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on Human Capital and Human Resource Management |
| By: | Bašić, Zvonimir (University of Glasgow); Bortolotti, Stefania (University of Bologna); Salicath, Daniel (NAV Norwegian Labour and Welfare Administration); Schmidt, Stefan (Max Planck Institute for Research on Collective Goods); Schneider, Sebastian O. (Max Planck Institute for Research on Collective Goods); Sutter, Matthias (Max Planck Institute for Research on Collective Goods) |
| Abstract: | Incentives are supposed to increase effort, yet individuals react differently to incentives. We examine this heterogeneity by investigating how personal characteristics, preferences, and socio-economic background relate to incentives and performance in a real effort task. We analyze the performance of 1, 933 high-school students under a Fixed, Variable, or Tournament payment. Productivity and beliefs about relative performance, but hardly any personal characteristics, play a decisive role for performance when payment schemes are exogenously imposed. Only when given the choice to select the payment scheme, personality traits, economic preferences and socioeconomic background matter. Algorithmic assignment of payment schemes could improve performance, earnings, and utility, as we show. |
| Keywords: | effort, productivity, incentives, personality traits, preferences, socio-economic background, ability, heterogeneity, sorting, algorithm, lab-in-the-field experiment |
| JEL: | C93 D91 J24 J41 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17287 |
| By: | Gregoric, Aleksandra (Copenhagen Business School); Kato, Takao (Colgate University); Larsen, Casper B.L. (Copenhagen Business School) |
| Abstract: | We join the scholarly conversation on the implications of the different configurations of firms' stakeholder coalitions for their employment practices, by investigating how the structural arrangements granting employees a role in firm boards of directors (employee governance representation, EGR) affect firms' propensity to staff management positions through external labor markets rather than internal promotions. The literature has thus far pointed to a possible workers' impact on employment practices primarily through the power mechanism, contingent on the employees' ability to enforce their preferences with regard to hiring and other employment practices. We contribute to this scholarly work by (1) explicating why employees likely prefer firms to rely on internal labor markets (ILM) when hiring new managers and (2) conceptualizing the employees' impact on the staffing of management positions via the efficiency mechanism, related to the positive effects of EGR on the functioning of the ILM. We provide support for our hypotheses, using linked employer-employee data for Danish firms during 2001-2017. |
| Keywords: | employee representation, corporate governance, hiring practices, internal labor markets, management jobs |
| JEL: | M5 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17304 |
| By: | Maida, Agata (Università degli Studi di Milano); Pezone, Vincenzo (Tilburg University) |
| Abstract: | We analyze the effect of CEO pay disclosure on wage distribution by exploiting a 1998 reform requiring Italian publicly listed companies to disclose top executives' compensation. In firms where CEOs disclose high total compensation, the top 5 percent and 1 percent of the within-firm wage distribution rise substantially. Instead, the effect on average wages is small and only marginally significant. As a result, wage inequality increases. These effects are stronger for workers with low experience or located in the main region of the firm's operations. Moreover, they are driven by changes in workers' bargaining power, rather than by sorting. |
| Keywords: | CEO compensation, wage disclosure, income inequality, wage bargaining |
| JEL: | J31 D63 D9 M12 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17243 |
| By: | Picchio, Matteo (Marche Polytechnic University); van Ours, Jan C. (Erasmus School of Economics) |
| Abstract: | High temperatures can have a negative effect on workplace safety for a variety of reasons. Discomfort and reduced concentration caused by heat can lead to workers making mistakes and injuring themselves. Discomfort can also be an incentive for workers to report an injury that they would not have reported in the absence of heat. We investigate how temperature affects injuries of professional tennis players in outdoor singles matches. We find that for men injury rates increase with ambient temperatures. For women, there is no effect of high temperatures on injuries. Among male tennis players, there is some heterogeneity in the temperature effects, which seem to be influenced by incentives. Specifically, when a male player is losing at the beginning of a crucial (second) fourth set in (best-of-three) best-of-five matches, the temperature effect is much larger than when he is winning. In best-offive matches, which are more exhausting, this effect is age-dependent and stronger for older players. |
| Keywords: | climate change, temperatures, tennis, injuries, health |
