Findings

Running smoothly

Kevin Lewis

May 30, 2017

The mixed blessing of leader sense of humor: Examining costs and benefits
Kai Chi Yam et al.
Academy of Management Journal, forthcoming

Abstract:

Workplace humor is ubiquitous, yet scholars know little about how it affects employees' behaviors in organizations. We draw on an emerging psychological theory of humor - benign violation theory - to suggest that a leader's sense of humor often conveys counter-normative social information in organizations. We integrate this theory with social information processing theory to develop hypotheses about the effects of a leader's sense of humor on follower behavior. We suggest that although a leader's sense of humor is positively associated with leader member exchange and ultimately work engagement, it can also signal to followers the acceptability of norm violation at work. These perceptions in turn are positively associated with followers' deviance. Furthermore, we propose that these indirect effects are moderated by leader aggressive humor. Data from two three-wave field studies in China and the United States provide support for our hypotheses. Taken together, our results suggest that a leader's sense of humor can be a mixed blessing and elicit unforeseen negative behaviors from their followers.


Shadow and Spillover Effects of Competition in NBA Playoffs
Brian Hill
Journal of Sports Economics, forthcoming

Abstract:

The National Basketball Association (NBA) playoffs are structured as an elimination tournament where reseeding does not occur after each round. This structure leads to situations where future competitors (the shadow effect) and previous effort (the spillover effect) affect current performance. Using data from the 2009-2014 NBA playoffs, results here find that, when a future opponent is known, a series favorite is significantly more likely to win a game when the future opponent is weaker than expected. Estimates also provide evidence that greater previous effort by teams increases the probability the series favorite wins a game.


Structural Disruption, Relational Experimentation, and Performance in Professional Hockey Teams: A Network Perspective on Member Change
Colleen Stuart
Organization Science, March-April 2017, Pages 283-300

Abstract:

This paper explores how action teams reorganize their interdependent relationships following the exit of a key team member. To do so, I adopt a network perspective to conceptualize interaction patterns as a network, first to identify members who are central to the team's workflow, and second to assess changes in tie formation as teams experiment with their relational structure following member exit. Using data on professional hockey teams - where unexpected member change due to injury is frequent, but highly interdependent teams nonetheless carry out complex, time-sensitive work - results indicate that the injury of central players negatively affects team performance, even when controlling for individual performance. Teams adapted to central exits by maintaining their existing interaction patterns, even though higher levels of relational experimentation following an injury were positively associated with performance. By considering changes in ties within a team, a network approach focuses on the relationships that are disrupted by compositional change and provides a more flexible way of thinking about adaptation and reorganization beyond a team's formal structure.


Estimating the Innovator's Dilemma: Structural Analysis of Creative Destruction in the Hard Disk Drive Industry, 1981-1998
Mitsuru Igami
Journal of Political Economy, June 2017, Pages 798-847

Abstract:

This paper studies strategic industry dynamics of creative destruction in which firms and technologies experience turnover. Theories predict that cannibalization between existing and new products delays incumbents' innovation, whereas preemptive motives accelerate it. Incumbents' cost (dis)advantage relative to that of entrants would further reinforce these tendencies. To empirically assess these three forces, I estimate a dynamic oligopoly model using a unique panel data set of hard disk drive manufacturers. The results suggest that despite strong preemptive motives and a substantial cost advantage over entrants, cannibalization makes incumbents reluctant to innovate, which can explain at least 57 percent of the incumbent-entrant innovation gap.


