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on Human Capital and Human Resource Management |
| By: | Marco Fongoni (École d'Économie d'Aix-Marseille, Aix-Marseille Université); Daniel Schaefer (Institut für Volkswirtschaftslehre, Johannes-Kepler-Universität Linz); Carl Singleton (Department of Economics, University of Reading) |
| Abstract: | We develop a model of incomplete employment contracts such that employees have some discretion over effort, which depends on their work morale. Nominal wage cuts have a strong negative effect on morale, while employee involvement in workplace decision-making tends to increase morale. We derive predictions on how these two mechanisms affect the decisions of firms to cut nominal wages. Using matched employer-employee and manager survey data from Great Britain, we find support for our model: nominal wage cuts are only half as likely when managers think that employees have some discretion over how they perform their work, but this reduced likelihood recovers partially when employees are involved in the decision-making process at their workplace. |
| Keywords: | Wage rigidity, Reciprocity, Workplace relations, Employer-employee data |
| JEL: | E24 E70 J31 J41 |
| Date: | 2023–01–30 |
| URL: | http://d.repec.org/n?u=RePEc:rdg:emxxdp:em-dp2023-03&r=hrm |
| By: | Bloom, Nicholas; Kawakubo, Taka; Meng, Charlotte; Mizen, Paul; Riley, Rebecca; Senga, Tatsuro; Van Reenen, John |
| Abstract: | We link a new UK management survey covering 8, 000 firms to panel data on productivity in manufacturing and services. There is a large variation in management practices, which are highly correlated with productivity, profitability and size. Uniquely, the survey collects firms' micro forecasts of their own sales and also macro forecasts of GDP. We find that better managed firms make more accurate micro and macro forecasts, even after controlling for their size, age, industry and many other factors. We also show better managed firms appear aware that their forecasts are more accurate, with lower subjective uncertainty around central values. These stylized facts suggest that one reason for the superior performance of better managed firms is that they knowingly make more accurate forecasts, enabling them to make superior operational and strategic choices. |
| Keywords: | management; productivity; expectations; forecasting; ES/S012729/2 |
| JEL: | L20 M20 O32 O33 |
| Date: | 2022–01–05 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:117748&r=hrm |
| By: | Moritz Kuhn; Jinfeng Luo; Iourii Manovskii; Xincheng Qiu |
| Abstract: | The production processes at many firms rely on a highly choreographed and interdependent network of workers performing specialized jobs. We designed and implemented a targeted employer survey to measure the extent of coordination in work processes. We link this firm-level coordination measure to administrative data and find that firms with a more coordinated work process are more productive, pay higher wages, and experience lower worker turnover. Yet, these firms suffer more severe negative consequences from worker absences and adopt various strategies to mitigate such risk, the reliance on which we document. While the standard unemployment insurance policy pays benefits to workers who lose their jobs, the short-time work policy widely adopted in Germany compensates workers who remain employed with reduced hours for the associated loss of earnings. This policy can benefit employers with a more coordinated production process because they can lower the scale of production by reducing hours while keeping all workers needed for the production process employed, increasing the resilience of these employers to large idiosyncratic and aggregate shocks |
| Keywords: | Labor markets, Coordination, Economic resilience, Work process, Covid-19 |
| JEL: | E23 E24 J24 J65 |
| Date: | 2022–11 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2022_373&r=hrm |
| By: | Daniel Goller; Maximilian Sp\"ath |
| Abstract: | We analyze the causal impact of positive and negative feedback on professional performance. We exploit a unique data source in which quasi-random, naturally occurring variations within subjective ratings serve as positive and negative feedback. The analysis shows that receiving positive feedback has a favorable impact on subsequent performance, while negative feedback does not have an effect. These main results are found in two different environments and for distinct cultural backgrounds, experiences, and gender of the feedback recipients. The findings imply that managers should focus on giving positive motivational feedback. |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2301.11776&r=hrm |
| By: | Paul A. Gompers; Steven N. Kaplan; Vladimir Mukharlyamov |
| Abstract: | Most research on the CEO labor market studies public company CEOs while largely ignoring CEOs in private equity (PE) funded companies. We fill this gap by studying the market for CEOs among U.S. companies purchased by PE firms in large leveraged buyout transactions. 71% of those companies hired new CEOs under PE ownership. More than 75% of the new CEOs are external hires with 67% being complete outsiders. These results are strikingly different from studies of public companies, particularly, Cziraki and Jenter (2022) who find that 72% of new CEOs in S&P 500 companies are internal promotions. The most recent experience of 67% of the outside CEOs was at a public company with almost 50% of external hires having some previous experience at an S&P 500 firm. We estimate the total compensation of buyout CEOs and find that it is much higher than that of CEOs of similarly sized public companies and slightly lower than that of S&P 500 CEOs. Overall, our results suggest that the broader market for CEOs is active and that, at least for PE funded portfolio companies, firm-specific human capital is relatively unimportant. |
| JEL: | G24 G3 G32 J30 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30899&r=hrm |