| JEL: | J24 J81 Q51 Q54 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17272 |
| By: | Philip Brookins; Jennifer Brown; Dmitry Ryvkin |
| Abstract: | Reward schemes may affect not only agents' effort, but also their incentives to gather information to reduce the riskiness of the productive activity. In a laboratory experiment using a novel task, we find that the relationship between incentives and evidence gathering depends critically on the availability of information about peers' strategies and outcomes. When no peer information is available, competitive rewards can be associated with more evidence gathering than noncompetitive rewards. In contrast, when decision-makers know what or how their peers are doing, competitive rewards schemes are associated with less active evidence gathering than noncompetitive schemes. The nature of the feedback -- whether subjects receive information about peers' strategies, outcomes, or both -- also affects subjects' incentives to engage in evidence gathering. Specifically, only combined feedback about peers' strategies and performance -- from which subjects may assess the overall relationship between evidence gathering, riskiness, and success -- is associated with less evidence gathering when rewards are based on relative performance; we find no similar effect for noncompetitive rewards. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2409.06248 |
| By: | Carter, Charles (University of Bath); Delaney, Judith M. (University of Bath); Papps, Kerry L. (University of Bradford) |
| Abstract: | We exploit a spatial discontinuity in the wages paid by the United Kingdom's National Health Service to examine how wages affect the duration of time a vacancy is advertised. NHS workers in inner London are mandated by law to be paid an extra 4.3% more than those who work in outer London. We use a regression discontinuity design and estimate an elasticity of duration with respect to wages of -6.3. This number is larger than reported by previous studies and suggests that firms can fill worker shortages faster by raising wages. This also highlights the importance this margin of worker recruitment when analysing firm search and job match. Our results are robust to various checks including a placebo test using fictitious borders and are robust to changes in the bandwidth and the duration measure. The estimates are similar across all occupational groups in the NHS and are not limited to jobs that require specific skills such as nurses and therapists. Our results provide evidence for policy makers which suggests that increasing the wages paid to NHS workers may lead to increased cost savings by reducing the need to hire expensive agency staff and may also lead to better health outcomes of the population through reduced staff shortages. |
| Keywords: | vacancy duration, wages, employer search |
| JEL: | J22 J23 J31 J38 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17273 |
| By: | Grund, Christian (RWTH Aachen University); Harbring, Christine (RWTH Aachen University); Klinkenberg, Lisa (RWTH Aachen University) |
| Abstract: | The organization of work and the characteristics of tasks have undergone considerable changes in recent years. The developments include (i) an increased relevance of virtual teams and (ii) a higher demand for non-routine tasks in organizations, including creativity. Existing research on creative teams focuses on one-shot or existing teams, overlooking the importance of the formation phase of teams. This formation phase is particularly relevant for teams working in a virtual workplace setting, where communication and coordination may be constrained by the environment. Next to virtual work, hybrid working models ascend, also for teams. Therefore, we examine the influence of workplace settings and changes in these settings on creative performance of teams. We also investigate whether the individuals' ability to choose their workplace affects creative performance. We answer those questions by conducting a 2-phase experiment with dyadic teams in the lab and online to model a presence and a virtual workplace setting and account for the formation phase of teams. We implemented the "Unusual-Uses Task" as non-routine creative task. Our results showed that teams working in presence outperform those working online. Interestingly, working at least one phase in presence induces higher creative performance than entirely working online, underscoring the relevance of hybrid workplace settings. Moreover, no significant effects of self-selection on performance were found. |
| Keywords: | teams, creativity, work from home, hybrid working models, self-selection |
| JEL: | C92 M5 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17258 |
| By: | Ma, Mingye (University of Southampton); Riener, Gerhard (University of Southampton); Xu, Youzong (University of Nottingham Ningbo China) |
