nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2023‒06‒19
eight papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Incentivizing Team Leaders: A Firm-Level Experiment on Subjective Performance Evaluation of Leadership Skills By Gall, Thomas; Hu, Xiaocheng; Vlassopoulos, Michael
  2. CEO compensation: evidence from the field By Edmans, Alex; Gosling, Tom; Jenter, Dirk
  3. Longer Careers: A Barrier to Hiring and Coworker Advancement? By Ferrari, Irene; Kabátek, Jan; Morris, Todd Stuart
  4. Gender Preferences in Job Vacancies and Workplace Gender Diversity By David Card; Fabrizio Colella; Rafael Lalive
  5. Relational Skills and Corporate Productivity in a Comparative Size Class Perspective By Leonardo Becchetti; Sara Mancini; Nazaria Solferino
  6. The price of flexible jobs: Wage differentials between permanent and flexible jobs in The Netherlands By Cindy Biesenbeek; Maikel Volkerink
  7. Does speculative news hurt productivity? Evidence from takeover rumors By Andres, Christian; Bazhutov, Dmitry; Cumming, Douglas J.; Limbach, Peter
  8. Committee Deliberation and Gender Differences in Influence By Jonas Radbruch; Amelie Schiprowski

  1. By: Gall, Thomas (University of Southampton); Hu, Xiaocheng (University of Exeter); Vlassopoulos, Michael (University of Southampton)
    Abstract: In teamwork settings, providing effective leadership can be challenging for team leaders due to multitasking and the difficulty in measuring and rewarding leadership input. These challenges might lead to underprovision of leadership activities, which can ultimately impede the productivity of the team. To address this problem, we conduct a field experiment at a manufacturing firm, introducing a relative subjective performance evaluation of team leaders' leadership activities by their managers, coupled with bonuses based on their leadership rank among all leaders. Our intervention increased worker productivity by approximately 7%, while leaving team leaders' productivity unchanged, and was profitable for the firm. During the intervention, we observe a positive correlation between the evaluations of team leaders and the productivity of team members, suggesting that the subjective evaluation indeed increased leadership activities and thus productivity.
    Keywords: multitasking, subjective evaluation, teamwork, incentive schemes, productivity, leadership
    JEL: J24 J33 M52 C93
    Date: 2023–05
  2. By: Edmans, Alex; Gosling, Tom; Jenter, Dirk
    Abstract: We survey directors and investors on the objectives, constraints, and determinants of CEO pay. 67% of directors would sacrifice shareholder value to avoid controversy on CEO pay, implying they face significant constraints other than participation and incentive compatibility. These constraints lead to lower pay levels and more one-size-fits-all structures. Shareholders are the main source of constraints, suggesting directors and investors disagree on how to maximize value. Respondents view intrinsic motivation and reputation as stronger motivators than incentive pay. They believe pay matters to CEOs not to finance consumption, but because it affects perceptions of fairness. The need to fairly recognize the CEO's contribution explains why flow pay responds to performance, even though CEOs' equity holdings already provide substantial consumption incentives, and why peer firm pay matters beyond retention concerns. Fairness also matters to investors, with shareholder returns an important reference point. This causes CEO pay to be affected by external risks, in contrast to optimal risk sharing.
    Keywords: executive compensation; contract theory; CEO incentives; fairness; survey
    JEL: G34 G38 M12 M52
    Date: 2021–06–30
  3. By: Ferrari, Irene (Ca' Foscari University of Venice); Kabátek, Jan (University of Melbourne); Morris, Todd Stuart (ARC Centre of Excellence in Population Ageing Research (CEPAR))
    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: 2023–04
  4. By: David Card (University of California, Berkeley); Fabrizio Colella (Università della Svizzera italiana); Rafael Lalive (University of Lausanne)
    Abstract: In spring 2005, the Ombud for Equal Treatment in Austria launched a campaign notifying employers and newspapers that gender preferences in job ads were illegal. At the time over 40% of vacancies on the nation’s largest job board stated a gender preference; within a year the rate fell below 5%. We merge job board vacancies and employer records to study how the campaign affected hiring choices and the gender diversity of occupations and workplaces. Using pre-campaign data, we predict the use of gender preferences, then conduct a difference-indifferences analysis of hiring outcomes for vacancies with predicted male or female preferences, relative to those with no predicted preferences. The elimination of explicit gender preferences boosted the share of women hired for jobs that were likely to be targeted to men (and vice versa). At the firm level, we find that the campaign led to a rise in the share of women at firms that were more likely to use male SGP’s, and a symmetric increase in the share of men at firms that were likely to use female SGP’s, with no effects on firm survival, employment, or average wages.
