Quarterly Personnel Update-- 2022_06
Peter Kuhn
- the site is searchable at any time for key and recent articles on any personnel topic
- all references are linked for easy access
- newcomers can sign up for email updates on the site
5.7: Ratchet Effects
Abeler, Johannes, David Huffman and Collin Raymond Incentive Complexity, Bounded Rationality and Effort Provision, unpublished manuscript, University of Toronto, (2021).
The authors study worker performance in a real workplace, where better performance today reduces the worker’s pay rate in the future via an adjustment formula. They show that the firm can prevent worker effort restriction by obscuring the connection between performance today and pay tomorrow, so it is hard for workers to understand.
6. Optimal Monitoring
Cai, Jing and Shing-Yi Wang 2022 Improving Management Through Worker Evaluations: Evidence from Auto Manufacturing Quarterly Journal of Economics, forthcoming
Using a randomized experiment with an automobile manufacturing firm in China, we measure the effects of letting workers evaluate their managers every month on worker and firm outcomes. We find that providing worker feedback to managers leads to significant reductions in worker turnover and increases in team-level productivity. In addition, workers report higher levels of happiness and well-being.
9.2 Intrinsic, Symbolic and Image Motivation
Ellingsen, Tore and Magnus Johannesson 2007 Paying Respect Journal of Economic Perspectives Vol. 21, No. 4, pp. 135-150
In this review article, the authors draw on a large body of evidence to make the case that respect matters in the workplace, above and beyond material rewards. They show that workers respond to attention, symbolic rewards, and trust. In addition, introducing material incentives when these rewards are present can sometimes reduce effort. The authors’ approach is an early example of behavioral agency theory in personnel economics.
10.6 Trust and the Cost of Control
De Chiara, Alessandro, Florian Engl, Holger Herz, and Ester Manna. 2022 Control Aversion in Hierarchies CESifo Working Paper No. 9779, June 2022
The authors use a lab experiment to test whether hierarchical distance of superiors who impose controls on workers affects workers’ reactions to being controlled. They find that hierarchical proximity magnifies control aversion and discuss several potential channels for this result.
10.7 Fairness Among Workers
Peer Effects:
Lindquist, Matthew J., Jan Sauermann, and Yves Zenou 2022 Peer Effects in the Workplace: A Network Approach IZA discussion paper no. 15131
Using data from the in-house call center of a multinational mobile network operator, the authors find that a 10% increase in co-worker current productivity increases worker productivity by 5.3%. In contrast, a 10% increase in co-worker permanent productivity decreases worker productivity by 3.2%. Some of the latter effect is explained by older workers, low tenure workers, and low-permanent productivity workers free-riding on co-workers with high levels of permanent productivity. The authors suggest a way to re-shuffling workers into different teams to reduce this type of free-riding.
Brune, Lasse, Eric Chyn, and Jason Kerwin Peers and Motivation at Work: Evidence from a Firm Experiment in Malawi Journal of Human Resources, 57(4):1147-1177.
The authors randomly vary work assignments at a tea estate in Malawi. They find that increasing mean peer ability by 10 percent raises productivity by 0.3 percent. This effect is driven by the responses of women. They argue that these effects are driven by “motivation”: Given the choice to be reassigned, most workers prefer working near high-ability coworkers because these peers motivate them to work harder.
14: Recruitment: Formal versus Informal? Broad versus Narrow?
Michelman, Valerie, Joseph Price, and Seth D. Zimmerman Old Boys’ Clubs and Upward Mobility Among the Educational Elite” Quarterly Journal of Economics, Volume 137, Issue 2, May 2022, Pages 845–909.
The authors use random variation in room assignment for Harvard students in the 1920s and 1930s to study whether exposure to high-status peers expands gaps in a number of outcomes, including finance careers by high school type, with large positive effects for private school students and zero or negative effects for others.
16.1 Detecting Discrimination
Egan, Mark, Gregor Matvos and Amit Seru. 2022 When Harry Fired Sally: The Double Standard in Punishing Misconduct Journal of Political Economy, volume 130, number 5, May 2022.
The authors study gender differences in punishment for misconduct in the financial advisory industry. There is a “gender punishment gap”: following an incident of misconduct, female advisers are 20% more likely to lose their jobs and 30% less likely to find new jobs, relative to male advisers. The gender punishment gap is not driven by gender differences in occupation, productivity, nature of misconduct, or recidivism. The punishment gap is smaller in firms with a greater percentage of female managers and executives. The authors also find that men are more tolerant of members of their own ethnic group when those members commit misconduct.
Kline, Patrick, Evan K Rose, Christopher R Walters 2022. Systemic Discrimination Among Large U.S. Employers Quarterly Journal of Economics, forthcoming.