| Abstract: | We explore the role of self- and peer evaluations in education, with a particular emphasis on gender differences. We construct a model of (self-)deception to predict outcomes for scenarios with and without self-evaluation. By using unique data from a first-year economics class at a Sino-UK university, we examine how students assess their own and their peers' contributions to group projects under varying self-assessment conditions. Our findings reveal a significant self-serving bias across both genders, though with subtle distinctions. Women, despite greater societal recognition, exhibit smaller self-social evaluation gaps (SSEG). The variation in abstention rates between treatments is mainly attributed to lowerperforming males. These findings indicate that the possibility of self-assessment influences rating behavior, potentially exacerbating gender disparities and affecting gender equity. |
| Keywords: | higher education, incentives, field experiment, peer evaluation, gender |
| JEL: | D01 D91 I23 C93 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17267 |
| By: | David J. Deming; Mikko I. Silliman |
| Abstract: | This paper synthesizes the economics literature on skills and human capital, with a particular focus on higher-order capacities like social and decision-making skills. We review the empirical evidence on returns to human capital from both a micro and macro perspective, as well as the evidence on returns to human capital investment over the life-cycle. We highlight two key limitations of human capital theory as currently implemented. First, prior work mostly assumes that human capital is one-dimensional and can be measured by education or test scores alone. Second, human capital is typically modeled as augmenting the marginal product of labor with workers being treated as factors of production, just like physical capital. We argue for a new approach that treats workers as agents who decide how to allocate their labor over job tasks. Traditional cognitive skills make workers more productive in any task, while higher-order skills govern workers’ choices of which tasks to perform and whether to work alone or in a team. We illustrate the value of this approach with stylized models that incorporate teamwork and decision-making skills and generate predictions about how returns to skills vary across contexts. |
| JEL: | J24 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32908 |
| By: | Marcus Roesch (Erasmus School of Economics); Michiel Gerritse (Erasmus School of Economics); Bas Karreman (Erasmus School of Economics) |
| Abstract: | Do workers in multinational enterprises (MNEs) build stronger CVs? We track the careers of all workers entering the Dutch labor market over the years 2006-2021 and find large and portable wage premia of MNE employment experience. Workers with experience at MNEs instead of domestic firms earn up to 14% higher wages within the MNE, and up to 11% higher wages after moving to another firm. Consistent with a model of MNEs that leverage the value of their employment experience, we find that MNEs hire more juniors, pay lower starting wages, and are more selective towards senior workers than domestic firms. |
| Keywords: | multinationals, experience wage premia, firm organization, AKM, knowledge spillovers, Netherlands |
| JEL: | F23 F66 J24 J31 |
| Date: | 2024–01–03 |
| URL: | https://d.repec.org/n?u=RePEc:tin:wpaper:20240005 |
| By: | Höcker, Martin Christian; Voll, Kyra; Bachtal, Yassien Nico; Pfnür, Andreas |
| Abstract: | As a result of the transformation of work, organisations and employees find themselves in a hybrid working world. Due to the perceived personal and work-related benefits, employees prefer to perform large parts of their work from home. At the same time, some organisations would like to see their employees back in the office more often. While, in the accompanying return-to-office debate, some organisations are focusing on restricting employee flexibility, others are asking themselves how they can increase the desire of employees to work in the office again through an attractive workplace design. The discussion about increasing employees' desire to work in the office focuses on improving the physical workplace, but the role of organisational culture has so far been excluded from the debate. Organisational cultures influence employee behaviour; therefore, an office-centric organisational culture could influence the desire to work in the office. Against this background, this study uses hierarchical moderated multiple regression analysis to examine the significance of real estate resources and organisational culture for the desire to work in the office. The empirical analysis considers survey data from N = 453 German employees. The study results suggest that employees can be lured back to the office by upgrading the quality of the workplace. In addition, the study demonstrates the moderating influence of an office-centred culture on the relationship between employees' satisfaction with their office workplace and the share of working hours they want to spend in the office. The study thus provides guidance in the debate on strategies for returning employees to the office and offers indications for workplace planning and organisational and management-related adaptation. |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:dar:wpaper:149747 |