nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2023‒05‒22
seven papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Monetary Rewards, Hierarchy Level and Working Hours as Drivers of Employees' Self-Evaluations By Grund, Christian; Soboll, Alexandra
  2. Designing incentives and performance measurement for advisors: How to make decision-makers listen to advice By Robert M. Gillenkirch; Julia Ortner; Sebastian Robert; Louis Velthuis
  3. Longer careers: A barrier to hiring and coworker advancement? By Irene Ferrari; Jan Kabátek; Todd Morris
  4. Layoffs and Productivity at a Bangladeshi Sweater Factory By Robert Akerlof; Anik Ashraf; Rocco Macchiavello; Atonu Rabbani
  5. Generative AI at Work By Erik Brynjolfsson; Danielle Li; Lindsey R. Raymond
  6. Management and Human Capital Employment: an overlooked Relationship By Marcelo Serra Santos; Susana Garrido Azevedo; Tiago Miguel Guterres Neves Sequeira
  7. Vacancy Chains By Michael Elsby; Axel Gottfries; Ryan Michaels; David Ratner

  1. By: Grund, Christian (RWTH Aachen University); Soboll, Alexandra (RWTH Aachen University)
    Abstract: In this study, we explore the relation between job characteristics and employees' self-evaluations of performance in comparison to their colleagues' performance. Making use of unique individual panel data of ten large firms in Germany's chemical industry, we focus on monetary rewards (bonus payments and wage increases), level of hierarchy and weekly working hours as well as interactions with gender and tenure as possible drivers of self-evaluations. Our results hint for particular relevance of working hours, and some extent of hierarchy levels and monetary rewards. We find less evidence for our hypotheses regarding interaction effects of gender and tenure.
    Keywords: self-evaluations, bonus payments, wage increases, level of hierarchy, working hours
    JEL: J3 M5
    Date: 2023–03
  2. By: Robert M. Gillenkirch (University of Osnabrueck); Julia Ortner (Johannes Gutenberg University Mainz); Sebastian Robert (Rosenheim University of Applied Sciences); Louis Velthuis (Johannes Gutenberg University Mainz)
    Abstract: In a sequence of experiments, this study investigates how the design of an advisor’s performance-dependent pay affects a decision-maker’s reliance on advice. In all experiments, the decision-maker forms an initial judgment, receives advice and then makes a final judgment. The advisor’s compensation is manipulated to be fixed, based on individual performance, or based on group performance. We find that performancedependent pay does not affect the decision-maker’s reliance on advice unless performance measurement relates to group performance. Path model analyses show that the advisor’s performance measurement affects the decision-maker’s perceptions of responsibility and power, and that responsibility is the main driver of the decision-maker’s cooperativeness, which mediates the relationship between performance measurement and reliance on advice. In contrast, a decision-maker’s beliefs in the incentive effects of financial compensation on the quality of advice do not drive the results.
    Keywords: performance measurement, incentive design, reliance on advice; goal relatedness, incentives beliefs
    JEL: D83 D91 M52
    Date: 2023–05–03
  3. By: Irene Ferrari; Jan Kabátek; Todd Morris
    Abstract: Government policies are encouraging older workers to delay retirement, which may curb younger workers’ career advancement. We study a Dutch reform that raised the retirement age by 13 months and nearly tripled employment at age 66. Using monthly linked employer-employee data, we show that affected firms delay and decrease replacement hiring, and coworkers’ earnings fall via reductions in hours worked, wages, and promotions. Combined, the hiring and coworker spillovers offset most of the additional hours worked by older workers, disproportionately affect career advancement for younger workers and women, and considerably increase the policy’s ratio of welfare costs to fiscal savings.
    Keywords: retirement reform; labor demand; internal labor markets; firms; coworker spillovers
    JEL: H55 J23 J26 J63
    Date: 2023
  4. By: Robert Akerlof (University of Warwick); Anik Ashraf (LMU Munich); Rocco Macchiavello (London School of Economics and Political Science); Atonu Rabbani (University of Dhaka)
    Abstract: Conflicts between management and workers are common and can have significant impacts on productivity. Combining ethnographic, survey and administrative records from a large Bangladeshi sweater factory, we study how workers responded to management’s decision to lay off about a quarter of the workers following a period of labor unrest. Our main finding is that the mass layoff resulted in a large and persistent reduction in the productivity of surviving workers. Moreover, it is specifically the firing of peers with whom workers likely had social connections - friends - that matters. Additional evidence on defect rates suggests a deliberate shading of performance by workers in order to punish the factory’s management.
    Keywords: layoffs; productivity; morale; relational contracts;
    JEL: J50 M50 O12
    Date: 2023–05–07
  5. By: Erik Brynjolfsson; Danielle Li; Lindsey R. Raymond
    Abstract: We study the staggered introduction of a generative AI-based conversational assistant using data from 5, 179 customer support agents. Access to the tool increases productivity, as measured by issues resolved per hour, by 14 percent on average, with the greatest impact on novice and low-skilled workers, and minimal impact on experienced and highly skilled workers. We provide suggestive evidence that the AI model disseminates the potentially tacit knowledge of more able workers and helps newer workers move down the experience curve. In addition, we show that AI assistance improves customer sentiment, reduces requests for managerial intervention, and improves employee retention.
    JEL: D8 J24 M15 M51 O33
    Date: 2023–04
  6. By: Marcelo Serra Santos (CeBER); Susana Garrido Azevedo (Univ of Coimbra, CeBER, Faculty of Economics); Tiago Miguel Guterres Neves Sequeira (University of Coimbra, Centre for Business and Economics, CeBER and Faculty of Economics)
    Abstract: We look at data for Management and Skills demand of firms in existing databases and we highlight the strong positive relationship between both variables. We devise a model that explains this relationship and calibrate it in order to present quantitative results and compare those results with the estimated ones. We discover that a simple model with Management as Technology can replicate well the estimated influence of Management in the skills demand of firms. We also present evidence of the influence of the subitems of Management on skills’ demand and discovered that aside from the talent component of Management, target and performance components greatly influence the demand for skills.
    Keywords: management practices, productivity, human capital
    Date: 2023–01
  7. By: Michael Elsby; Axel Gottfries; Ryan Michaels; David Ratner
    Abstract: Replacement hiring—recruitment that seeks to replace positions vacated by workers who quit—plays a central role in establishment dynamics. We document this phenomenon using rich microdata on U.S. establishments, which frequently report no net change in their employment, often for years at a time, despite facing substantial gross turnover in the form of quits. We devise a tractable model in which replacement hiring is driven by a novel structure of frictions, combining firm dynamics, on-the-job search, and investments into job creation that are sunk at the point of replacement. A key implication is the emergence of vacancy chains. Quantitatively, the model reconciles the incidence of replacement hiring with the large dispersion of labor productivity across establishments, and largely replicates the empirical volatility and persistence of job creation and, thereby, unemployment.
    Keywords: Quits; replacement hiring; unemployment; vacancies; business cycles
    JEL: E32 J63 J64 J60
    Date: 2022–08–19

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