nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2023‒07‒24
seven papers chosen by
Patrick Kampkötter
Eberhard Karls Universität Tübingen

  1. Variable Payment Schemes and Productivity: Do Individual-Based Schemes Really Have a Stronger Influence than Collective Ones? By Jirjahn, Uwe; Mohrenweiser, Jens
  2. Relational incentive contracts for teams of multitasking agents By Kvaløy, Ola; Olsen, Trond E.
  3. Closing the Gender Gap in Salary Increases: Evidence from a Field Experiment on Promoting Pay Equity By Jakob Alfitian; Marvin Deversi; Dirk Sliwka
  4. When Are Employers Interested in Electronic Performance Monitoring? Results from a Factorial Survey Experiment By Wieser, Luisa; Abraham, Martin; Schnabel, Claus; Niessen, Cornelia; Wolff, Mauren
  5. Gender and Career Progression in Academia: European Evidence By Morettini, Lucio; Tani, Massimiliano
  6. Why Do Wages Grow Faster for Educated Workers? By David J. Deming
  7. Job Loss, Unemployment Insurance and Health: Evidence from Brazil By Guilherme Amorim; Diogo Britto; Alexandre Fonseca; Breno Sampaio

  1. By: Jirjahn, Uwe (University of Trier); Mohrenweiser, Jens (Bournemouth University)
    Abstract: While studies on individual-based and collective payment schemes are largely unconnected, there appears to be a widely held belief that individual-based schemes have a stronger influence on firm performance than collective ones. This also applies to an index of best management practices developed by Bloom and Van Reenen (2007). The index assigns the highest weight to individual-based performance pay, a medium weight to group-based performance pay and a low weight to profit sharing. This weighting is obviously driven by the implicit assumption that collective payment schemes suffer from a free-rider problem so they have a less strong influence on productivity than individual-based schemes. We show that this assumption is questionable from both a theoretical and an empirical point of view. Using the German Management and Organizational Practices Survey, one of the datasets initiated by Bloom and Van Reenen, we show that individual-based performance pay does not outperform group-based performance pay or profit sharing. The finding also holds when accounting for possible interactions among the payment schemes and considering the moderating roles of firm size, employee representation, and innovativeness. Our results suggest that researchers should be careful with respect to the assumptions and subjective priors guiding their empirical analyses.
    Keywords: management practices, free-rider problem, individual performance pay, group performance pay, profit sharing
    JEL: J33 M52 M50
    Date: 2023–06
  2. By: Kvaløy, Ola (University of Stavanger Business School); Olsen, Trond E. (Dept. of Business and Management Science, Norwegian School of Economics)
    Abstract: We analyze optimal relational contracts for a group (team) of multitasking agents with hidden actions. Contracts are based on noisy signals that may be correlated across agents and between tasks. The optimal contract defines a performance measure in the form of an index (a scorecard) for each agent, and awards a bonus to the highest performing agent, provided his or her index exceeds a hurdle. An optimal index generally involves benchmarking against other agents, and this may, in combination with the hurdle requirement, introduce a cooperative element in the otherwise competitive incentive structure. For agents with separate tasks and normally distributed signals, we find that strong correlation (either positive or negative) across agents is beneficial, while larger correlation within each agent's tasks is detrimental for efficiency, and that this has implications for optimal organization of tasks. For agents with common tasks the optimal contract may have features of both tournament and team incentives. The tournament aspect incentivizes an agent to exert effort on his own task, while the hurdle necessary to receive a bonus also incentivizes an agent to help his peers. In our setting this hybrid scheme can only be optimal if signals from agents' tasks are negatively correlated. Otherwise pure team incentives are optimal.
    Keywords: Relational contracts; tournament incentives; team incentives
    JEL: D00 D20 D21 D80 D86
    Date: 2023–06–30
  3. By: Jakob Alfitian (University of Cologne, Faculty of Management, Economics, and Social Sciences. Albertus Magnus Platz, D-50923 Köln, Germany); Marvin Deversi (Education Y); Dirk Sliwka (University of Cologne, CESifo and IZA, Faculty of Management, Economics, and Social Sciences, Albertus Magnus Platz, D-50923 Köln, Germany)
    Abstract: We present a natural field experiment on promoting pay equity through simple modifications to the salary review process involving 623 middle managers and 8, 951 subordinate employees of a large technology firm.We first document a gender gap not only in salary levels but also in salary increases. Our treatments provide for a gender-neutral reallocation of the salary increase budget available to middle managers aimed at promoting pay equity, along with different variants of a corresponding decision guidance. We show that the budget reallocation combined with an explicit decision guidance, while still leaving managers discretion in allocating the budget, can completely eliminate the gender gap in salary increases. The treatments also do not appear to undermine desired performance differentiation in salary increases. We thus show that simple modifications to the salary review process can go a long way toward achieving pay equity, preventing the widening of gender gaps throughout the career.
