Screening, Competition, and Job Design: Economic Origins of Good Jobs
By Björn Bartling, Ernst Fehr, Klaus M. Schmidt. Social Science Research Network, 2012
143 citations recorded by the source corpus.
In recent decades, many firms offered more discretion to their employees, often increasing the productivity of effort but also leaving more opportunities for shirking. These “high-performance work systems” are difficult to understand in terms of standard moral hazard models. We show experimentally that complementarities between high effort discretion, rent-sharing, screening opportunities, and competition are important driving forces behind these new forms of work organization. We document in particular the endogenous emergence of two fundamentally distinct types of employment strategies. Employers either implement a control strategy, which consists of low effort discretion and little or no rent-sharing, or they implement a trust strategy, which stipulates high effort discretion and substantial rent-sharing. If employers cannot screen employees, the control strategy prevails, while the possibility of screening renders the trust strategy profitable. The introduction of competition substantially fosters the trust strategy, reduces market segmentation, and leads to large welfare gains for both employers and employees.
Subfields: Economics and Econometrics, Safety Research
View Paper: https://www.semanticscholar.org/paper/7c19258a95263c0771bfbc16d224f0891de49eeb
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In Economics and Econometrics
Citations in the corpus
- Personnel Economics: Hiring and Incentives (2010, unknown): “Bartling et al. (2009) argue that choice of recruitment method — screening, in particular — can have complementarities with discretion, rent-sharing, and wages.”
- Autonomy in Paid Work and Employee Subjective Well-Being (2017, background): “Bartling, Fehr, and Schmidt (2012) identify ‘‘good jobs’’ as those that exhibit high levels of discretion, pay, and rent-sharing.”
- Bonus Culture: Competitive Pay, Screening, and Multitasking (2016, unknown): “Heterogeneity also raises the question of the self-selection of agents into professions 42 See also Bartling, Fehr, and Schmidt ð2012Þ for experimental evidence on sorting with conditional cooperators.”