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on Human Capital and Human Resource Management |
| By: | Artz, Benjamin (University of Wisconsin, Oshkosh); Heywood, John S. (University of Wisconsin, Milwaukee) |
| Abstract: | We use US longitudinal survey data to examine the role of performance pay (other than profit sharing) in worker quit decisions. We argue that performance pay should increasingly be viewed as an indicator of an internal labor market rather than of a simple contemporaneous incentive. Suggestive of this claim, we find that in ever more complete specifications that account for worker and employer characteristics, aggregate earnings and worker job satisfaction, performance pay is associated with a reduced probability of worker quits. This remains when including worker fixed effects that control for unmeasured invariant heterogeneity. We investigate how it varies with the type of performance pay and its intensity. We confirm heterogeneity in this influence by workplace size. |
| Keywords: | performance pay, internal labor markets, voluntary quits |
| JEL: | J33 J41 J63 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17791 |
| By: | Giulio Ecchia; Natalia Montinari; Raimondello Orsini; Sveva Vitellozzi |
| Abstract: | Firm performance depends critically on the efficient allocation of tasks across employees. Yet, task assignment decisions are often shaped not only by productivity considerations but also by managerial biases and gender stereotypes—frequently resulting in women being disproportionately assigned low-promotability, female-stereotyped tasks. This paper investigates whether making workers' task preferences visible to managers can reduce gender-stereotypical assignments and improve overall outcomes. We conduct two complementary experiments. In the first, participants act as workers, completing real-effort tasks and reporting their task preferences. In the second, a separate group of participants from the same subject pool takes on the role of managers and assigns tasks to pairs of workers under varying information conditions. In the control condition—where managers lack access to workers' preferences—task assignments are more likely to reflect gender stereotypes. In contrast, when managers are informed of workers' preferences, stereotypical assignments decrease, and managerial earnings improve. We also find that preference-informed task allocation leads to higher managerial earnings, suggesting that reducing gender bias not only promotes fairness but also enhances organizational efficiency. Our findings highlight the potential of low-cost informational interventions to promote fairer and more effective task allocation practices. |
| JEL: | J16 J71 M12 C91 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:bol:bodewp:wp1202 |
| By: | Bertheau, Antoine (Norwegian School of Economics); Hoeck, Christian Philip (University of Copenhagen) |
| Abstract: | This paper yields new insights into why similar workers are paid differently by surveying a representative sample of Danish firms and linking responses to administrative data. We find that a substantial minority of firms, about 18 percent, have inaccurate beliefs about their position in the wage distribution. Inaccurate beliefs are more likely to occur in smaller firms. To study the implications of firms’ inaccurate beliefs, we build a simple model with monopsonistic firms. Using our survey, we elicit firms’ motives for setting high wages. The dominant motive aligns with wage-posting models, i.e., retaining and attracting new employees. The least common motive is compensating for negative job characteristics. |
| Keywords: | firm information frictions, wage dispersion, biased beliefs |
| JEL: | J01 J31 J42 D83 M52 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17762 |
| By: | Brayan S. Diaz; Andrea Neyra Nazarrett; Julian Ramirez; Raffaella Sadun; Jorge A. Tamayo |
| Abstract: | Training investments are essential for improving worker and firm productivity, yet their implementation is often hindered by low participation rates and insufficient worker engagement. This study uses data from three firms—a car manufacturer, a quick-service restaurant chain, and a retail company—to show that variation in training participation among employees is closely tied to differences in middle managers’ behavior and practices. Middle managers who actively engage with their employees and emphasize their well-being and development are associated with significantly higher participation in training programs. These managerial differences significantly influence employee performance and absenteeism, especially during periods of organizational change. Together, these findings underscore the importance of middle managers in bridging the gap between centrally designed HR policies and their effective on-the-ground execution. |
| JEL: | J24 L23 M12 M53 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33670 |
| By: | Högn, Celina (affiliation not available); Mayer, Lea (affiliation not available); Rincke, Johannes (University of Erlangen-Nuremberg); Winkler, Erwin (University of Erlangen-Nuremberg) |
| Abstract: | This paper examines preferences for gender diversity among co-workers. Using stated-choice experiments with 5, 400 PhD students and university students in Germany, we uncover a substantial willingness to pay (WTP) for gender diversity of up to 5% of earnings on average. Importantly, we find that women have a much higher WTP for gender diversity than men. While the WTP differs by career ambition, competitiveness, and family preferences, we find that gender differences in traits and preferences cannot explain gender differences in the WTP for diversity. Our findings provide an explanation for differential sorting of men and women into high-profile jobs based on the share of female co-workers. |
| Keywords: | gender differences, preferences, willingness to pay, stated choice experiment, gender diversity |
| JEL: | J16 J24 J31 J33 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17750 |
| By: | Ben Weidmann; Yixian Xu; David J. Deming |
| Abstract: | We show that leadership skill with artificially intelligent (AI) agents predicts leadership skill with human groups. In a large pre-registered lab experiment, human leaders worked with AI agents to solve problems. Their performance on this “AI leadership test” was strongly correlated (ρ=0.81) with their causal impact as leaders of human teams, which we estimate by repeatedly randomly assigning leaders to groups of human followers and measuring team performance. Successful leaders of both humans and AI agents ask more questions and engage in more conversational turn-taking; they score higher on measures of social intelligence, fluid intelligence, and decision-making skill, but do not differ in gender, age, ethnicity or education. Our findings indicate that AI agents can be effective proxies for human participants in social experiments, which greatly simplifies the measurement of leadership and teamwork skills. |
| JEL: | J24 M54 O30 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33662 |
