HR
Feng Li & Venky Nagar
Management Science, forthcoming
Abstract:
This study measures the performance of U.S. firms initiating same sex domestic partnership benefit (SSDPB) policies. The results show that holding these firms upon their SSDPB initiation in a calendar portfolio earns a four-factor annualized excess return (alpha) of approximately 10% over the 1995-2008 sample period, beating 95% of all professional mutual funds in the United States. This finding is robust to several tests of reverse causality. SSDPB adopters also show significant improvement in operating performance relative to nonadopters.
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Zakary Tormala, Jayson Jia & Michael Norton
Journal of Personality and Social Psychology, forthcoming
Abstract:
When people seek to impress others, they often do so by highlighting individual achievements. Despite the intuitive appeal of this strategy, we demonstrate that people often prefer potential rather than achievement when evaluating others. Indeed, compared with references to achievement (e.g., "this person has won an award for his work"), references to potential (e.g., "this person could win an award for his work") appear to stimulate greater interest and processing, which can translate into more favorable reactions. This tendency creates a phenomenon whereby the potential to be good at something can be preferred over actually being good at that very same thing. We document this preference for potential in laboratory and field experiments, using targets ranging from athletes to comedians to graduate school applicants and measures ranging from salary allocations to online ad clicks to admission decisions.
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Timothy Ketelaar et al.
Evolutionary Psychology, Summer 2012, Pages 371-397
Abstract:
Across four studies, the current paper demonstrates that smiles are associated with lower social status. Moreover, the association between smiles and lower status appears in the psychology of observers and generalizes across two forms of status: prestige and dominance. In the first study, faces of fashion models representing less prestigious apparel brands were found to be more similar to a canonical smile display than the faces of models representing more prestigious apparel brands. In a second study, after being experimentally primed with either high or low prestige fashion narratives, participants in the low prestige condition were more likely to perceive smiles in a series of photographs depicting smiling and non-smiling faces. A third study of football player photographs revealed that the faces of less dominant (smaller) football players were more similar to the canonical smile display than the faces of their physically larger counterparts. Using the same football player photographs, a fourth study found that smiling was a more reliable indicator of perceived status-relevant personality traits than perceptions of the football players'
physical sizes inferred from the photographs.
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Performance, Expectations, and Managerial Dismissal: Evidence From The National Football League
David Allen & Clint Chadwick
Journal of Sports Economics, forthcoming
Abstract:
Researchers in many disciplines have shown that lower overall firm performance motivates the termination of top managers. Some have also suggested that managerial dismissal stems particularly from shortfalls of performance relative to expectations, whether in relation to corporate executives or the managers of professional sports teams. But relatively few have investigated the role of expectations empirically, owing to difficulties in measuring them. In this article, we address this question theoretically by framing the interaction of performance, expectations, and the use (and potential dismissal) of managers as a labor demand problem, using applied microeconomic tools to demonstrate how variation in expectations and performance can alter how a National Football League (NFL) organization employs player and coaching talent. Empirically, we take advantage of an institutional change - the NFL's adoption of a salary cap and free agency in the early 1990s - to isolate an exogenous change in performance expectations. While the salary cap constrained the amount clubs could spend annually on player talent, it placed no constraint on expenditures for managerial (coaching) talent. This may have led clubs to allocate more resources toward coaching talent and consequently place higher expectations on head coaches, resulting in a greater probability of dismissal in the postcap period. Using data on NFL head coaches from 1979 to 2006 and probit models of turnover, we find that the probability of coach dismissal increased in the postcap era and that concrete measures of an organization's player talent, coaching talent, and on-field performance gained importance as determinants of turnover from the pre- to the postcap era, indicative of increased expectations.
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Daily Horizons: Evidence of Narrow Bracketing in Judgment from 10 years of MBA-admission Interviews
Uri Simonsohn & Francesca Gino
Psychological Science, forthcoming
Abstract:
Many professionals, from auditors and lawyers, to clinical psychologists and journal editors, divide continuous flows of judgments into subsets. College admissions interviewers, for instance, evaluate but a handful of applicants a day. We conjectured that in such situations individuals engage in narrow bracketing, assessing each subset in isolation, and then avoid deviating much - for any given subset - from the expected overall distribution of judgments. For instance, an interviewer who has already highly recommended three applicants on a given day may be reluctant to do so for a fourth applicant. Data from over 9000 MBA interviews supported this prediction. Auxiliary analyses suggest that contrast effects and non-random scheduling of interviews are unlikely alternative explanations.
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Chief Executive Pay and Remuneration Committee Independence
Ian Gregory-Smith
Oxford Bulletin of Economics and Statistics, August 2012, Pages 510-531
Abstract:
This article tests the impact of remuneration committee independence on Chief Executive (CEO) pay. FTSE350 companies between 1996 and 2008 are used to assess whether remuneration committees facilitate optimal contracting or whether CEOs capture the pay-setting process and inflate their own remuneration. This panel has a number of advantages over prior samples and, in particular, contains a more comprehensive assessment of non-executive directors' independence. No evidence of a relationship between CEO pay and director independence is found, challenging the theory of managerial power and the received wisdom of institutional guidance.
