The transfer of human resource management technology in Sino-U.S. cooperative ventures: Problems and solutions

Differences between Chinese and U.S. human resource management systems are described with respect to fundamental organization and work-related assumptions about people and performance, rewards, training and development, and educational background of HR practitioners. We identify key differences that present impediments to the modernization of HRM practices in Sino-U.S. cooperative ventures, and then, present a normative framework for the introduction of modem HRM practices into these ventures. We conclude with implications for both research and practice that focus primarily on integrating individuals and the enterprise, as well as integrating the enterprise with social and economic goals.     

Long-run underperformance following private equity placements: The role of growth opportunities

Our results show that the post-offering performance of private equity issuers is related to growth opportunities. We find significant long-run underperformance in stock returns following private placements only for firms with high Tobin's q. High-q firms experience not only poor stock price performance but also poor operating performance. Low-q firms, in contrast, do not display significant stock price or operating underperformance. We further examine three potential explanations for this relation: over-investment in assets by managers, investor skewness preference, and over-optimism about earnings prospects. Our results are consistent with the view that investors are overly optimistic about the prospects of high growth firms.     

Understanding pay plan acceptance: The role of distributive justice theory

As U.S. businesses shift from individual rewards toward more aggregated pay systems, they must address the issue of reward allocation within groups. Specifically, should aggregate rewards be allocated equally to all group members, or should individual contributions be recognized? In this paper, the multiprinciple view of distributive justice is used as a starting point to predict employee reactions to different allocation methods. Propositions for future research that could facilitate the implementation of alternative pay plans are offered.     

Leading public service organizations: how to obtain high employee self-efficacy and organizational performance

Concerns are sometimes raised that transactional leadership harms public organizations’ performance because demands thwart employees’ self-efficacy. However, the opposite may be argued – conditional rewards strengthen feelings of competence because they provide positive feedback on performance. We study ninety-two high school principals’ reported use of contingent rewards and sanctions and self-efficacy among their 1,932 teachers. The results indicate that contingent rewards strengthen self-efficacy, and that sanctions are not negatively related with self-efficacy or performance. Furthermore, the teachers’ self-efficacy can be linked positively to organizational performance. This suggests that rewards can be an important tool for managers in the public sector.     

Learning from the Japanese: management in a resource-scarce world

The principal value of studying the Japanese managerial system, according to Zussman, lies not in the prospect of copying it or of finding secrets for success, but in our ability to identify the relationship between the material resource position of an economy and the managerial systems that will be most effective in it. Zussman briefly discusses the historical development of the Japanese response to their resource-poor homeland and the principles they identified for success through the utilization of human resources--the one resource they had in abundance. He also cites the United States's historical response to its resource position as a source of our present economic difficulties. He contends that the structural changes required to cure our economic woes include eliminating the "entitlement" culture, developing better processes for employee selection, utilizing nonmonetary rewards, and adopting different criteria for selection and promotion of managers.     

The Relationship between Slack Resources and the Performance of Entrepreneurial Firms: The Role of Venture Capital and Angel Investors

In this study, we seek to further delineate factors that condition the relationship between slack resources and firm performance. To do so, we develop and test a model that establishes the role of venture capital (VC) and angel investors as powerful external stakeholders who positively moderate the slack–performance relationship. In addition, we provide more insight into this relationship by examining differences between these two types of private investors and by examining the role of their ownership stakes. We test our hypotheses using a sample of 1215 private firms, including VC‐backed firms, angel‐backed firms, and similar firms without such investors. We find that the presence of VC investors positively moderates the relationship between both financial and human slack resources and firm performance, while angel investors only positively moderate the effect of human resource slack. Further, VC investors are only marginally better at helping entrepreneurs to extract value from human resource slack than angel investors and they are no better when it comes to financial slack. Finally, we find that the impact of financial and human resource slack on firm performance is more positive in VC‐backed firms when investors hold high ownership stakes, an effect which is significantly stronger than when angel investors hold high ownership stakes.     

Performance Ratings and Career Advancement in the US Federal Civil Service

Abstract

A strong link between performance and rewards in the U.S. federal civil service could raise top performers to positions of power and responsibility and motivate employees to greater productivity. Federal employees, the general population and scholars all express doubts about the strength of that link, however, though few have estimated it empirically. Using random-effects panel data models on a one per cent sample of federal personnel records for 1988–2003, we examine whether performance ratings meaningfully influence promotion probabilities and annual salary increases. With an average annual promotion rate of 17.8 per cent over this period, we estimate that employees with ‘outstanding’ and ‘less than fully successful’ ratings were one-fourth more likely and one-fifth less likely, respectively, to receive promotions than those with ‘fully successful’ ratings. Average salary impacts were smaller but still significant. Patterns held up across agencies and stages of the federal careers. Performance ratings continued to affect career advancement one or two years later. We speculate on whether these links are strong enough to motivate performance and advance the most qualified federal employees.     

