A new mandate for human resources

Should we do away with HR? In recent years, a number of people who study and write about business--along with many who run businesses--have been debating that question. The debate arises out of serious and widespread doubts about HR's contribution to organizational performance. Dave Ulrich acknowledges that HR, as it is configured today in many companies, is indeed ineffective, incompetent, and costly. But he contends that it has never been more necessary. The solution, he believes, is to create an entirely new role for the field that focuses it not on traditional HR activities, such as staffing and compensation, but on business results that enrich the company's value to customers, investors, and employees. Ulrich elaborates on four broad tasks for HR that would allow it to help deliver organizational excellence. First, HR should become a partner in strategy execution. Second, it should become an expert in the way work is organized and executed. Third, it should become a champion for employees. And fourth, it should become an agent of continual change. Fulfilling this agenda would mean that every one of HR's activities would in some concrete way help a company better serve its customers or otherwise increase shareholder value. Can HR transform itself on its own? Certainly not--in fact, the primary responsibility for transforming the role of HR, Ulrich says, belongs to the CEO and to every line manager who works with the HR staff. Competitive success is a function of organizational excellence, and senior managers must hold HR accountable for delivering it.     

Real Rates, Expected Inflation, and Inflation Risk Premia

This paper studies the term structure of real rates, expected inflation, and inflation risk premia. The analysis is based on new estimates of the real term structure derived from the prices of index-linked and nominal debt in the U.K. I find strong evidence to reject both the Fisher Hypothesis and versions of the Expectations Hypothesis for real rates. The estimates also imply the presence of time-varying inflation risk premia throughout the term structure.     

The Effect of Junk Bond Defaults on Common Stock Returns

This paper examines the effect of junk bond defaults on common stock returns. The evidence indicates that stockholders uncover the signs of financial distress long before the default date. Stock prices fall sharply at the time of the default announcement. Although stocks of fallen angel sample recover slowly and steadily after the default announcement, stocks of the original-issue junk bond sample continue to decline. On average, bankrupt firms suffer larger negative stock returns than defaulted firms not only at the time of announcement, but also in both pre- and post-event periods.     

The Performance of Trading Firms in the Services Sectors – Comparable Evidence from Four EU Countries

We examine trade complexity and the implications of adding additional dimensions of trade for firm performance among services producers. We use unique firm‐level data to compare these patterns across four EU countries. Overall, services firms are relatively less engaged in trade than manufacturing firms; they mostly trade goods and are more likely to import than to export. Trade in services is quite rare; services are more likely to be traded by firms already trading goods. Trading firms in the services sectors are significantly larger, more productive and pay higher wages than non‐traders. Two‐way traders outperform one‐way traders. Changes in trading status by either adding another dimension of trade (imports, exports) or another type of product (goods, services) are infrequent and are associated with significant preswitching premia. In contrast, learning effects from switching trading status are uncommon. This points to significant fixed cost of being engaged in trade and confirms some previous findings that trading services firms have similar traits as their manufacturing counterparts. Apart from greater trade participation in smaller countries, we do not observe systematic differences in terms of trade or switching premia between the four countries that might be attributable to differences in country characteristics.     

The ‘Myth’ of Human Resource Management in Chinese Enterprises

This study examines changing labour-management practices in China's state-owned enterprises (SOEs) in comparison with those in joint ventures (JVs). Based on a sample of 62 firms in seven Chinese major cities, it explores the degree to which HRM practices are a ‘myth’. The researchers carried out semi-structured interviews with managers and other employees at all levels. The role of trade unions and workers' congresses are also examined. The results show that the ownership type, size of the firm, and its location are important factors affecting the extent to which these enterprises have adapted to market-orientated HRM practices. The study concludes that most firms have not fully made this adaptation, and that even where it has been taken up, it has in many cases only been done so partially due to organizational inertia, amongst other factors.