nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2023‒06‒26
nine papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. The market for CEOs By Cziraki, Peter; Jenter, Dirk
  2. Skill mismatch and the costs of job displacement By Neffke, Frank; Nedelkoska, Ljubica; Wiederhold, Simon
  3. Working Remotely? Selection, Treatment, and the Market for Remote Work By Natalia Emanuel; Emma Harrington
  4. Managerial Practices and Student Performance: Evidence from Changes in School Principals By Di Liberto, Adriana; Giua, Ludovica; Schivardi, Fabiano; Sideri, Marco; Sulis, Giovanni
  5. Good or Bad News First? The Effect of Feedback Order on Motivation and Performance By Lavinia Kinne
  6. The Career Effects of Union Membership By Dodini, Samuel; Salvanes, Kjell G.; Willén, Alexander; Zhu, Li
  7. Practical and Ethical Perspectives on AI-Based Employee Performance Evaluation By Pletcher, Scott Nicholas
  8. Modelling and Measuring Innovation Culture By Muriel Davies; Stéphanie Buisine
  9. Career Preferences and Socio-Economic Background By Paul Schüle

  1. By: Cziraki, Peter; Jenter, Dirk
    Abstract: We study the market for CEOs of large publicly-traded US firms, analyze new CEOs' prior connections to the hiring firm, and explore how hiring choices are determined. Firms are hiring from a surprisingly small pool of candidates. More than 80% of new CEOs are insiders, defined as current or former employees or board members. Boards are already familiar with more than 90% of new CEOs, as they are either insiders or executives who directors have previously worked with. There are few reallocations of CEOs across firms - firms raid CEOs of other firms in only 3% of cases. Pay differences appear too small to explain these hiring choices. The evidence suggests that firm-specific human capital, asymmetric information, and other frictions have first-order effects on the assignment of CEOs to firms.
    Keywords: CEO labor markets; CEO-firm matching; assignment models; CEO turnover; CEO compensation
    JEL: G30 G34 M12
    Date: 2021–06–14
  2. By: Neffke, Frank; Nedelkoska, Ljubica; Wiederhold, Simon
    Abstract: When workers are displaced from their jobs in mass layoffs or firm closures, they experience lasting adverse labor market consequences. We study how these consequences vary with the amount of skill mismatch that workers experience when returning to the labor market. Using novel measures of skill redundancy and skill shortage, we analyze individuals' work histories in Germany between 1975 and 2010. We estimate difference-in-differences models, using a sample in which we match displaced workers to statistically similar non-displaced workers. We find that displacements increase the probability of occupational change eleven fold, and that the type of skill mismatch after displacement is strongly associated with the magnitude of post-displacement earnings losses. Whereas skill shortages are associated with relatively quick returns to the counterfactual earnings trajectories that displaced workers would have experienced absent displacement, skill redundancy sets displaced workers on paths with permanently lower earnings.
    Keywords: difference-in-differences, job displacement, occupational change, skill mismatch
    JEL: J24 J31 J63 O33
    Date: 2023
  3. By: Natalia Emanuel; Emma Harrington
    Abstract: How does remote work affect productivity and how productive are workers who choose remote jobs? We estimate both effects in a U.S. Fortune 500 firm’s call centers that employed both remote and on-site workers in the same jobs. Prior to COVID-19, remote workers answered 12 percent fewer calls per hour than on-site workers. When the call centers closed due to COVID-19, the productivity of formerly on-site workers declined by 4 percent relative to already-remote workers, indicating that a third of the initial gap was due to a negative treatment effect of remote work. Yet an 8 percent productivity gap persisted, indicating that the majority of the productivity gap was due to negative worker selection into remote work. Difference-in-differences designs also indicate that remote work degraded call quality— particularly for inexperienced workers—and reduced workers’ promotion rates. In a model of the market provision of remote work, we find that firms were in a prisoner’s dilemma: all firms would have gained from offering comparable remote and on-site jobs, but any individual firm was loathe to attract less productive workers.
    Keywords: remote work; Work-from-home; worker productivity; Selection
    JEL: J24 L23 L84 M54
    Date: 2023–05–01
  4. By: Di Liberto, Adriana (University of Cagliari); Giua, Ludovica (University of Cagliari); Schivardi, Fabiano (LUISS Guido Carli University); Sideri, Marco (University of Cagliari); Sulis, Giovanni (University of Cagliari)
    Abstract: We study how managerial practices of school principals affect student performance and aspirations. We link administrative data on secondary Italian students to the management scores of their school principals in 2011 and 2015 based on the World Management Survey methodology. The frequent turnover of school principals over this period allows us to causally interpret school-fixed-effect estimates. We find that management quality positively and substantially impacts standardized math and language tests and student desire to attend college. The comparison to pooled-OLS suggests that fixed effects correct for the downward bias arising from selection of better school principals into more difficult schools.
    Keywords: management, productivity, school principals, student outcomes
    JEL: L2 I2 M1 O32
    Date: 2023–06
  5. By: Lavinia Kinne
    Abstract: How to give feedback in learning environments is a widely discussed topic. I design a field experiment to understand whether the ordering of feedback elements matters for motivation and performance. In random order, university students get one positive and one negative feedback element on their performance in exam practice questions. Students who first receive positive feedback are more motivated to study for the exam compared to those receiving negative feedback first. This effect is driven by a drop in motivation after negative feedback when receiving it first, but not when receiving it second. Furthermore, students adjust their study content to the feedback topics. I find no significant effects of feedback ordering on exam performance overall, but students who first receive the positive feedback perform better if their negative-feedback topic is covered in the exam.
