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on Human Capital and Human Resource Management |
| By: | Subhasish Dugar (Department of Economics, University of Utah); Kenju Kamei (Faculty of Economics, Keio University) |
| Abstract: | Performance pay raises productivity but can also trigger costly peer dynamics, which can influence workers’ preferences over pay schemes. We test whether sabotage risk drives compensation choices using a field experiment with Indian vegetable packers. Workers first perform under exogenously assigned tournaments that differ only in pay inequality but are equivalent in total payout, then choose between them, enabling endogenous sorting. Under impartial expert evaluation, workers select steeper tournaments, indicating no aversion to inequality or competition. Under peer evaluation, sabotage escalates sharply with pay dispersion, prompting workers to preemptively prefer more equitable schemes. Our study expands the literature on labor market sorting by identifying sabotage risk as a fundamental driver of sorting and shows how destructive peer dynamics can rationalize compressed wage structures in practice. |
| Keywords: | Field experiment, Pay equity, Tournament, Sabotage, Sorting. |
| JEL: | C93 J31 M52 D81 |
| Date: | 2025–09–18 |
| URL: | https://d.repec.org/n?u=RePEc:keo:dpaper:dp2025-020 |
| By: | Minni, Virginia (University of Chicago Booth School of Business) |
| Abstract: | Why do managers matter for firm performance? This paper provides evidence of the critical role of managers in matching workers to jobs within the firm using the universe of personnel records from a large multinational firm. The data covers 200, 000 white-collar workers and 30, 000 managers over 10 years in 100 countries. I identify good managers by their speed of promotion and leverage exogenous variation induced by the rotation of managers across teams. I find that good managers cause workers to reallocate within the firm through lateral and vertical transfers. This leads to large and persistent gains in workers’ career progression and productivity. My results imply that the visible hands of managers match workers’ specific skills to specialized jobs, leading to an improvement in the productivity of existing workers that outlasts the managers’ time at the firm. |
| Keywords: | worker productivity, career trajectories, internal labor markets, managers |
| JEL: | J24 M5 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18137 |
| By: | Contreras, Valentina (London School of Economics); Orsini, Chiara (University of Sheffield); Özcan, Berkay (London School of Economics); Koehler, Johann (London School of Economics) |
| Abstract: | We present results from a field experiment that tests the effects of varying gender and linguistic group composition on performance and on group-members’ perception that their voice is heard when completing complex collaborative work within a low scrutiny environment. We randomize individuals enrolled in a postgraduate course populated by mostly women and non-native English speakers into small teams within larger, exogenously assigned seminar groups. Groups are tasked with complex and deliberative research assignments over three months. Using administrative and survey data, we find that a higher share of women in seminar groups significantly benefits the academic performance of group members—an effect driven by a positive effect on female native English speakers — while a greater proportion of women in small teams improves non-native language speakers’ perception of being heard. |
| Keywords: | peer effects, linguistic diversity, gender, team dynamics, higher education, field experiment |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18145 |
| By: | Richard B. Freeman; Huanan Xu |
| Abstract: | This paper examines the impact of working for an ESOP firm and Working-From-Home (WFH) on job satisfaction in the National Longitudinal Survey of Youth 1997 (NLSY97) and the General Social Science (GSS) survey. It finds that job satisfaction is higher for employees in ESOPs than for observationally similar workers in non-ESOP firms and for WFH workers than for their non-WFH peers. Fixed effect analysis of the NLSY97 finds that both ESOP and WFH employment raise job satisfaction for the same worker when he/she changes work status. The channels through which the two conditions raise satisfaction appear to differ: ESOPs raise satisfaction by increasing worker participation on collective workplace or firm decisions while WFH raise satisfaction by increasing worker flexibility in their individual work activity. Both participation and flexibility also raise job satisfaction independently. The data further show ESOPs had more extensive WFH than non-ESOP firms during the Covid-19 pandemic. |
| JEL: | J28 J54 J81 M54 P1 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34231 |
| By: | Xienan Cheng; Mustafa Dogan; Pinar Yildirim |
