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on Human Capital and Human Resource Management |
| By: | Marc Claveria-Mayol; Pau Milán; Nicolás Oviedo Dávila |
| Abstract: | We study the problem of a principal designing wage contracts that simultaneously incentivize and insure workers. Workers’ incentives are connected through chains of productivity spillovers, represented by a network of peer-effects. We solve for the optimal linear contract for any network and show that optimal incentives are steeper for more central workers. We link firm profits to organizations’ structure via the spectral properties of the co-worker network. When production is modular, the incentive allocation rule is sensitive to the link structure across and within modules. When firms can’t write personalized con- tracts, better connected workers extract rents and total surplus is reduced. In this case, unemployment emerges endogenously because large within-group differences in centrality can decrease firm’s profits. |
| Keywords: | Incentives, Organizations, contracts, Networks, moral hazard |
| JEL: | D21 D23 D85 D86 L14 L22 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:bge:wpaper:1457 |
| By: | Laurent Loic Yves Bossavie; Erkan Duman; Aysenur Acar Erdogan; Mattia Makovec; Sirma Demir Seker |
| Abstract: | The central hypothesis of this research is that there is a strong, positive correlation between good management practices and firm performance, for which we find strong evidence in a survey on management practices of Turkish manufacturing firms. To better understand this relationship, we investigated the drivers of firm heterogeneity in management practices. We find that product market competition and firm-level factors such as size, multinational status, work effort in the workforce, the level of managerial hierarchy, and ownership are significant determinants of management practices. We also find that family ownership and management are significant deterrents to good management practices and are strongly associated with declines in firm performance. Through this study, we also explored whether the adoption of better management practices comes at the expense of a good work-life balance. In this regard, we find that better-managed firms, in addition to attaining higher performance levels, provide better working conditions for their employees, resulting in improved employee well-being. |
| Date: | 2024–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:hdnspu:193764 |
| By: | Mohrenweiser, Jens; Pfeifer, Christian |
| Abstract: | Empirical studies find that firms with employee representation have a higher productivity than firms without employee representation. The exact mechanisms for this consistent finding remain unclear, however. A frequent theoretical argument postulates that employee representation provides a safeguarding mechanism which improves justice perceptions of employees that in turn improves cooperation and performance. Using a German longitudinal linked employer-employee dataset, we show that employees in firms with a collective bargaining agreement have higher individual and shared justice perceptions. These higher justice perceptions contribute to the productivity premium of firms with collective agreement. In contrast, justice perceptions are not higher in firms with than in firms without a works council. |
| Keywords: | works councils, collective bargaining, organisational justice, firm performance |
| JEL: | J53 M54 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1499 |
| By: | Alessandra Fenizia; Tom Kirchmaier |
| Abstract: | This paper studies whether working from home (WFH) affects workers' performance in public sector jobs. Studying public sector initiatives allows us to establish baseline estimates on the impact of WFH net of incentives. Exploiting novel administrative data and plausibly exogenous variation in work location, we find that WFH increases productivity by 12%. These productivity gains are primarily driven by reduced distractions. They are not explained by differences in quality, shift length, or task allocation. The productivity gains more than double when tasks are assigned by the supervisor. |
| Keywords: | working from home, productivity, public sector |
| Date: | 2024–09–25 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2036 |
| By: | Klaus M. Schmidt; Jonas von Wangenheim |
| Abstract: | Reference-dependent preferences can explain several puzzling observations about organizational change. We introduce a dynamic model in which a loss-neutral firm bargains with loss-averse workers over organizational change and wages. We show that change is often stagnant or slow for long periods followed by a sudden boost in productivity during a crisis. Moreover, it accounts for the fact that different firms in the same industry often have significant productivity differences. The model also demonstrates the importance of expectation management even if all parties have rational expectations. Social preferences explain why it may be optimal to divide a firm into separate entities. |
| Keywords: | Organizational Change, Productivity, Reference Points, Loss Aversion, Social Preferences |
| JEL: | D23 D91 L2 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2024_599 |
| By: | Bartelsman, Eric (Vrije Universiteit Amsterdam); Dobbelaere, Sabien (Vrije Universiteit Amsterdam); Mattioli, Alessandro Zona (Vrije Universiteit Amsterdam) |
| Abstract: | This paper provides evidence from a natural experiment on the importance of workers' tacit knowledge about firms' intangible assets for competition in product and labor markets. Evidence is presented on product and labor market imperfections across manufacturing and services firms in the Netherlands. Price-cost markups and wage markups are both shown to be positively related to intangible intensity at the firm level. A model is developed of the processes of intangible investment and wage bargaining of heterogeneous firms, providing a mechanism that relates workers' tacit knowledge to firm-level product and labor market imperfections. The model also incorporates a role for non-compete agreements (NCAs) limiting worker mobility. Our main empirical contribution comes from using linked employer-employee panel data with information on NCAs and changes in enforceability of these agreements. Using an event-study framework, we demonstrate that the removal of NCAs leads to higher wages and worker mobility, especially for workers in intangible-intensive firms. We find that NCAs affect workers across the skill distribution. The causal findings from changes in the legality of NCAs correspond with the mechanism described in the model. |
| Keywords: | price-cost markups, rent sharing, technology, tacit knowledge, non-compete agreements |
| JEL: | J41 L10 M52 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17260 |
| By: | Anne Boring (Erasmus University Rotterdam); Josse Delfgaauw (Erasmus University Rotterdam) |
| Abstract: | Do workers speak their mind about sexism and about diversity, equity, and inclusion (DEI) policies in the workplace? We measure social desirability bias regarding sexism and DEI policies using a list experiment survey among workers from five male-dominated industries in France and in the US. In both countries and, remarkably, among both men and women, we document substantial social desirability bias. Managers exhibit a larger bias than non-managerial employees. This difference between voiced and real attitudes may make organizations overestimate support for DEI policies in their workforce, rendering such policies less effective. |
| Keywords: | Sexism, Diversity, Social desirability bias, List experiment survey |
| JEL: | J16 J71 M14 M5 |
| Date: | 2024–11–01 |
| URL: | https://d.repec.org/n?u=RePEc:tin:wpaper:20240002 |