    Keywords: Education, feedback, motivation, performance
    JEL: D83 I20 I23
    Date: 2023
  6. By: Dodini, Samuel (Dept. of Economics, Norwegian School of Economics and Business Administration); Salvanes, Kjell G. (Dept. of Economics, Norwegian School of Economics and Business Administration); Willén, Alexander (Dept. of Economics, Norwegian School of Economics and Business Administration); Zhu, Li (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: We combine exogenous variation in union membership with detailed administrative data and a novel field survey to estimate the career effects of labor union membership. In the survey, we show how workers perceive the role of unions in setting wages and determining work amenities. In the administrative data, we causally examine through which channels unions influence worker outcomes, whether unions influence workers differently across their careers, and what the overall long-run effects of individual union membership are. Our results highlight that the career effect of union membership differs greatly depending on the age at which workers enroll. In addition, we show that focusing on a restricted set of outcomes, such as wages and employment, generates a fractionalized understanding of the multidimensional career effect that union membership has on workers.
    Keywords: Unions; Wage Premiums; Job Protection; Work Environment
    JEL: J16 J31 J32 J51 J63 J65 J81
    Date: 2023–05–26
  7. By: Pletcher, Scott Nicholas
    Abstract: For most, job performance evaluations are often just another expected part of the employee experience. While these evaluations take on different forms depending on the occupation, the usual objective is to align the employee’s activities with the values and objectives of the greater organization. Of course, pursuing this objective involves a whole host of complex skills and abilities which sometimes pose challenges to leaders and organizations. Automation has long been a favored tool of businesses to help bring consistency, efficiency, and accuracy to various processes, including many human capital management processes. Recent improvements in artificial intelligence (AI) approaches have enabled new options for its use in the HCM space. One such use case is assisting leaders in evaluating their employees’ performance. While using technology to measure and evaluate worker production is not novel, the potential now exists through AI algorithms to delve beyond just piece-meal work and make inferences about an employee’s economic impact, emotional state, aptitude for leadership and the likelihood of leaving. Many organizations are eager to use these tools, potentially saving time and money, and are keen on removing bias or inconsistency humans can introduce in the employee evaluation process. However, these AI models often consist of large, complex neural networks where transparency and explainability are not easily achieved. These black-box systems might do a reasonable job, but what are the implications of faceless algorithms making life-changing decisions for employees?
    Date: 2023–04–28
  8. By: Muriel Davies (LINEACT - Laboratoire d'Innovation Numérique pour les Entreprises et les Apprentissages au service de la Compétitivité des Territoires - CESI - CESI : groupe d’Enseignement Supérieur et de Formation Professionnelle - HESAM - HESAM Université - Communauté d'universités et d'établissements Hautes écoles Sorbonne Arts et métiers université); Stéphanie Buisine (LINEACT - Laboratoire d'Innovation Numérique pour les Entreprises et les Apprentissages au service de la Compétitivité des Territoires - CESI - CESI : groupe d’Enseignement Supérieur et de Formation Professionnelle - HESAM - HESAM Université - Communauté d'universités et d'établissements Hautes écoles Sorbonne Arts et métiers université)
    Abstract: We aim to provide a conceptual model of innovation culture in organizations and build a survey tool to measure it. Innovation management focuses often on formalized processes whereas unwritten rules related to organizational culture are also a major factor for innovation and firms' performance. We first position the role of culture with regard to innovation processes, then provide a model of innovation culture relying on five branches (External links, Teams, Organizational context, Individuals, and Leaders). Following the elaboration of this model called ETOILe, we address the issue of measuring it. In this paper, we focus on the less-known components such as External Links and design an ad hoc questionnaire. The validation study is performed through a laboratory test with 115 professional participants followed by reliability analysis of data and principal components analysis. The results of the study enabled us to refine the diagnosis tool as well as the underlying model of innovation culture. The current version includes four branches (Team, Organization, Individuals, Leaders) and ten sub-dimensions including promotion and prevention regulatory focus, managerial practices, discovery and delivery skills, etc. Because of its implicitness and intangibility, culture is often disregarded in the analysis of key ingredients of firms' performance. Our model of innovation culture gathering such unwritten rules contributes to understanding why innovation is so natural and efficient in some companies, and why it is sometimes painful, despite robust managerial structure and methodological processes. Finally, we provide a diagnosis tool intended for all hierarchical levels of the organization, and not only for managerial staff. Our model and tool could be used at several levels: at the company's level to grasp the overall cultural profile, at the department or team level to assess differences in innovation culture between subdivisions in a given company, and at a trans-company level to characterize cultural differences associated to business sectors (e.g., manufacturing sector, consulting sector, retail sector).
    Keywords: Organizational culture Innovation Survey, Organizational culture, Innovation, Survey
    Date: 2023–11–10
  9. By: Paul Schüle
    Abstract: Career decisions, that is educational and occupational choice, are not only made by comparing expected incomes, but also by considering non-monetary rewards like social impact, chances of promotion, or the compatibility of work and family. In this paper, I use rich panel data from Germany to show that preferences about such aspects of a career as stated at age 17 are strong predictors of future earnings in the labor market. At the same time, these preferences differ significantly by socioeconomic background, and intergenerational income persistence is reduced by 8–22 percent when accounting for career preferences.
    Keywords: Equality of opportunity, intergenerational mobility, occupational choice
    JEL: D01 D63 J24 J62 I38
    Date: 2023

This nep-hrm issue is ©2023 by Patrick Kampkötter. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.