Selection Biases in Complementary R&D Projects

This paper analyzes selection biases in the project choice of complementary technologies that are used in combination to produce a final product. In the presence of complementary technologies, patents allow innovating firms to hold up rivals who succeed in developing other system components. This hold‐up makes innovation rewards independent of project difficulties and firms excessively cluster their R&D efforts on a relatively easier technology in order to preemptively claim stakes on component property rights. This selection bias is persistent and robust to several model extensions. Implications for the optimal design of intellectual property rights are discussed.     

The Role of Reward Systems in Product Innovations: An Examination of New Product Development Projects

Focusing on new product development projects, this study suggests that the effect of a market orientation on innovation performance relationships may differ depending on whether the market orientation is responsive or proactive. This study also argues that process‐based and outcome‐based rewards moderate the effect. Based on a survey of 186 new product development projects in 122 high‐tech firms, this study found that responsive and proactive market orientations have positive influences on incremental innovation performance and radical innovation performance, respectively. In addition, the positive effect of a proactive market orientation on performance is strengthened by process‐based rewards, whereas the positive effect of a responsive market orientation on performance is positively moderated by outcome‐based rewards. This study provides practical implications and directions for future research.     

Long Term Incentive Plans,Executive Pay and UK Company Performance*

ABSTRACT In agency theory, the remuneration packages of executive directors in large companies are seen as an attempt to give them a pattern of rewards that aligns their interests more closely with shareholders as a whole. The sensitivity of total executive rewards to share price performance has become the conventional yardstick for judgements concerning whether reward packages do indeed serve shareholders’ interests or executives themselves. Long‐term incentive plans (LTIPs) introduced in the UK from 1995 have imposed new, firm‐specific performance conditions on senior managers. While LTIPs are designed to increase performance‐pay sensitivity, however, they also give executives new opportunities to manipulate the terms of LTIPs in their own favour, at the expense of shareholders and stakeholders in general. This paper presents the first estimates of UK total executive rewards that include detailed LTIP valuations. It finds that, while increasing average total rewards, the presence of LTIPs is actually associated with reductions in the sensitivity of executives’ total rewards to shareholder return. This raises doubts concerning both the effectiveness of the LTIP instrument and the validity of an agency perspective in this context.     

When do high‐level managers believe they can influence the stock price? Antecedents of stock price expectancy cognitions

Stock based rewards are often used to motivate high‐level managers to take actions to increase the stock price of the firm. However, numerous constraints may weaken the perceived link between individual effort and stock price appreciation for many recipients. This study introduces a new construct, stock price expectancy, which we define as individuals' perceptions of influence over their firm's stock price. We examined its antecedents in a sample of 349 high‐level U.S. managers and found that employment at corporate headquarters, firm size, hierarchical level, and contact with investment analysts predicted stock price expectancy perceptions. © 2010 Wiley Periodicals, Inc.     

Event-study evidence of the value of relaxing long-standing regulatory restraints on banks, 1970–2000

In a partial-equilibrium model, removing a binding constraint creates value. However, in general equilibrium, the stakes of other parties in maintaining the constraint must be examined. In financial deregulation, the fear is that expanding the scope and geographic reach of very large institutions might unblock opportunities to build market power from informational advantages and size-related safety-net subsidies.This paper reviews and extends event-study evidence about the distribution of the benefits and costs of relaxing long-standing geographic and product-line restrictions on U.S. financial institutions. The evidence indicates that the new financial freedoms may have redistributed rather than created value. Event returns are positive for some sectors of the financial industry and negative for others. Perhaps surprisingly, where customer event returns have been investigated, they prove negative.     

How reward satisfaction affects employees’ turnover intentions and performance: an individual differences approach

We challenge the assumption that satisfaction with rewards has the same effect on the behaviour and attitudes of every employee, and hypothesise that there are individual differences in the effects of (satisfaction with) financial, material and psychological rewards on turnover intentions and task performance. Survey data from 179 employees are combined with supervisor‐rated task performance data and analysed with cluster‐wise regression analysis. As for task performance, no employee types or individual differences were found. However, we identified three different employee types revealing a unique relationship pattern between satisfaction with financial, material and psychological rewards and turnover intentions. These employee types also differed in socio‐demographic characteristics and work values. Our findings illustrate that to be able to fully understand the underlying relationship between rewards and employee outcomes, scholars need to adopt an individual difference perspective and methodology. Implications for practice, limitations and opportunities for future studies are discussed.     

Organizational Control and Work Effort – Another Look at the Interplay of Rewards and Motivation

Providing rewards is a central element of organizational control systems. However, the literature is hardly helpful from a practitioner's perspective: it typically focuses on monetary rewards at the expense of non-monetary, affiliative rewards, and yet researchers disagree over the usefulness of the prior ones. Some scholars claim that monetary rewards merely replace task-related (‘intrinsic’) motivation by reward-induced external pressure (‘extrinsic’ motivation). Empirical findings are mixed, partially given the different conceptualizations of intrinsic motivation. We shed more light on the impact of both monetary and non-monetary, affiliative rewards on the willingness to exert work effort and a potential detrimental interaction with different forms of intrinsic motivation. Our experimental results suggest that monetary and affiliative rewards have different effects: affiliative rewards clearly have beneficial effects, whereas the picture for monetary rewards is more nuanced than typically assumed in literature.     