| Abstract: | This study investigates the effects of artificial intelligence (AI) adoption in organizations. We ask: (1) How should a principal optimally deploy limited AI resources to replace workers in a team? (2) In a sequential workflow, which workers face the highest risk of AI replacement? (3) How does substitution with AI affect both the replaced and non-replaced workers’ wages? We develop a sequential team production model in which a principal can use peer monitoring—where each worker observes the effort of their predecessor—to discipline team members. The principal may replace some workers with AI agents, whose actions are not subject to moral hazard. Our analysis yields four key results. First, the optimal AI strategy stochastically replaces workers rather than fixating on a single position. Second, the principal replaces workers at the beginning and at the end of the workflow, but does not replace the middle worker, since this worker is crucial for sustaining the flow of information obtained by peer monitoring. Third, the principal may optimally underutilize available AI capacity. Fourth, the optimal AI adoption increases average wages and reduces intra-team wage inequality. |
| JEL: | D20 L0 M0 M12 M2 M21 M5 M52 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34259 |
| By: | Amuedo-Dorantes, Catalina; Arenas Arroyo, Esther; Mahajan, Parag; Schmidpeter, Bernhard |
| Abstract: | How do migrant workers impact firm performance? We exploit an unexpected Change in firms’ likelihood of securing low-wage workers through the U.S. H-2B visa program to address this question. Using comprehensive administrative data, we find that access to H-2B workers raises firms’ annual revenues and survival likelihood. We do not find evidence of crowding out of non-H-2B workers or negative spillover effects on competitor firms. Our results support the notion that formal guest worker programs can mitigate labor shortages while limiting harm to incumbent workers. |
| Keywords: | guest workers; migrants; employment; firm dynamics; H-2B visa |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:wiw:wus005:77526726 |
| By: | Byker, Tanya (Middlebury College); Malik, Sara (University of Utah); Patel, Elena (University of Utah); Sandvik, Jason (University of Arizona) |
| Abstract: | We use administrative data from the U.S. Census to estimate the effect of female director representation on workplace gender diversity and women’s earnings. Using a difference-in-differences estimator that correctly accounts for variation in treatment timing, we show that first-time female director appointments lead to subsequent increases in workplace gender diversity. We find that the effects are driven by the improved retention of female workers in the middle and upper quartiles of the firm’s overall earnings distribution. We find suggestive evidence that the effects are due to the newly appointed female directors’ influence on corporate policy, as we observe stronger effects when the director is placed on one of the board’s three core committees. |
| Keywords: | wage, directors, corporate board, women, committee |
| JEL: | J13 J30 J31 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18125 |
| By: | Liaquat, Sidra; Escartín, Jordi; Coyle-Shapiro, Jacqueline A-M. |
| Abstract: | In light of a Volatile, Uncertain, Complex and Ambiguous (VUCA) world, the need for employee adaptability is a critical capacity to navigate challenges and facilitate employees thriving in organizations. One important capacity, systems intelligence, captures employees’ ability to think, adapt and act effectively in interactions with systems. In a three-wave longitudinal study, we examine the relationship between systems intelligence (SI), job crafting (JC), and job performance (JP) over time. We employ the job demands-resources model to demonstrate that SI increases JP, hypothesizing that job resources, as manifested in JC, act as mediator between personal resources (SI) and JP. Data were collected from employees in Pakistan working across the banking, telecommunications, information technology, and engineering sectors. In the first wave, 303 participants completed the survey using validated self-report measures, followed by 212 in the second wave, and 99 in the third wave, each two months apart. Our findings show that systems intelligence at Time 1 was positively related to job performance at Time 3 but not Time 2. We found no significant association of SI at Time 1 with JC at Time 2 or Time 3. JC at Time 2 did not mediate the effects of SI at Time 1 on JP at Time 3. However, JC (T1 & T2) had a significant positive effect on JP (T2 & T3). Overall, our findings suggest that the pathways from systems intelligence and job crafting to job performance are independent. This dual pathway to performance has important theoretical implications as well as practical implications for organizations. Organizations can improve team and individual productivity by fostering systems intelligence and promoting job crafting behaviours. This research directs the attention of leaders and HR functions to the value of tailored interventions in developing these abilities and achieving long-term success and adaptive performance in the workforce. |
| Keywords: | systems intelligence; job performance; crafting behaviours; job resources; personal resources; longitudinal analysis; job demands-resources model; resource substitution |
| JEL: | J50 L81 |
| Date: | 2025–09–14 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129592 |