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The Behavioralist Visits the Factory: Increasing Productivity Using Simple Framing Manipulations
Tanjim Hossain & John List
Management Science, forthcoming
Abstract:
Recent discoveries in behavioral economics have led to important new insights concerning what can happen in markets. Such gains in knowledge have come primarily via laboratory experiments-a missing piece of the puzzle in many cases is parallel evidence drawn from naturally occurring field counterparts. We provide a small movement in this direction by taking advantage of a unique opportunity to work with a Chinese high-tech manufacturing facility. Our study revolves around using insights gained from one of the most influential lines of behavioral research - framing manipulations - in an attempt to increase worker productivity in the facility. Using a natural field experiment, we report several insights. For example, conditional incentives framed as both "losses" and "gains" increase productivity for both individuals and teams. In addition, teams more acutely respond to bonuses posed as losses than as comparable bonuses posed as gains. The magnitude of this framing effect is roughly 1%: that is, total team productivity is enhanced by 1% purely due to the framing manipulation. Importantly, we find that neither the framing nor the incentive effect lose their significance over time; rather, the effects are observed over the entire sample period. Moreover, we learn that repeated interaction with workers and conditionality of the bonus contract are substitutes for sustenance of incentive effects in the long run.
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Lawyers' Lines of Work: Specialization's Role in the Income Determination Process
Erin Leahey & Laura Hunter
Social Forces, June 2012, Pages 1101-1131
Abstract:
Income inequality has been increasing in the United States, and intraoccupational processes are partly responsible (Kim and Sakamoto 2008; Mouw and Kalleberg 2010). To date, scholars have focused on suboccupational divisions, such as specialty areas, to understand why some members of an occupation earn more than others. In this article we theorize, operationalize, and assess the economic effect of another way in which members of the same profession can be distinguished: by the extent to which they specialize. Using two large secondary datasets on lawyers in the United States, we find that lawyers who specialize earn more. This effect arises partly through two mechanisms - individual productivity and firm size - and depends upon specialty area prestige: lawyers in low-prestige areas actually benefit more from specializing.
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Workplace violence and the changing nature of work in Europe: Trends and risk groups
Seth van den Bossche et al.
European Journal of Work and Organizational Psychology, forthcoming
Abstract:
Incidence rates of third party workplace violence in Europe have increased, but little is known about the causes thereof. It has been suggested that the growth of the service sector and the intensification of work could be responsible for the increase. This study aimed to identify trends in the prevalence of physical workplace violence across Europe, as well as to uncover factors explaining these trends. Three cross-sectional waves (1995, 2000, and 2005) of the European Working Conditions Survey were used, involving 58,520 workers and covering 15 European member states. Logistic regression analyses were performed to investigate associations between work characteristics and violence prevalence. Workplace violence increased significantly during the study interval. Although violence was clearly related to specific characteristics of the labour market (gender, age, sector, etc.) and the work environment (client contact frequency, time pressure, control, and computer work), recent changes in the European labour market composition and work environment could not explain the increase in violence. In jobs characterized by high levels of computer work in particular, violence appears to be an emerging risk. Our results suggest that the nature (and perhaps quality) of client contact is changing, leading to higher violence risks.
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Sabine Sonnentag & Adam Grant
Personnel Psychology, Autumn 2012, Pages 495-530
Abstract:
When and why does the experience of helping others at work spill over into positive affect at home? This paper presents a within-person examination of the association between perceived prosocial impact at work and positive affect at home, as well as the psychological mechanisms that mediate this relationship. Sixty-eight firefighters and rescue workers completed electronic diaries twice a day over the course of 1 working week. Random-coefficient modeling showed that perceived prosocial impact predicted positive affect at bedtime. This relationship was mediated by perceived competence at the end of the working day and positive work reflection during after-work hours but not by positive affect at the end of the working day. The findings demonstrate that the experience of helping others at work has delayed emotional benefits at home that appear to be channeled through the cognitive mechanisms of perceived competence and reflection rather than through an immediate affective boost.
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The Effects of Promotions on Heart Disease: Evidence from Whitehall
Michael Anderson & Michael Marmot
Economic Journal, June 2012, Pages 555-589
Abstract:
The positive relationship between SES and health is well documented but limited evidence exists regarding the effect of an exogenous manipulation of SES on health. This article estimates the effect of promotions on heart disease using data on British civil servants from the Whitehall II study. Differences in promotion rates across departments and cohorts generate plausibly exogenous variation in promotion opportunities. The results suggest that promotions may reduce the probability of developing heart disease by 2.6-12.8 percentage points over a 15-year period. These estimates appear robust and are several times larger than cross-sectional estimates.
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Do NFL Player Earnings Compensate for Monopsony Exploitation in College?