Accounting for Complementary Skill Sets: Evaluating Individual Marginal Value to a Team in the National Basketball Association
Joseph Kuehn
Economic Inquiry, July 2017, Pages 1556-1578

Abstract:

Identifying an individual worker's contribution to firm production can be difficult in a team setting where spillovers in labor productivity exist among team members. This paper studies a model of labor productivity where workers have heterogeneous abilities, and can differently affect the productivity of their fellow teammates. Applying the model to the setting of the National Basketball Association (NBA), I can identify the marginal value that a basketball player brings to a particular team lineup, both through his own individual contributions and his complementary contribution to teammates' productivity. Estimates from the model imply that teammates have a significant impact on individual player productivity, and that taking into account spillovers across teammates is important to assessing both overall team productivity and an individual player's contribution to team productivity. I then evaluate whether player complementarities are valued in the NBA labor market in terms of higher salaries, and find that they are undervalued, and that players are instead paid mainly for their individual offensive production. This creates an asymmetry between player incentives and the team objective. To assess the size of this inefficiency, the top trading cycle algorithm of Shapley and Scarf (1974) is used to identify a Pareto optimal matching between players and teams, that accounts for the complementarities between heterogeneous players' skill sets.


Testing Labor Market Efficiency Across Position Groups in the NFL
Michael Roach
Journal of Sports Economics, forthcoming

Abstract:

This article proposes a new metric to proxy for the incidence of player absences faced by National Football League teams based on the percentage of team payroll resources that are inactive over the course of a season. This variable significantly predicts team performance. Calculating this measure for individual position groups allows me to test for differences in the marginal impact of salary resources across these groups. Results indicate that resources dedicated to offense, in particular to offensive linemen and starting quarterbacks, have the highest marginal impact on team performance. This suggests a market inefficiency where these players were relatively underpaid.


Job Characteristics Associated With Self-Rated Fair or Poor Health Among U.S. Workers
Sara Luckhaupt et al.
American Journal of Preventive Medicine, forthcoming

Methods: Data from the 2010 National Health Interview Survey were used to calculate weighted prevalence rates for self-reported fair/poor health for five categories of job characteristics: occupation; pay/benefits (economic); work organization; chemical/environmental hazards; and psychosocial factors. Backward elimination methods were used to build a regression model for self-reported health with the significant job characteristics, adjusting for sociodemographic variables and health behaviors. Data were collected in 2010 and analyzed in 2012-2016.

Results: After adjusting for covariates, workers were more likely to have fair/poor health if they were employed in business operations occupations (e.g., buyers, human resources workers, event planners, marketing specialists; adjusted prevalence ratio [APR]=1.85, 95% CI=1.19, 2.88); had no paid sick leave (APR=1.35, 95% CI=1.11, 1.63); worried about becoming unemployed (APR=1.43, 95% CI=1.22, 1.69); had difficulty combining work and family (APR=1.23, 95% CI=1.01, 1.49); or had been bullied/threatened on the job (APR=1.82, 95% CI=1.44, 2.29).


Performance Pay and Work-Related Health Problems: A Longitudinal Study of Establishments
Jed DeVaro & John Heywood
ILR Review, May 2017, Pages 670-703

Abstract:

Using panel data from 2004 and 2011, the authors find an elevated incidence of work-related ailments (associated with bones, muscles, and joints) in U.K. establishments that use individual performance pay, even after accounting for establishment fixed effects. Fixed-effect estimates also confirm a positive relationship between absence due to illness and performance pay. The elevated rates of ailments associated with performance pay appear to reduce financial performance and product quality, even though performance pay has a positive net influence on financial performance. Thus, a hidden cost of performance pay is occupational health deterioration. Parallel results are absent for labor productivity and, in a smaller sample, for profit.


Ideation-Execution Transition in Product Development: An Experimental Analysis
Evgeny Kagan, Stephen Leider & William Lovejoy
Management Science, forthcoming

Abstract:

Bringing a new product to market involves both a creative ideation stage and an execution stage. When time-to-market constraints are binding, important questions are how to divide limited time between the two stages and who should make this decision. We introduce a laboratory experiment that closely resembles this setting: it features a product development task with an open design space, a downstream cost increase, and two development stages. We show that performance is significantly worse when designers choose for themselves when to transition from ideation to execution and that decision control explains a large share of performance variation even after controlling for individual differences. How the time is allocated between ideation and execution does not affect mean performance, but later transition increases risk. One driver of poor design outcomes in the designer-initiated transition regime are delays in physical construction and testing of designs. We show that such delays can be prevented by "nudging" designers toward early prototyping. However, the most important performance driver is the lack of task structure in endogenous regimes, which can be remedied by demanding a concrete, performance-oriented deliverable prior to a transition.

