Personnel Economics. Job Design. (Chapters 7 & 8) Nicole Schneeweis (JKU Linz) Personnel Economics 1 / 26

Transcription

1 Personnel Economics Job Design (Chapters 7 & 8) Nicole Schneeweis (JKU Linz) Personnel Economics 1 / 26

2 Open Questions How are jobs designed? What tasks are combined into jobs? In what cases is multitasking better than specialization? What are the advantages and disadvantages of teams? What is free-riding? Do social norms change production in teams? How have jobs changed in the past decades? Nicole Schneeweis (JKU Linz) Personnel Economics 2 / 26

3 Job Design: How can jobs be characterized? Skills Ability and human capital required to do the job Discretion Number of decisions that an employee has to make (decentralized decision making) Multitasking Number of tasks that are bundled in a job Interdependence How close is the job related to other jobs in the company? (connectedness) Nicole Schneeweis (JKU Linz) Personnel Economics 3 / 26

4 Job Design: Job characteristics Nicole Schneeweis (JKU Linz) Personnel Economics 4 / 26

5 Job Design: How are jobs structured? Relationship between the characteristics? Coherent (complements) or incoherent (substitutes) Correlation of characteristics: actual/predicted probability actual probability: fraction of jobs in the sample eg. the fraction of all jobs are LLLL (low in all four dimensions) predicted probability: if there were no relationship eg. Prob(LLLL) = 0.251*0.190*0.194* LLLL can be observed around 32-times as frequently as predicted = Job characteristics are positively correlated = Complements Nicole Schneeweis (JKU Linz) Personnel Economics 5 / 26

6 Job Design: Organizational change Organizational change = Jobs: more tasks, responsibility and required skills Nicole Schneeweis (JKU Linz) Personnel Economics 6 / 26

7 Job Design: Skills, tasks & decisions Scope of skills (tasks that can be performed) Increases exibility: helping out (more important in small rms) Facilitates communication: knowledge and understanding other jobs Furthers innovation: knowledge about many aspects of production enables workers to be innovative less resistance to changes in tasks and if certain tasks get obsolete Scope of tasks (tasks that are performed) = specialization vs multitasking Specialization (division of labor) Adam Smith's Wealth of Nations (1776): pin factory important characteristic of modern societies perfection, time saving, specialized human capital and training more important in large rms Nicole Schneeweis (JKU Linz) Personnel Economics 7 / 26

8 Job Design: Skills, tasks & decisions Multitasking Decisions related tasks that need similar skills lower transaction costs (transportation, communication, bureaucracy) tasks are not independent but complementary (task B would be performed more ecient, if task A was performed) furthers innovation and on-the-job learning more dicult to evaluate performance (monitoring) intrinsic motivation (through the job) Multitasking requires and allows decentralized decision making = If tasks are complementary to each other, multitasking is reasonable. Multitasking requires high skills and allows learning on-the-job, which in turn enables employees to make decisions (see Table 7.1) Nicole Schneeweis (JKU Linz) Personnel Economics 8 / 26

9 Intrinsic motivation Nicole Schneeweis (JKU Linz) Personnel Economics 9 / 26

10 Core job characteristics and intrinsic motivation Skill variety: providing workers with the ability to perform more tasks or learn more skills Task identity: extent to which a worker's job entails completing an observable piece of work Task signicance: extent to which the worker nds the product or service valuable Autonomy: giving the worker greater discretion over how the work is performed and greater ability to make decisions Feedback: providing the worker with information on the eects of actions and decisions Nicole Schneeweis (JKU Linz) Personnel Economics 10 / 26

11 Job Design: Teams When to use teams Many tasks are complementary, too many for one worker Coordination between organizational units, members of each unit Specialization, without loosing advantages of multitasking Knowledge Transfer: some individuals have specic information, that is needed by others Disadvantages of teams Decision making is dicult: long discussions, politics and power, result not optimal = team leader with certain authority to decide Free-riding: individual eort is dicult to observe from outside, possible to hide behind the team, reduces motivation and eort Nicole Schneeweis (JKU Linz) Personnel Economics 11 / 26

12 Free-riding in Teams Kandel & Lazear, Journal of Political Economy 1992 The rm Production: factors of production are eort-levels of workers Y = f (e) e = e 1... e N Payment: single eort not observable, depends on total output Pay = Y N The worker Costs: eort is costly, marginal costs of eort increase C(e i ), C (e i ) > 0, C (e i ) > 0 Utility: individuals like payment (consumption) but dislike eort U i = Y N C(e i) Nicole Schneeweis (JKU Linz) Personnel Economics 12 / 26

13 Individual utility maximization versus social planer Individuals maximize their utility max ei U i = Y N C(e i) Optimality: f i (e) Result: ê = ê 1... ê N N C (e i ) = 0 = f i (e) N = C (e i ) i Social planer maximizes welfare function (ecient solution) max e1..e N V = Y N i=1 C(e i) Optimality: f i (e) C (e i ) = 0 = f i (e) = C (e i ) Result: e* = e 1... e N Result: e* > ê i Nicole Schneeweis (JKU Linz) Personnel Economics 13 / 26

14 Exercise: Model of free-riding Y = 4 N i=1 e 1 2 i Pay = 4 N C = e 2 i N = 2 1 e 2 i=1 i N Nicole Schneeweis (JKU Linz) Personnel Economics 14 / 26

