary relatively little with local prices, a pattern we verify with other measures of job level wages. Using the co-movement of wage growth across establishments, we argue these patterns reflect national wage setting---a significant minority of firms choose to set the same nominal wage for a job across all their establishments, despite varying local labor market conditions.
    JEL: J3 J31
    Date: 2022–11
  8. By: Cetrulo, Armanda; Cirillo, Valeria; Landini, Fabio
    Abstract: This paper investigates the impact of firm-level collective bargaining on firms' investment in intangible assets and, specifically R&D. While standard hold-up theories predict a negative effect of organized labour on intangible investments, the inclusion of pay-for-performance schemes in complementary negotiation can actually invert the prediction. Moreover, the industrial relation literature suggests that, in presence of asymmetric power relations, firm-level collective bargaining can allow workers to make their voice heard and induce management to invest in assets that drive competition away from wages, including R&D. We exploit a rich and representative survey on Italian non-agricultural companies conducted by the National Institute for the Analysis of Public Policies (INAPP) to test these predictions. Baseline estimates suggest that the presence of second-level collective bargaining is associated with higher investments in R&D and that power relation is the main mechanism driving this result. These findings are confirmed also in a robustness check where we exploit size contingent legislation governing the creation of employee representative bodies involved in firm-level bargaining in a regression discontinuity design (RDD) framework. The implications for the design of innovation policy are discussed.
    Keywords: R&D,Intangibles,Unions,Collective Bargaining,Complementary Negotiation
    JEL: J50 O32 O33
    Date: 2022

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