    Keywords: Randomized Controlled Trial, Pay equity, Gender pay gap, Salary structure
    JEL: J31 J71 M52
    Date: 2023–07
  4. By: Wieser, Luisa (FAU, Erlangen Nuremberg); Abraham, Martin (University of Erlangen-Nuremberg); Schnabel, Claus (University of Erlangen-Nuremberg); Niessen, Cornelia (University of Erlangen-Nuremberg); Wolff, Mauren (University of Erlangen-Nuremberg)
    Abstract: This paper examines what affects supervisors' considerations about (not) using monitoring technologies to keep track of their subordinates and their work performance. Following a cost-benefit calculus approach we hypothesize that employers weigh costs and benefits of monitoring their subordinates to decide if employee performance monitoring (EPM) is beneficial to their ends. Thus, we conduct a factorial survey experiment (N = 494 supervisors). The hypothetical descriptions of workplace situations – so-called vignettes – were designed to create a situation where the surveyed supervisor is faced with a new team of subordinates and a given technology that can be used to track employees at work. Several components of the situation were randomly varied across vignettes and respondents. At the end of each situation, we asked our respondents to rate their interest to use a given monitoring technology in the described scenario. We find that supervisors are less interested in using monitoring technologies if the monitoring technology targets people rather than tasks and if the time effort for the supervisor is high. However, supervisors' monitoring interest increases if their subordinates interact with sensitive (firm) data and the data evaluation is AI supported. Further, we find that works councils play a role regarding supervisors' monitoring interest. Thus, our results support the thesis that supervisors take the costs and benefits of EPM into consideration regarding their attitude towards monitoring technologies at work.
    Keywords: employee performance monitoring, workplace technology, factorial survey experiment, Germany
    JEL: M50 D22 J01
    Date: 2023–06
  5. By: Morettini, Lucio (National Research Council, Italy); Tani, Massimiliano (University of New South Wales)
    Abstract: We study career trajectories of university researchers in Europe, with a particular emphasis on the speed of career progression by gender. Using the panel data collected by the MORE project (Mobility Survey of the Higher Education Sector) - a longitudinal database that gathers survey responses from over 10, 000 university researchers across Europe - we find that women have a lower probability of promotion, but conditional on a career advance, their career development proceeds at a faster pace than that of comparable male researchers. Faster progression among women is positively influenced by the share of female researchers in the academic environment. Higher salaries in sectors outside academia appear to reinforce the positive selection of women preferring to stay in academia.
    Keywords: academic careers, career progression, promotion
    JEL: J20 J24 J62
    Date: 2023–06
  6. By: David J. Deming
    Abstract: The U.S. college wage premium doubles over the life cycle, from 27 percent at age 25 to 60 percent at age 55. Using a panel survey of workers followed through age 60, I show that growth in the college wage premium is primarily explained by occupational sorting. Shortly after graduating, workers with college degrees shift into professional, nonroutine occupations with much greater returns to tenure. Nearly 90 percent of life cycle wage growth occurs within rather than between jobs. To understand these patterns, I develop a model of human capital investment where workers differ in learning ability and jobs vary in complexity. Faster learners complete more education and sort into complex jobs with greater returns to investment. College acts as a gateway to professional occupations, which offer more opportunity for wage growth through on-the-job learning.
    JEL: J24
    Date: 2023–06
  7. By: Guilherme Amorim; Diogo Britto; Alexandre Fonseca; Breno Sampaio
    Abstract: We study the causal effects of job loss and unemployment insurance (UI) on hospitalization and mortality for Brazilian workers. We construct a novel dataset that merges millions of individual-level administrative records on employment, hospital discharges, and mortality for a period of 17 years. Using a difference-in-differences research design that compares laid-off workers from firms that experienced mass layoffs to similar workers in firms that did not, we find that job loss causes a 30% increase in the probability of male in-patient admission to public hospitals, and a 34% increase in the risk of male mortality. Our estimates are driven primarily by external causes and apply to both older and younger male workers. We find no effects on female outcomes, but children of both male and female workers are subjected to higher risks of hospitalization following their parent's job dismissal. Using a regression-discontinuity design that exploits variation in UI eligibility following job loss, we show that UI largely offsets the risk of hospitalization for older male workers. Our results indicate that governmental labor market policies can effectively mitigate a substantial portion of the adverse health impacts of job loss.
    Keywords: job loss, unemployment insurance, hospitalization, mortality
    JEL: I12 J63 J65
    Date: 2022

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