15 Solution: Model of free-riding Individual utility maximization 3 Reaction functions: e 1 = e 1 2 /2 3 2 and 3 e 2 = e 1 1 /2 2 3 Results: ê = {ê 1 = 0.5, ê 2 = 0.5} Y (ê) = 2 Û = {Û 1 = 0.75, Û 2 = 0.75} Social planer (ecient solution) 3 Reaction functions: e 1 = e and e 2 = e 1 1 Results: e* = {e1 = 1, e 2 = 1} Y (e*) = 4 U* = {U1 = 1, U 2 = 1} Nicole Schneeweis (JKU Linz) Personnel Economics 15 / 26

16 Exercise II: Model of free-riding Y = 4 N i=1 e 1 2 i Pay = 4 N C = 1 2 e2 i N = 2 1 e 2 i=1 i N Nicole Schneeweis (JKU Linz) Personnel Economics 16 / 26

17 Knowledge transfer Knowledge transfer can be a major benet of team production Two conditions have to hold: Team members have individual information that can ow among the members (i.e. information-sets are not fully overlapping). The individual information of one member is valuable to some other team member (i.e. to carry out his or her tasks, one member can benet from the information-set of the other member). Nicole Schneeweis (JKU Linz) Personnel Economics 17 / 26

18 Knowledge transfer Figure: Knowledge transfer: Kate and Tor perform tasks for which the other's information-set is needed Nicole Schneeweis (JKU Linz) Personnel Economics 18 / 26

19 No knowledge transfer Figure: No knowledge transfer: Other information-set not needed (Figure 8.2), overlapping information-set and tasks (Figure 8.3) Nicole Schneeweis (JKU Linz) Personnel Economics 19 / 26

20 Job Design Teams Team size too small: lower level of knowledge transfer and lower level of freeriding too large: communication problems and more free-riding Peer monitoring Norms team members observe each other, reduces free-riding more eective in small teams: observability, motivation because of greater dependency among team members informal policies, practices or a set of beliefs that is held by the majority of the group power of the norm depends on sanctions against deviations Nicole Schneeweis (JKU Linz) Personnel Economics 20 / 26

21 Free-riding and norms Utility function with norms U i = f (e) N C(e i) + γ(e i ē) ē captures the norm (desired eort level) if e i > ē utility rises if e i < ē utility declines U i = f (e) N C(e i) + γe i γē U i = f i (e) (e N i) + γ if ē is determined externally U i = f i (e) (e N i) + γ γē if ē is determined within the group Nicole Schneeweis (JKU Linz) Personnel Economics 21 / 26

22 Polarization David Autor (MIT) The Polarization of Job Opportunities in the U.S. labor market (paper released by The Center for American Progress and The Hamilton Project) More employment in jobs with high wages and high education low wages and low education Less employment in jobs with medium wages and medium education Nicole Schneeweis (JKU Linz) Personnel Economics 22 / 26

23 The second set of bars in Figure 4 breaks these patterns by education group, showing that the share of males with no more than a high school education employed in middle-skill occupations dropped by 3.9 percent between 1979 and More Polarization USA of males in high-skill occupations. Figure 4 paints a more encouraging picture for females. Women with less than a four-year college degree experienced Figure 4 Changes in occupational employment shares by education and sex, Percentage change in occupational employment shares 20% 16% 12% 8% 4% 0% -4% -8% -12% -16% -20% Occupation skill group Occupation skill group Occupation skill group Occupation skill group Low Medium High Low Medium High Low Medium High Low Medium High All High school or less Some college College + Males Females Definitions of skill groups High skill: Managerial, professional, and technical occupations Medium skill: Sales, office/admin, production, and operators Low skill: Protective service, food prep, janitorial/cleaning, personal care/services Source: May/ORG CPS data for earnings years See note to Figure 12. The 10 broad occupations are classified as belonging to one of three broad skill groups. Nicole Schneeweis (JKU Linz) Personnel Economics 23 / 26

24 Polarization One explanation Technological change: information technology and automation What jobs can be replaced by new technologies? Routine tasks: well-dened, standard procedure eg. oce work, accounting, repetitive production work = medium wages and medium education What jobs can't be replaced by new technologies? Abstract tasks: problem solving, intuition, power of persuasion eg. managers, lawyers, medical doctors = high wages and high education Manual tasks: situational, language, personal contact eg. jobs in the service sector, health jobs = low wages and low education Nicole Schneeweis (JKU Linz) Personnel Economics 24 / 26

25 Polarization Other countries The Polarization of Job Opportunities in the U.S. Labor Market Figure 6 Change in employment shares by occupation in 16 European countries Occupations grouped by wage tercile: Low, middle, high, Percentage change in employment shares 18% 15% 12% 9% 6% 3% 0% -3% -6% -9% -12% -15% Portugal Ireland Finland Norway Netherlands Greece U.K. Sweden Germany Spain Belgium Denmark Luxembourg France Austria Italy U.S. EU average Lowest-paying third Middle-paying third Highest-paying third Source: Data on EU employment are from from Goos, Manning and Salomons, 2009a. U.S. data are from the May/ORG CPS files for earnings years The data include all persons ages who reported having worked last year, excluding those employed by the military and in agricultural occupations. Occupations are first converted from their respective scheme into 328 occupation groups consistent over the given time period. These occupations are then grouped into three broad categories by wage. Nicole Schneeweis (JKU Linz) Personnel Economics 25 / 26

26 Questions? Nicole Schneeweis (JKU Linz) Personnel Economics 26 / 26