    Keywords: Gender Preferences, Gender Segregation, Anti-discrimination Policy
    JEL: J16 J68 J63
    Date: 2023–05
  5. By: Leonardo Becchetti (CEIS & DEF, University of Rome "Tor Vergata"); Sara Mancini (University of Rome "Tor Vergata"); Nazaria Solferino (Università della Calabria)
    Abstract: Based on results from the different fields of the game theoretic literature on strategic interactions and social dilemmas, gift exchange and procedural utility, we argue that corporate social responsibility and relational skills i) with other firms; ii) between employers and workers iii) among workers and iv) with stakeholders are associated to positive effects on productivity. We test our research hypothesis in a comparative perspective on small, medium and large sized Italian firms. We find that size matters when investigating the impact of relational skills on added value per worker after controlling for relevant concurring factors. The identified significant skill related components are: i) corporate policies considering strategic workers’ wellbeing; ii) team working attitudes considered as priority soft skills when hiring workers; iii) initiatives in favour of the productive network operating in the same local area; iv) involvement of stakeholders in CSR projects. Our findings show that the fourth component (stakeholder involvement) is positive and significant for all (small, medium and large) size classes, while the first (workers wellbeing) for small and medium firms, the second (team working) applies mainly to medium firms, and the third (initiative for the local productive network) to medium and large firms. Instrumental variable estimates on the relational skill principal component suggest that a causality link exists beyond these significant correlations. Our conclusion is that scale has an inverse U-shaped effect on the impact of team skills, weakens the impact of gift exchange mechanisms, while it reinforces those of investment in the local productive environment on added value per worker
    Keywords: social dilemma, gift exchange, procedural utility, corporate social responsibility, corporate size
    Date: 2023–05–29
  6. By: Cindy Biesenbeek; Maikel Volkerink
    Abstract: Employees with a flexible contract, i.e., those with either a temporary contract, temporary agency workers, or those on a contract with flexible working hours, face more job and income insecurity than employees with a permanent contract. In competitive labor markets, they should be compensated for this uncertainty. In most countries, however, wages of flexible jobs are lower than those of permanent jobs. We find that this is also the case for The Netherlands between 2006 and 2019, in particular for men and higher educated employees. A critique on wage comparisons is that sample selection may lead to biased results. We use two methods to control for sample selection - Regression Adjustment and Propensity Score Matching - and find wage differentials close to our baseline estimates.
    Keywords: Wage Gap; Flexible Employment; Earnings; Hourly wages;Wage differential; Non- standard work
    JEL: J31
    Date: 2023–06
  7. By: Andres, Christian; Bazhutov, Dmitry; Cumming, Douglas J.; Limbach, Peter
    Abstract: Speculative news on corporate takeovers may hurt productivity because uncertainty and threat of job loss cause anxiety, distraction, and reduced collaboration and morale among employees and managers. Using a panel of OECD-headquartered firms, we show that firm productivity temporarily declines upon announcements of speculative takeover rumors that do not materialize. This productivity dip is more pronounced for targets and for firms in countries with weaker employee rights and less long-term orientation. Abnormal stock returns mirror these results. The evidence fosters our understanding of potential real effects of speculative financial news and the costs of takeover threats.
    Keywords: Distraction, Employee commitment, Employee rights, Fear of job loss, Productivity, Shareholder wealth, Takeover speculation, Distraction
    JEL: D24 G00 G34 J24
    Date: 2023
  8. By: Jonas Radbruch (Humboldt University Berlin, Spandauer Straße 1, D-10178 Berlin); Amelie Schiprowski (University of Bonn, Adenauerallee 24-42, D-53113 Bonn)
    Abstract: This paper provides empirical evidence on the aggregation of information in committees. We analyze unique data from the decision-making process of hiring committees within a large private company. In the hiring process, committee members first conduct independent one-to-one interviews and give individual recommendations before deliberating on a collective hiring decision. We find that committees’ final hiring decisions are systematically less aligned with the initial recommendations of women than with those of men, even though women and men are equally qualified and experienced. This disparity in influence is strongest when recommendations exhibit high disagreement and when a single woman deliberates with two men. The estimated distribution of influence reveals that almost all men are more influential than the median woman. We offer suggestive evidence that these findings have implications for the effectiveness of gender quotas.
    Keywords: Committee Decision-Making, Gender Differences, Hiring
    JEL: D71 J16 M51
    Date: 2023–05

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