|
on Human Capital and Human Resource Management |
| By: | Pau Milán; Nicolás Oviedo Dávila |
| Abstract: | Risk-averse workers in a team exert effort to produce joint output. Workers’ incentives are connected via chains of productivity spillovers, represented by a network of peer-effects. We study the problem of a principal offering wage contracts that simultaneously incentivize and insure agents. We solve for the optimal linear contract for any network and show that optimal incentives are loaded more heavily on workers that are more central in a specific way. We conveniently link firm profits to network structure via the networks spectral properties. When firms can’t personalize contracts, better connected workers ex- tract rents. In this case, a group composition result follows: large within-group differences in centrality can decrease firm’s profits. Finally, we find that modular production has important implications for how peer structures distribute incentives. |
| Keywords: | moral hazard, Networks, Incentives, Organizations, contracts |
| JEL: | D11 D52 D53 G52 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:1439&r=hrm |
| By: | Grund, Christian (RWTH Aachen University); Nießen, Anna (RWTH Aachen University) |
| Abstract: | Presenteeism behavior, i.e. working despite illness, is a common phenomenon wordwide and can have severe consequences for employees and firms alike. In this study, we investigate the relation between the use of company performance appraisals and employees' presenteeism behavior. We use linked-employer-employee data (the German Linked Personnel Panel) and apply pooled Poisson as well as linear fixed effects estimations. We show that the use of performance appraisals is associated with significant lower annual presenteeism days in the amount of one-half to one full day. In addition, the presence of a works council strengthens the negative relationship between performance appraisals and presenteeism. The results are driven by performance appraisals that are linked to performance-related pay, in particular. Our study contributes to the understanding of context specific behavioral consequences of HRM practices such as performance appraisals. |
| Keywords: | presenteeism, sickness, performance appraisals, performance pay, works councils, German Linked Personnel Panel |
| JEL: | M5 I12 J22 J53 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16883&r=hrm |
| By: | Gächter, Simon (University of Nottingham); Kaiser, Esther (Zurich University of Applied Sciences (ZHAW)); Königstein, Manfred (University of Erfurt) |
| Abstract: | Explicit and implicit incentives and opportunities for mutually beneficial voluntary cooperation co-exist in many contractual relationships. In a series of eight laboratory gift-exchange experiments, we show that incentive contracts can lead to crowding out of voluntary cooperation even after incentives have been abolished. This crowding out occurs also in repeated relationships, which otherwise strongly increase effort compared to one-shot interactions. Using a unified econometric framework, we unpack these results as a function of positive and negative reciprocity, as well as the principals' wage offer and the incentive-compatibility of the contract. Crowding out is mostly due to reduced wages and not a change in reciprocal wage-effort relationships. Our systematic analysis also replicates established results on gift exchange, incentives, and crowding out of voluntary cooperation while exposed to incentives. Overall, our findings show that the behavioral consequences of explicit incentives strongly depend on the features of the situation in which they are embedded. |
| Keywords: | principal-agent games, gift-exchange experiments, incomplete contracts, explicit incentives, implicit incentives, repeated games, crowding out |
| JEL: | C70 C90 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16872&r=hrm |
| By: | McNally, Sandra; Schmidt Rivera, Luis; Sivropoulos-Valero, Anna Valero |
| Abstract: | Further education and sixth form colleges are key institutions for facilitating skill acquisition among 16–19 year olds in the UK. They enrol half a school cohort after completion of their lower secondary education, and this includes a disproportionate number from low-income backgrounds. Yet little is known about what could improve performance in these institutions. We conduct the world's first management practices survey in such institutions, and match this to administrative longitudinal data on over 40, 000 students. Value-added regressions with rich controls suggest that structured management matters for educational outcomes, especially for students from low-income backgrounds. For this group, in a hypothetical scenario where an individual is moved from a college at the 10th percentile of management practices to the 90th, this would be associated with 8% higher probability of achieving a good high school qualification, nearly half of the educational gap between those from poor and non-poor backgrounds. Hence improving management practices may be an important channel for reducing inequalities. |
| Keywords: | ES/T014431/1; ES/V009478/1; ES/S001735/1; Wiley deal |
| JEL: | J50 |
| Date: | 2024–03–22 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:122360&r=hrm |