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on Human Capital and Human Resource Management |
| By: | Timmermans, Oscar |
| Abstract: | This study examines the risk-taking properties associated with incentive plans that use relative performance evaluation, with a focus on the form of payout, whether in cash or shares. By analyzing determinants and consequences of payout form choice, I find that share-based plans offer risk-averse managers weaker incentives to pursue projects with idiosyncratic risk compared to cash plans. This occurs because share plans—unlike cash plans—expose managers to systematic performance trends, as payout values are linked to stock prices. Additionally, I document that the variation in risk-taking incentives depends on expected relative performance and the strength of the incentives. Overall, this study’s findings suggest that commonly used share-based relative performance plans might not always motivate managers to pursue innovative projects with high idiosyncratic risk when projects with systematic risk are available. |
| Keywords: | idiosyncratic and systematic risk; relative performance evaluation; cash bonuses; payout convexity; executive incentive-compensation |
| JEL: | G30 J33 M12 M41 |
| Date: | 2024–06–21 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:123696 |
| By: | Mengus, Eric (HEC Paris); Michalski, Tomasz Kamil (HEC Paris) |
| Abstract: | Specialized knowledge-generating jobs comprise close to one fifth of employment and one fourth of the wage bill in French manufacturing firms. They are positioned high in the firm hierarchy, horizontally aside upper-tier managers but are not managerial in nature. This escapes the patterns implied by the hierarchy view of the firm. Conditioning on firm size and shares of management workers, their higher shares in employment at the firm level are correlated with more innovation and intangible capital, greater product complexity, higher revenue and quantity total factor productivity and profitability. This suggests that firms use specialized knowledge workers to generate within-firm knowledge and create firm capabilities. Consistently, we model firms as organizations where efficient production of higher-value added, complex goods requires information acquisition by within-firm knowledge workers to develop capabilities beyond those created by management and hierarchies. |
| Keywords: | firm organization; complexity; productivity; knowledge generation; capabilities. |
| JEL: | D23 D24 D83 J24 L20 M10 M50 |
| Date: | 2023–01–20 |
| URL: | https://d.repec.org/n?u=RePEc:ebg:heccah:1468 |
| By: | Anastasia Danilov; Ju Yeong Hong; Anja Schöttner |
| Abstract: | A significant portion of the workforce experiences what we term `unfriendly leadership, ' encompassing various forms of hostile behavior exhibited by managers. The motivations driving managers to adopt such behaviors are insufficiently understood. To explore this phenomenon, we conducted a laboratory experiment examining the relationship between managers' use of unfriendly leadership and labor market competition. We discern two labor market states: excess labor demand, where managers compete to hire workers, and excess labor supply, where workers compete to be hired. By perceiving unfriendly leadership as a performance-contingent punishment device inflicting discomfort on workers, we hypothesize that managers are less inclined to resort to unfriendly leadership when they compete to hire workers. We find that managers tend to engage in unfriendly leadership more frequently and intensely under excess labor supply, in comparison to excess labor demand. This trend is particularly pronounced among male participants. Additionally, workers display a decreased likelihood of accepting employment offers from more unfriendly managers and exert lower levels of effort when working under such managers, indicating that unfriendly leadership is costly. |
| Keywords: | leadership style, labor market competition, non-monetary incentives |
| JEL: | L20 M14 M55 |
| Date: | 2024–07–16 |
| URL: | https://d.repec.org/n?u=RePEc:bdp:dpaper:0042 |
| By: | Teevrat Garg; Maulik Jagnani; Elizabeth Lyons |
| Abstract: | Despite the increasing importance of occupations that rely heavily on interpersonal interaction, the impact of heat on team production relative to individual production remains largely unexplored. Heat can affect team and individual production in distinct ways, potentially increasing aggression, thereby complicating team coordination. Conversely, teams may counteract the productivity effects of heat through mutual support strategies, such as sharing tasks, identifying mistakes, or encouragement. We randomly assign programmers to either pair up in teams of two or work independently on a coding task, under either warm (29◦C) or control (24◦C) conditions. Our findings reveal two key insights: (1) Individuals working on coding tasks in warm environments perform comparably to those in control environments. However, teams working in warm conditions significantly underperform relative to teams in control settings. (2) The adverse effects of heat are particularly pronounced in mixed-gender teams and teams with differences in semester-standing, indicating that heat may intensify issues related to coordination and communication within heterogenous teams. Surveys confirm these patterns, with heterogenous teams in warm settings reporting lower partner assessments and a higher desire to switch partners for future tasks. |
| Keywords: | team production, heat stress, labor productivity |
| JEL: | J24 Q54 Q56 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11219 |
| By: | Richard Audoly; Manudeep Bhuller; Tore Adam Reiremo |
| Abstract: | How informative are job ads about the actual pay and amenities offered by employers? Using a comprehensive database of job ads posted by Norwegian employers, we develop a methodology to systematically classify the information on both pay and non-pay job attributes advertised in vacancy texts. We link this information to measures of employer attractiveness, which we derive from a job search model estimated on observed wages and worker mobility flows. About 55 percent of job ads provide information related to pay and nearly all ads feature information on non-pay attributes. We show that publicly advertised job attributes are meaningful predictors of employer attractiveness, and non-pay attributes are about as predictive as pay-related attributes. High-pay employers mention pay-related attributes more often, while high-amenity employers are more likely to advertise flexible working hours and contract duration. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2407.13204 |
| By: | Cnossen, Femke; Nikolova, Milena |
| Abstract: | Self-determination theory posits that individuals are motivated at work when their inherent psychological needs for competence, autonomy, and relatedness are satisfied. Drawing on this theory, this paper presents a new conceptual model explaining how work meaningfulness influences effort at work. In our model, motivation decreases the disutility of exerting effort and paves the way for experiencing meaningful work, which, in turn, boosts effort. We find empirical support for our model's propositions using new data from the Dutch LISS panel. Specifically, work meaningfulness is positively associated with effort. We also show that selfdetermination enhances work meaningfulness, especially for individuals experiencing high levels of competence, autonomy, and relatedness. Overall, our findings suggest that satisfying workers' psychological needs from working enhances work meaningfulness, motivation, and effort, providing valuable insights for economic models of effort and productivity. |
| Keywords: | Meaningful work, Motivation, Non-monetary benefits of work, Labor market outcomes, Self-determination theory |
| JEL: | J01 J30 J32 J81 I30 I31 M50 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1476 |