Navigating the New Normal: Political Affinity and Multinationals’ Post-Acquisition Performance

The New Normal in the international business landscape reflects a world challenged by economic volatility and political hostilities. This suggests increased political risk, even for MNEs operating in developed markets. We use the legitimacy-based view of political risk to examine how political affinity between host and home markets may contribute to an MNE’s post-acquisition performance in a developed market. A high degree of political affinity signifies aligned national interests thus reducing legitimacy concerns faced by MNEs during post-acquisition integration. Based on cross-border M&A deals focused on U.S. targets completed by MNEs representing 45 countries between 2004 and 2012, we find that MNEs from countries with greater political affinity to the U.S. experience better post-acquisition performance. We also investigate two country-level factors that intensify the threat to legitimacy; the MNEs’ home market economic status and the presence of a financial crisis in the host market. Our findings indicate that political affinity mitigates risk for MNEs originated from emerging economies much more than for MNEs originated from developed economies, whereas a financial crisis reduces the benefit of political affinity.     

New product development projects: The effects of organizational culture

Despite the increasing use of project management within organizations, an attendant poor rate of success among these projects has been observed (Clancy & Stone, 2005; Ives, 2005). Seventy‐five percent of all business transformation projects fail (Collyer, 2000) and only 16% of U.S. IT projects are completed on time and on budget (Peled, 2000). In an attempt to overcome such a high project failure rate, this paper investigates the effects of organizational culture on the performance of particular types of projects: new product development (NPD) projects. Using data from 95 U.S. organizations, the study provides evidence of the significant effects of organizational culture on NPD projects.     

The economic profitability of pre-IPO earnings management and IPO underperformance

The purpose of this paper is to test the market performance of a zero-investment trading strategy based on the knowledge of IPO underperformance and estimates of pre-IPO earnings management. This trading strategy is implemented by forming two-firm portfolios that take short positions in the IPOs and long positions in control firms matched by industry and market capitalization. The first test shows that significant positive abnormal returns can be earned trading on the knowledge of IPO underperformance. However, the relationship between the level of abnormal returns and the level of pre-IPO earnings management is not found to be significant. Overall, our results suggest that existent pre-IPO earnings management plays important roles although investors may not sophisticated enough to measure the level of earnings management.     

OHSAS 18001 certification and operating performance: The role of complexity and coupling

Today, manufacturing firms encounter pressure from multiple stakeholders to manage occupational health and safety issues properly, systematically and transparently. While manufacturing firms commonly use internally developed Occupational Health and Safety Management Systems, there is growing pressure to adopt externally certified system such as OHSAS 18001. However, there are conflicting views and little empirical evidence that examines the linkage between OHSAS 18001 certification and operating performance. Hence, this paper examines the impact of OHSAS 18001 on operational performance through three theoretical lenses: Institutional Theory, Normal Accident Theory, and High Reliability Theory. We also investigate how complexity and coupling moderate the relationship between OHSAS 18001 and operational performance. Based on a sample of 211 U.S. listed manufacturing firms with OHSAS 18001 certification, we find that certification leads to significant increases in abnormal performance on safety, sales growth, labor productivity, and profitability and that these benefits increase as complexity and coupling increase.     

Why are some graduate entrepreneurs more innovative than others? The effect of human capital,psychological factor and entrepreneurial rewards on entrepreneurial innovativeness

This study investigates the innovation behaviour of graduate start-ups at the individual level. It bridges the graduate enterprise literature and innovative entrepreneurship literature to put forward three arguments that ascertain why highly educated graduate entrepreneurs are not always innovative in starting new businesses. First, anchoring on the individual opportunity costs–entrepreneurial rewards nexus, it argues that graduate entrepreneurs will exploit opportunities innovatively if they expect the levels of entrepreneurial rewards that match their high human capital and high opportunity costs. Second, it is argued that entrepreneurial innovativeness is conditional on psychological factors such as students’ managerial self-efficacy and overconfidence. Third, it is also argued that the nonlinear relationship between entrepreneurial innovativeness and entrepreneurial rewards will drive graduate entrepreneurs to exploit even riskier opportunities in search for high rewards. This study operationalizes the theoretical framework with an empirical model and estimates it using a graduate entrepreneur sample from a questionnaire survey in China. Our results suggest that innovation behaviour of graduate start-ups is influenced by the quantity of human capital, psychological make-up and expectations of entrepreneurial rewards.     

How to calculate total purchase cost

Companies wanting to implement a total cost-based supplier selection process often stumble over how to include nonmonetary issues such as delivery and quality performance, lead time, services, and social policies. This article describes a process that allows a company to include any issue it deems relevant and to determine its cost factor.