nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2024‒01‒29
six papers chosen by
Patrick Kampkötter, Eberhard Karls Universität Tübingen

  1. When Protection Becomes Exploitation: The Impact of Firing Costs on Present-Biased Employees By Florian Englmaier; Matthias Fahn; Ulrich Glogowsky; Marco A. Schwarz; Marco Alexander Schwarz
  2. Principal’s distributive preferences and the incentivization of agents By Sophie Cêtre; Max Lobeck
  3. Gender Promotion Gaps and Career Aspirations By Ghazala Azmat; Vicente Cuñat; Emeric Henry
  4. Demand for Personality Traits, Tasks, and Sorting By Brencic, Vera; McGee, Andrew
  5. Should Individuals Choose their Own Incentives? Evidence from a Mindfulness Meditation Intervention By Andrej Woerner; Giorgia Romagnoli; Birgit M. Probst; Nina Bartmann; Jonathan N. Cloughesy; Jan Willem Lindemans
  6. Organization of the state: home assignment and bureaucrat performance By Xu, Guo; Bertrand, Marianne; Burgess, Robin

  1. By: Florian Englmaier; Matthias Fahn; Ulrich Glogowsky; Marco A. Schwarz; Marco Alexander Schwarz
    Abstract: Employment protection harms early-career employees without benefitting them in later career stages (Leonardi and Pica, 2013). We demonstrate that this pattern can result from employers exploiting naïve present-biased employees. Employers offer a dynamic contract with low early-career wages, an unattractive intermediate qualification stage, and high end-of-career wages. Upon reaching the qualification stage, present-biased employees exchange future wages for immediate rewards on an alternative career path – a choice unanticipated by their previous, naïve, self. Thus, employers never pay high future wages. Firing costs help employers indicate that they will not oust employees instead of making promised payments, enabling early-career wage cuts.
    Keywords: employment protection laws, present bias, dynamic contracting
    JEL: D21 D90 J33 K31 M52
    Date: 2023
  2. By: Sophie Cêtre (IRSN/PSE-SANTE/SESUC/LERN - Laboratoire d'Economie du Risque Nucléaire - IRSN - Institut de Radioprotection et de Sûreté Nucléaire); Max Lobeck (University of Konstanz)
    Abstract: Do principals' distributive preferences affect the allocation of incentives within firms? We run a Principal-Agent lab experiment, framed as a firm setting. In the experiment, subjects are randomized in the principal or worker position. Principals must choose piece rate wage contracts for two workers that differ in terms of ability. Workers have to choose an effort level that is non-contractible. Principals are either paid in proportion to the output produced (Stakeholder treatment) or paid a fixed wage (Spectator treatment). We study how principals make trade-offs between incentive concerns (motivating workers to maximize output) and their own normative distributive preferences. We find that, despite the firm-frame and the moral hazard situation, principals do hold egalitarian concerns, as principals are on average willing to trade off their firm's performance (and so their own income) for more wage equality among their workers. The willingness to reduce inequality among workers is sensitive to both extensive and intensive margin incentives, which shows that principals' choices are shaped by incentives that they face themselves.
    Keywords: Fairness, Distributive preferences, Principal-agent, Social preferences
    Date: 2023–07
  3. By: Ghazala Azmat (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research - CEPR); Vicente Cuñat (LSE - London School of Economics and Political Science, CEPR - Center for Economic Policy Research - CEPR); Emeric Henry (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research - CEPR)
    Abstract: Using a representative survey of U.S. lawyers, we document a sizeable gender gap in early partnership aspirations, which explains half of the later gender promotion gap. We further document that the correlation between aspirations and effort provides a 'mechanical' link between aspirations and promotion. Early workplace experiences, such as harassment and demeaning comments, are linked to promotion aspirations. Moreover, early aspirations provide insight into eventual promotion outcomes that goes beyond what can be drawn only from expectations. Our study highlights that measuring aspirations and adapting the corporate culture that shapes them, is a key component for firms to improve workplace environments.
    Keywords: gender gaps, promotion, high-skilled professionals
    Date: 2023
  4. By: Brencic, Vera (University of Alberta, Department of Economics); McGee, Andrew (University of Alberta, Department of Economics)
    Abstract: In job ads, employers express demand for personality traits when seeking workers to perform tasks that can be completed with different behaviors (e.g., communication, problem-solving) but not when seeking workers to perform tasks involving narrowly prescribed sets of behaviors such as routine and mathematics tasks. For many tasks, employers appear to demand narrower personality traits than those measured at the Big Five factor level. The job ads also exhibit substantial heterogeneity within occupations in the tasks mentioned. Workers may thus sort based on personality-derived comparative advantages in tasks into jobs rather than occupations. In the National Longitudinal Survey of Youth 1997, we confirm that personality sorting based on tasks occurs at both the occupation and job levels. In this sample, however, there is little evidence of task-specific wage returns to personality traits, which would influence the supply of traits to jobs with particular tasks. This may explain why personality sorting based on tasks in the sample is very limited in spite of the correlations between tasks and employers’ demands for traits.
    Keywords: personality; tasks; sorting; job ads; employer demand
    JEL: D22 J23 J24 J33 M51
    Date: 2023–12–29
  5. By: Andrej Woerner (LMU Munich); Giorgia Romagnoli (University of Amsterdam – CREED); Birgit M. Probst (TU Munich); Nina Bartmann (Duke University); Jonathan N. Cloughesy (Duke University & University of Southern California); Jan Willem Lindemans (Duke University)
    Abstract: Traditionally, incentives to promote behavioral change are assigned rather than chosen. In this paper, we theoretically and empirically investigate the alternative approach of letting people choose their own incentives from a menu of increasingly challenging and rewarding options. When individuals are heterogeneous and have private information about their costs and benefits, we theoretically show that leaving them the choice of incentives can improve both adherence and welfare. We test the theoretical predictions in a field experiment based on daily meditation sessions. We randomly assign some participants to one of two incentive schemes and allow others to choose between the two schemes. As predicted, participants sort into schemes in (partial) agreement with the objectives of the policy maker. However, in contrast to our prediction, participants who could choose complete significantly fewer sessions than participants that were randomly assigned. Since the results are not driven by poor selection, we infer that letting people choose between incentive schemes may bring in psychological effects that discourage adherence.
    Keywords: monetary incentives; dynamic incentives; field experiment; mental health;
    JEL: D03
    Date: 2023–12–08
  6. By: Xu, Guo; Bertrand, Marianne; Burgess, Robin
    Abstract: How to allocate personnel is a central question in the organization of the state. We link survey data on the performance of 1471 elite civil servants in India to their personnel records between 1975 and 2005 to study how home allocations affect their performance and careers. Using exogenous variation in home assignment generated by an allocation rule, we find that bureaucrats assigned to their home states are perceived to be less effective and more likely to be suspended. These negative effects are driven by states with higher levels of corruption and cohorts with greater numbers of home state officers.
    Keywords: AAM requested
    JEL: J45 O40 D73 M50
    Date: 2023–07–01

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