A long-running debate in the small firms' literature questions the value of formal 'human resource management' (HRM) practices which have been linked to high performance in larger firms. We contribute to this literature by exploiting linked employer-employee surveys for 2004 and 2011. Using employees' intrinsic job satisfaction and organizational commitment as motivational outcomes we find the returns to small firm investments in HRM are U-shaped. Small firms benefit from intrinsically motivating work situations in the absence of HRM practices, find this advantage disturbed when formal HRM practices are initially introduced, but can restore positive motivation when they invest intensively in HRM practices in a way that characterizes 'high performance work systems' (HWPS). Although the HPWS effect on employee motivation is modified somewhat by the Great Recession, it remains rather robust and continues to have positive promise for small firms.
Using a panel of workplaces in Britain, we investigate the implications for businesses of employing older workers. Workplace labor productivity falls where the proportion of older or younger workers rises. These raw associations are attenuated somewhat after controlling for aspects of human capital. In contrast, there is no significant association between age shares and workplace financial performance, suggesting that any reluctance by employers to employ greater numbers of older workers may be misplaced.
Employee share purchase plans (ESPPs) give free or discounted shares of stock to workers who buy shares in the hope that the greater share ownership will retain workers, build loyalty and raise productivity, as in gift exchange models. Using measures of workers' organizational loyalty and sense of ownership in a multinational firm that puts the ESPP at the heart of its compensation policy, we find that workers who join the ESPP have lower turnover intentions and do less on-the-job search than others, motivated in part by gift exchange reciprocity, and also respond to the group incentive of ownership with greater work effort, longer hours, and lower absence rates. Workers in workplaces with high perceived rates of ESPP participation are more likely to intervene against shirkers. The results appear robust to the selectivity of who joins the ESPP. The mix of gifting shares to workers who buy shares and the group incentive of ownership makes ESPPs a unique dual form of compensation.
Theory suggests that performance pay (PP) can align employees' interests with those of the employer and attract high‐ability workers and incentivise effort but that it may be less effective in the public sector. However, empirical evidence on its incidence and effects is largely confined to the private sector. We find that half the 20 percentage point gap in PP incidence in Britain between the public and private sectors is accounted for by differences in occupational composition. The gap falls to 8 percentage points when ‘matching’ employees in both sectors on their demographic and job characteristics. PP is linked to positive job attitudes among private sector employees, but not among observationally equivalent public sector employees. Furthermore, PP is negatively correlated with workplace performance in the public sector. These findings raise important questions about public policies promoting PP in the public sector.
That football Head Coaches will be dismissed for poor performance and will quit when they have better outside options seems obvious. But owners may find it hard to distinguish poor performance from bad luck and may find it difficult to identify and attract talented Head Coaches from other clubs even if their current Head Coach is performing below expectations. Equally, Head Coaches may have few options to move to better clubs even when they are performing well. Using rich data on Head Coach characteristics we identify determinants of quits and dismissals across four professional football leagues over the period 2002–2015. We find that Head Coaches’ probabilities of dismissal are significantly lower when the team is performing above expectations, with the effect strongest for recent games. However, in contrast to earlier studies, we find that performing above expectations also reduces the probability of Head Coach quits. Head Coach success in the past, as well as Head Coach experience, reduce the probability of being dismissed, even when conditioning on team performance, suggesting Head Coach human capital has some ‘protective’ effect in managerial careers. Past experience has little effect on quit probabilities—with the exception of tenure at the current employer, which is associated with lower quit rates. We test the robustness of our results by confining estimates to first exits, within-season departures and by dealing with unobserved Head Coach heterogeneity.
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We show that worker wellbeing is determined not only by the amount of compensation workers receive but also by how compensation is determined. While previous theoretical and empirical work has often been preoccupied with individual performance-related pay, we find that the receipt of a range of group-performance schemes (profit shares, group bonuses and share ownership) is associated with higher job satisfaction. This holds conditional on wage levels, so that pay methods are associated with greater job satisfaction in addition to that coming from higher wages. We use a variety of methods to control for unobserved individual and job-specific characteristics. We suggest that half of the share-capitalism effect is accounted for by employees reciprocating for the “gift”; we also show that share capitalism helps dampen the negative wellbeing effects of what we typically think of as “bad” aspects of job quality.
This article looks at the financial resources of trade unions in the UK. The core argument is that trade unions are subject to 'cost disease' pressures such that costs rise over the long term above the general level of inflation. They have this property because of the difficulty in solving first-and second-order collective action problems. First-order problems refer to the problems of initiating collective action and second-order problems refer to the management of collective action organizations. Both UK aggregate and case-study data -from one of the largest UK unions, Unite -are presented to illustrate the cost disease problem and to suggest options for its management. In conclusion, the wider implications of 'cost disease' pressures for unions are assessed.
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