Robert Brown
Journal of Sports Economics, forthcoming
Abstract:
This paper examines the extent to which a college player's future income in professional football offsets his monopsony exploitation experienced at the college level. Stated differently, it attempts to measure whether a future NFL draftee's professional earnings compensates for his monopsony-induced loss in income at the college level. This is an important issue in the debate surrounding compensating college players, opposed by many on grounds that the top college players ultimately receive lucrative financial rewards as professionals. First, this paper uses a quantile regression method to account for differences in player marginal revenue products across college teams with different revenue-generating capabilities; for instance, players at high-revenue college teams produce higher marginal revenue products and thereby experience greater degrees of monopsony exploitation to overcome at the professional level. Next, it approximates professional players' earning profiles using NFL salary data, and then weighs these earnings against a player's foregone college compensation resulting from monopsony-induced restrictions in college football. The results indicate that between 33 and 38 percent of this sample of players (active and inactive) will earn NFL incomes sufficient to offset their monopsony-lost college earnings: A handful of these NFL players earn huge net surpluses but most can expect more modest net earnings.
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Jennifer Carson Marr et al.
Organizational Behavior and Human Decision Processes, March 2012, Pages 285-297
Abstract:
We investigated the psychological and social consequences associated with individuals' motivation to search for information about whether they have been indirectly harmed by members of their group. Consistent with a motivated social cognition perspective, group members who were either chronically (Study 1a) or temporally (Study 1b) high in the motivation to acquire relationship-threatening information (MARTI) made more sinister attributions in ambiguous situations and entertained more paranoid cognitions about their coworkers. Moreover, paranoid cognitions about coworkers mediated the relationship between MARTI and suspicion behaviors toward coworkers (Study 2). Consistent with a social interactionist perspective, others chose to exclude prospective group members who were high in MARTI from joining the group and planned to reject them if they became group members (Study 3). Others' social rejection of the focal group member was predicted by their anger toward group members who were high in MARTI (Study 4).
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Glenn Dutcher
Journal of Economic Behavior & Organization, forthcoming
Abstract:
In an effort to cut costs and improve worker morale, corporations are increasingly turning to telecommuting. Conflicting reports exist though on the effects that working outside the office has on productivity which directly affects a company's bottom line. This study explores these controversies using an experimental approach. Creative and dull individual tasks were used to mimic two extreme work climates. Results of this study indicate that the telecommuting environmental effects may have positive implications on productivity of creative tasks but negative implications on productivity of dull tasks.
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Do boards know when they hire a CEO that is a good match? Evidence from initial compensation
Sam Allgood, Kathleen Farrell & Rashiqa Kamal
Journal of Corporate Finance, December 2012, Pages 1051-1064
Abstract:
Are CEO initial compensation packages based on variations in the expected match quality of the hiring firms? Using CEO tenure as a proxy for expected match quality, and a sample of CEO turnovers between 1992 and 2006, we find that CEOs that experience good matches, defined as tenures exceeding four years, have higher initial compensation packages. We also find evidence from exogenous switching regression models that inside CEOs receive a higher good match premium than outside CEOs. To account for economic and regulatory changes across our sample period, we divide our sample into three subsamples: 1992-1997, 1998-2002, and 2003-2006, and repeat our analyses. Even though the positive relation between expected match quality and initial compensation persists across all periods, we find that the good match premium for inside and outside CEOs does not differ in the post-2002 period. We attribute this result to increased board independence and changes in regulation (Sarbanes-Oxley) in the post-2002 sample period.
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Celeste Wilderom, Peter van den Berg & Uco Wiersma
Leadership Quarterly, forthcoming
Abstract:
We investigated the combined effects of charismatic leadership and organizational culture on perceived and objective company performance using a longitudinal design. Employees (N = 1214) in 46 branches of a large Dutch bank rated branch management on charismatic leadership, organizational culture in terms of work practices, as well as perceived organizational performance. Objective performance data were collected twice, two years apart. The split sample technique attenuated common source bias. Results of structural equation modeling, in which Time 1 financial performance measures were controlled, revealed that charisma increased financial performance; however culture did not do so. Culture and charisma were significantly related to perceived performance, and culture and charisma were interrelated. A longer time interval may be necessary before the effects of culture on financial performance become apparent. The findings are discussed against the backdrop of the value of intangible resources.
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Hans van Dijk, Marloes van Engen & Daan van Knippenberg
Organizational Behavior and Human Decision Processes, September 2012, Pages 38-53
Abstract:
Conventional wisdom in the diversity literature holds that job-related dimensions of diversity are the domain of positive performance, whereas demographic dimensions of diversity are the domain of negative performance effects. In a meta-analysis (N = 146 studies, 612 effect sizes), we show that this conclusion may be based on rater biases; it does not apply to studies involving more objective assessments of performance, assessments that cannot be influenced by knowledge of a team's composition. We also show that the influence of job-related diversity is moderated by task complexity and that job-related diversity is more positively related to innovative performance than to in-role performance. We discuss how these results invite a reconsideration of the role of the job-related/demographic diversity distinction and provide suggestions on how to further advance our understanding of diversity's effects.