| By: | Larissa Fuchs; Matthias Heinz; Pia Pinger; Max Thon |
| Abstract: | Job advertisements are a key tool for companies to attract talent. We conduct a randomized controlled trial (RCT) in which we vary the content of job advertisements for STEM positions at one of the largest technology firms in Europe. Specifically, we examine how emphasizing job flexibility and career advancement in job ads causally affects the firm's applicant pool. We find substantial treatment effects for entry-level positions, but not for senior-level roles. Highlighting job flexibility increases the total number of applicants – both female and male – while emphasizing career advancement increases applications only from men. Notably, both effects are entirely driven by applicants residing outside the federal state where the firm is located. In a separate survey experiment conducted among STEM students, we find that the content of job advertisements influences young professionals' perceptions of the work environment. In particular, highlighting career advancement shifts beliefs toward better career benefits, but also toward a lower work-life balance. |
| Keywords: | beliefs, hiring, field experiments, survey experiment, job advertisements, gender |
| JEL: | M51 M52 D22 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_683 |
| By: | Chen, Yuyu (Peking University); Hensel, Lukas (Peking University); Yao, Xinjue (University of Hong Kong) |
| Abstract: | How does manager quality affect subordinates' career progression? We examine the causal effect of manager quality on workers' career outcomes in the context of managerial teams at a large construction firm. We exploit quasi-random variation in worker-manager matching through frequent project reassignments to identify the causal effect of high-quality managers on promotions. Working under a high-quality manager increases workers' subsequent promotion rates by 13 percentage points. We provide evidence in support of managerial human capital transmission as the primary mechanism: effects are concentrated among workers and positions that require most managerial skills and exposed workers earn significantly higher performance-based bonuses. |
| Keywords: | skill transmission, promotions, manager quality |
| JEL: | M51 J24 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17848 |
| By: | Addison, John T. (Durham University Business School); Teixeira, Paulino (University of Coimbra) |
| Abstract: | This paper investigates one aspect of the structured management practices literature which has argued that exogenous legislative changes leading to reductions in union power (identified with the passage of RTW laws) serve to increase the use of management incentives practices often resisted by unions as giving too much discretion to the employer. Capturing such alterations in the business environment by compound legal changes in employee representation protection we investigate whether corresponding changes in the use of incentive management practices are found in European nations. Our baseline difference-in-differences model shows that reductions in the protection offered employees are associated with increased adoption of “people management, ” while increases in employee representation protection point to more strongly significant negative treatment effect estimates. Each finding is corroborated in a complementary analysis using synthetic control methods. Future discussion of management practices might be expected to take explicit account of the value of employee voice. |
| Keywords: | difference-in-differences, employee representation protection, right-to-work laws, incentives management practices, structured management practices, synthetic controls, CBR Labour Regulation Index, European Company Survey |
| JEL: | D22 J8 L2 M11 M50 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17778 |
| By: | Cellini, Stefano (University of Surrey); Mello, Marco (University of Aberdeen); Moscelli, Giuseppe (University of Surrey) |
| Abstract: | We build a unique dataset by linking high-quality administrative data sources and model the mobility choices of tenured English National Health Service (NHS) hospital doctors across hospital organizations according to a random utility choice framework based on hospital quality, pay-for-performance incentives, local residential amenities and travel-to-work commuting distances. We account for the endogeneity of hospital quality through a control function approach. Doctors are willing to move 5.3 extra kilometers in order join a new hospital organization with a one-standard-deviation lower mortality rate, whereas they are willing to trade a standard deviation of the average monetary bonus received for their clinical excellence with the cost of moving 5 extra kilometers from their home. Primary school quality and low crime residential areas are only marginally salient in the choice of new employer. Counterfactual simulation estimates reveal that simultaneous improvements in hospital mortality and performance-related pay awards by one fourth of a standard deviation can lead to decreases in regional hospital doctor vacancy rates by 2% to 11%. |
| Keywords: | organization quality, hospital, physicians, mobility, skilled workers, incentive pay, vacancies |
| JEL: | C25 I11 J24 J45 J62 J63 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17798 |
| By: | Fabrizio Dell'Acqua; Charles Ayoubi; Hila Lifshitz; Raffaella Sadun; Ethan Mollick; Lilach Mollick; Yi Han; Jeff Goldman; Hari Nair; Stewart Taub; Karim Lakhani |
| Abstract: | We examine how artificial intelligence transforms the core pillars of collaboration—performance, expertise sharing, and social engagement—through a pre-registered field experiment with 776 professionals at Procter & Gamble, a global consumer packaged goods company. Working on real product innovation challenges, professionals were randomly assigned to work either with or without AI, and either individually or with another professional in new product development teams. Our findings reveal that AI significantly enhances performance: individuals with AI matched the performance of teams without AI, demonstrating that AI can effectively replicate certain benefits of human collaboration. Moreover, AI breaks down functional silos. Without AI, R&D professionals tended to suggest more technical solutions, while Commercial professionals leaned towards commercially-oriented proposals. Professionals using AI produced balanced solutions, regardless of their professional background. Finally, AI’s language-based interface prompted more positive self-reported emotional responses among participants, suggesting it can fulfill part of the social and motivational role traditionally offered by human teammates. Our results suggest that AI adoption at scale in knowledge work reshapes not only performance but also how expertise and social connectivity manifest within teams, compelling organizations to rethink the very structure of collaborative work. |
| JEL: | M15 M2 O3 O31 O33 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33641 |