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on Human Capital and Human Resource Management |
| By: | Namrata Kala; Elizabeth Lyons |
| Abstract: | How managers frame the adoption of organizational practices may impact the returns to such practices, but managerial justification is often correlated with the use of particular practices or other dimensions of managerial quality. Using a randomized control trial, we study how the causal impacts of a frequently used monitoring management practice for remote work employers–digital worker surveillance–varies by randomly allocated justification for its use. In an online labor market, we divide workers into low and high-productivity performers, and randomize both whether surveillance is used and whether its use is justified based on the workers’ baseline productivity. We find that digital surveillance does not have significant effects on worker performance on average, but that not explaining the presence or elimination of digital surveillance based on worker performance significantly reduces worker output. Our results demonstrate a nuanced relationship between monitoring and worker performance that depends on how monitoring is rationalized to workers. |
| JEL: | J24 J28 J53 M54 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33348 |
| By: | Arellano-Bover, Jaime (Yale University); Bianchi, Nicola (Northwestern University); Lattanzio, Salvatore (Bank of Italy); Paradisi, Matteo (Einaudi Institute for Economics and Finance) |
| Abstract: | This paper studies the interaction between the decrease in the gender pay gap and the stagnation in the careers of younger workers, analyzing data from the United States, Italy, Canada, and the United Kingdom. Our findings highlight the importance of labor-market entry to understand the shrinking of the gender pay gap. The entire decline in the aggregate pay gap originates from (i) newer worker cohorts who enter the labor market with smaller-than-average gender pay gaps and (ii) older worker cohorts who exit with higher-than-average gender pay gaps. Convergence at labor-market entry originates primarily from younger men's positional losses in firms' hierarchies and the overall pay distribution. We propose an explanation by which a larger supply of older workers can crowd out younger workers from a limited number of top-paying positions. These negative career spillovers disproportionately affect the career trajectories of younger men because they were more likely than younger women to hold higher-paying jobs at baseline. Consistent with this aging-driven crowd-out interpretation, younger men experience the largest positional losses within the hierarchies of firms that are more exposed to workforce aging. These findings hold after controlling for alternative explanations for the progressive closure of the gender pay gap at labor-market entry. Finally, we document that labor-market exit has been the sole contributor to the decline in the gender pay gap after the mid-1990s, indicating that without structural breaks, the closure of the gender pay gap is unlikely in the foreseeable future. |
| Keywords: | gender gap, workforce aging, cohort turnover, wage growth, labor-market entry, entry wages, initial conditions, age pay gap |
| JEL: | J16 J31 J11 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17621 |
| By: | Jason Sockin; Michael Sockin |
| Abstract: | In the United States and other large economies, women receive less variable pay than men, even within the same firms and job titles. We argue this disparity in pay partly reflects labor market sorting. Since women are less-represented in more variable-pay-intensive jobs, even within occupations, women accumulate less variable pay over time. Women apply relatively less often to and early in their careers separate faster from such roles. Compared with their male peers, women perceive variable-paying jobs as offering worse amenities, including culture, work-life balance, and paid family leave. Compensation schemes appear to induce disparities in pay through worker sorting. |
| Keywords: | gender gap, variable pay, job search, amenities |
| JEL: | J16 M52 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11608 |
| By: | Belardinelli, Paolo; Belle, Nicola; Cantarelli, Paola; Battaglio, Paul |
| Abstract: | This randomized study explores the causal mechanisms linking contingent pay to individual performance on a series of tasks mimicking real public management activities. Employing a parallel encouragement design in a laboratory setting, we disentangle the overall, direct, and indirect performance effects of perceived fairness as well as a pay scheme that reproduces the merit system provisions adopted by the Italian government. The overall performance effect of that contingent pay scheme turned out to be insignificant when averaged across the four experimental tasks. However, a significant pay-for-performance effect was detected for the most routine task. Moreover, we observed heterogeneity in the treatment effect depending on the participants’ relative positioning in the performance ranking. Overall, the data do not provide support for a mediation model linking contingent pay-for-performance through perceived fairness. Points for practitioners Workers tend to perceive pay-for-performance as fairer than equal pay. The effectiveness of pay-for-performance seems to be greater for more routine tasks. Public organizations and their managers should be aware that the effects of pay-for-performance may be unpredictable because they depend on a multitude of factors. |
| Keywords: | human resources management; performance; public management |
| JEL: | R14 J01 |
| Date: | 2023–12–31 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:115460 |
| By: | Mills, Stuart; Spencer, David A. |
| Abstract: | Organisations are increasingly using artificial intelligence (AI). Where AI performs productive tasks more efficiently than humans, organisations will benefit economically through increases in productivity. However, if AI is deployed to undertake unproductive, superfluous tasks, the efficiency benefits will be reduced, even if these tasks are performed more efficiently than a human could, because the said tasks are inefficient to begin with. We call this eventuality ‘efficient inefficiency.’ We outline several reasons why superfluous tasks are created by managers and why they persist in organisations, drawing on an array of behavioural, managerial, and sociological literature. We argue bounded rationality accounts for why managers often fail to identify superfluous tasks, coupled with organisational conflicts which often incentivise their creation. These factors impede the ability of organisations to avoid efficient inefficiency. Restructuring organisations to promote knowledge sharing and align stakeholder incentives may reduce, though not eliminate, the risk of efficient inefficiency. |
| Keywords: | artificial intelligence; bounded rationality; organisational efficiency; productivity; superfluous work |
| JEL: | J50 J1 |
| Date: | 2025–02–28 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126626 |
| By: | Matthew R. Denes; Spyridon Lagaras; Margarita Tsoutsoura |
| Abstract: | Platform intermediation of goods and services has considerably transformed the U.S. economy. We use administrative data on U.S. tax returns to study the role of the gig economy on entrepreneurship. We find that gig workers are more likely to become entrepreneurs, particularly those who are lower income, younger, and benefit from flexibility. We track all newly created firms and show that gig workers start firms in similar industries as their gig experience, which are less likely to survive and demonstrate higher performance. Overall, our findings suggest on-the-job learning promotes entrepreneurial entry and shifts the types of firms started by entrepreneurs. |
| JEL: | G30 J21 J22 J24 L26 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33347 |