The authors use a massive nationwide correspondence experiment that sent more than 83,000 fictitious applications to jobs posted by 108 of the largest U.S. employers. Their goal is to see whether individual firms tend to discriminate more than other firms; they find that discrimination against resumes with distinctively Black names is concentrated among a select set of large employers, many of which can be identified with high confidence using large-scale inference methods.
16.3 Effects of Discrimination
Caselli, Mauro, Paolo Falco, and Gianpiero Mattera 2022. When the Stadium Goes Silent: How Crowds Affect the Performance of Discriminated Groups Journal of Labor Economics, forthcoming
Using a natural experiment induced by COVID-19, the authors test how the sudden absence of fans at football games impacts player performance in Italy. They find that African players, who are most commonly targeted by racial harassment, play better when fans are no longer at the stadium. Using official records of racist behavior by fans, they also show that performance improves the most in teams that were subject to abuse before the lockdown. Thus, exposure to racist pressure reduces the productivity of the workers (i.e. players) on these teams.
Folke, Olle and Johanna Rickne 2022 Sexual Harassment and Gender Inequality in the Labor Market Quarterly Journal of Economics, forthcoming
The authors combine nationally representative survey data and administrative data to show that both harassment and wages vary strongly and systematically across workplaces. Women self-report more harassment from colleagues and managers in male-dominated workplaces where wages are relatively high, and men self-report more harassment in female-dominated workplaces where wages are low. These patterns reinforce the gender wage gap, because women avoid high-wage jobs, men avoid lower-wage jobs, in both cases to avoid harassment.
16.4 Reducing Bias in Employee Evaluation
Mocanu, Tatiana 2022 Designing Gender Equity: Evidence from Hiring Practices and Committees unpublished paper, University of Illinois at Urbana-Champaign.
The author uses tens of millions of high-dimensional, unstructured records on hiring in Brazil’s public sector into study the effects of a policy reform that required the use of more impartial hiring practices, She finds that increasing screening impartiality improves women’s evaluation scores, application rates, and probability of being hired. The reforms that were most effective in raising women’s hiring chances were i) adding blind written tests to subjective hiring methods like interviews, or ii) converting subjective methods into only blind written tests. Gender-balanced hiring committees also induce male evaluators to become more favorable toward female candidates in subjective stages.
17: Setting Pay: Monopsony Models
Stansbury, Anna, Gregor Schubert and Bledi Taska 2022 “Employer Concentration and Outside Options” MIT, unpublished paper
The authors study the effect of within-occupation employer concentration and outside-occupation job options on wages in the US, identifying outside-occupation options using new occupational mobility data from 16 million resumes. They find that moving from a median level of employer concentration to the 95th percentile reduces wages by 2.6% overall. This effect is much stronger (7.3%) for workers with few job options outside their own occupation. The authors argue that policymakers pay attention to employer concentration, but should also consider the availability of outside-occupation options to identify situations where employer concentration is likely to have the most detrimental effects on wages.
18: Setting Pay: Efficiency Wages
Deferred compensation:
Oyer, P., and S. Schaefer, 2005, Why do some firms give stock options to all employees? An empirical examination of alternative theories Journal of Financial Economics 76, 99–133.
Standard principal-agent models make it hard to understand why some firms issue stock options to all employees, because free-rider problems are enormous in this context. The authors address this puzzle by considering three potential economic justifications for firm-wide stock options: providing incentives to employees, inducing employees to sort, and employee retention. They reject an incentives-based explanation for broad-based stock option plans, and conclude that sorting and retention explanations are the most likely explanations.
19: Training
Butrymowicz, Sarah and Meredith Kolodner 2022. Trucking Companies Train You on the Job. Just Don’t Try to Quit. New York Times, April 5, 2022.
This article describes recent contracts in the trucking industry that pay for workers’ training, but obligate workers to in return for a minimum stay with the employer.
27.2: Skill Diversity, Information Sharing, and Team Performance
Opper, Isaac M. Matthew D Baird, and John Engberg. 2022 Optimal Allocation of Seats in the Presence of Peer Effects: Evidence from a Job Training Program Journal of Labor Economics, forthcoming.
How should employers group workers into teams when there are peer effects on performance within teams? The author study this question using an RCT in job training programs for disadvantaged adults in the United States. They find large peer effects: An individual trained in a class with average labor market history one standard deviation above the average is 15 percentage points more likely to be employed in the six quarters post-training than an identical individual trained in a cohort with average labor market history one standard deviation below the average. Given these interactions, the authors propose productivity-increasing way to assign trainees to classes in this context.