Behavioral and personnel economics
Articles in behavioral economics discuss the emotional and cognitive factors that influence the decisions of actors, in particular employers and employees. Personnel economics analyzes the internal organizational strategy of the firm and the human resource management practices chosen to pursue that strategy.
editorial team
Subject Editor
California State University East Bay, USA
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Managerial quality and worker productivity in developing countries
Business consulting and supervisory skills training can improve firm productivity and labor relations
Achyuta Adhvaryu, February 2018Productivity differences across firms and countries are surprisingly large and persistent. Recent research reveals that the country-level distributions of productivity and quality of management are strikingly similar, suggesting that management practices may play a key role in the determination of worker and firm productivity. Understanding the causal impacts of these practices on productivity and the effectiveness of various management interventions is thus of primary policy interest.MoreLess -
性别diversity in teamsUpdated
Greater representation of women may better represent women’s preferences but may not help economic performance
Ghazala Azmat, May 2019女性的代表公司董事会,political committees, and other decision-making teams is increasing, this is in part because of legal mandates. Evidence on team dynamics and gender differences in preferences (for example, risk-taking behavior, taste for competition, prosocial behavior) shows how gender composition influences group decision-making and subsequent performance. This works through channels such as investment decisions, internal management, corporate governance, and social responsibility.MoreLess -
Multitasking at work: Do firms get what they pay for?
Rewarding only one dimension of performance may result in employees ignoring other dimensions
Ann P. Bartel, May 2017To align employees’ interests with the firm’s goals, employers often use performance-based pay, but designing such a compensation plan is challenging because performance is typically multifaceted. For example, a sales employee should be incentivized to sell the company’s product, but a focus on current sales without rewarding the salespeople according to the quality of the product and/or customer service may result in fewer future sales. To solve this problem, firms often increase the number of metrics by which they evaluate their employees, but complex compensation plans may be difficult for employees to understand.MoreLess -
How is new technology changing job design?Updated
Machines’ ability to perform cognitive, physical, and social tasks is advancing, dramatically changing jobs and labor markets
Michael Gibbs Sergei Bazylik, August 2022The IT revolution has had dramatic effects on jobs and the labor market. Many routine manual and cognitive tasks have been automated, replacing workers. By contrast, new technologies complement and create new non-routine cognitive and social tasks, making work in such tasks more productive, and creating new jobs. This has polarized labor markets: while low-skill jobs stagnated, there are fewer and lower-paid jobs for middle-skill workers, and higher pay for high-skill workers, increasing wage inequality. Advances in AI may accelerate computers’ ability to perform cognitive tasks, heightening concerns about future automation of even high-skill jobs.MoreLess -
Working-time autonomy as a management practice
Giving workers control over their working hours increases their commitment and benefits firm performance
Michael Beckmann, January 2016Allowing workers to control their work hours (working-time autonomy) is a controversial policy for worker empowerment, with concerns that range from increased shirking to excessive intensification of work. Empirical evidence, however, supports neither view. Recent studies find that working-time autonomy improves individual and firm performance without promoting overload or exhaustion from work. However, if working-time autonomy is incorporated into a system of family-friendly workplace practices, firms may benefit from the trade-off between (more) fringe benefits and (lower) wages but not from increased productivity.MoreLess -
High involvement management and employee well-being
Giving employees more discretion at work can boost their satisfaction and well-being
Petri Böckerman, July 2015A wide range of high involvement management practices, such as self-managed teams, incentive pay schemes, and employer-provided training have been shown to boost firms’ productivity and financial performance. However, less is known about whether these practices, which give employees more discretion and autonomy, also benefit employees. Recent empirical research that aims to account for employee self-selection into firms that apply these practices finds generally positive effects on employee health and other important aspects of well-being at work. However, the effects can differ in different institutional settings.MoreLess -
Efficient markets, managerial power, and CEO compensationUpdated
CEO pay, often contentious, is the product of many forces
Michael L. Bognanno, February 2019The escalation in chief executive officer (CEO) pay over recent decades, both in absolute terms and in relation to the earnings of production workers, has generated considerable attention. The pay of top executives has grown noticeably in relation to overall firm profitability. The pay gap between CEOs in the US and those in other developed countries narrowed substantially during the 2000s, making top executive pay an international concern. Researchers have taken positions on both sides of the debate over whether the level of CEO pay is economically justified or is the result of managerial power.MoreLess -
Relative pay, effort, and labor supply
Comparisons to others’ pay and to one’s own past earnings can affect willingness to work and effort on the job
Anat Bracha, June 2017最近的研究表明,即使是不相关的亲戚pay information—earnings compared to the past or to others—significantly affects workers’ willingness to work (labor supply) and effort. This effect stems mainly from those whose pay compares unfavorably; accordingly, earning less compared to others or less than in the past significantly reduces one’s willingness to work and effort exerted on the job. Comparing favorably, however, has mixed effects—with usually no effect on effort, but positive or no effects on labor supply. Understanding when relative pay increases labor supply and effort can thus help firms devise optimal payment structures.MoreLess