 


Conversational Peers and Idea Generation: Evidence from a Field Experiment
Sharique Hasan & Rembrand Koning
Harvard Working Paper, May 2017

Abstract:

High quality ideas and the individuals who generate them are critical to the success of organizations. In this article, we take a micro-network perspective on idea generation and incorporate personality theory into a multi-level model of information acquisition and idea generation. We posit that innovator and peer personality are critical factors conditioning who will generate high-quality ideas, and that our proposed mechanisms have implications at both individual and team levels. Using data from a randomized field experiment embedded in a startup bootcamp for early-stage entrepreneurs, our findings show that innovators who are more open to experience do generate better ideas, but only when they converse with extroverted peers. Further, we find that teams populated with such openness-extroversion dyads perform substantially better -- having both a higher pool of novel information and better recombinative capability with the team. We discuss implications for future research on the individual and social determinants of innovation.


Beyond Moneyball: Changing Compensation in MLB
Joshua Congdon-Hohman & Jonathan Lanning
Journal of Sports Economics, forthcoming

Abstract:

This study examines the changes in player compensation in Major League Baseball during the last three decades. Specifically, we examine the extent to which recently documented changes in players' compensation structure based on certain types of productivity fits in with the longer term trends in compensation and identify the value of specific output activities in different time periods. We examine free-agent contracts in 3-year periods across three decades and find significant changes to how players' past performances are rewarded in free agency beyond the change in those to on-base percentage seen in the mid-2000s. We find evidence that the compensation strategies of baseball teams increased the rewards to "power" statistics beyond home runs in the 1990s from a model that focused on successfully reaching base with a batted ball without a significant regard for the number of bases reached. Similarly, we confirm and expand upon the increased financial return to bases on balls in the late 2000s as found in previous research.


From college to the NBA: What determines a player's success and what characteristics are NBA franchises overlooking?
Brent Evans
Applied Economics Letters, forthcoming

Abstract:

Considering NBA players who were drafted between 2006 and 2013, the author analyses the determinants of draft position, playing time and player productivity. By comparing these factors simultaneously, one is able to consider if there are some factors that correlate with players' draft positions, but fail to correlate with on-court performance. For example, the results reveal that a player's college turnover rate does not predict his draft position or his playing time in the NBA despite evidence that turnover-prone college players are less effective in the NBA. These results can be used to improve draft-day decisions for NBA executives.


Compensatory control and ambiguity intolerance
Anyi Ma & Aaron Kay
Organizational Behavior and Human Decision Processes, May 2017, Pages 46-61

Abstract:

When do people find ambiguity intolerable, and how might this manifest in the workplace where roles, guidelines and expectations can be made to be more or less ambiguous? Compensatory Control Theory (CCT; Kay, Gaucher, Napier, Callan, & Laurin, 2008) suggests a potential driver: perceived control. Recent CCT theory (Landau, Kay, & Whitson, 2015) has posited that people with chronically lower levels of perceived control may be especially likely to seek coherent and structured environments. Given that ambiguous workplace situations - such as flexible roles and titles, or loose guidelines and expectations - necessarily represent a lack of structure, these types of situations may therefore be especially aversive to those lower in perceived control. Four studies support this prediction. Specifically, we observe that low perceived control (both measured or manipulated) predicts greater ambiguity intolerance as well as greater negative attitudes towards ambiguous situations (Studies 1, 2 and 3), but not other types of problematic workplace situations (Study 1), and that this process can exert important downstream consequences, ranging from behavioral intentions to perceived self-efficacy (Study 4).


Compromised Ethics In Hiring Processes? How Referrers' Power Affects Employees' Reactions To Referral Practices
Rellie Derfler-Rozin, Bradford Baker & Francesca Gino
Academy of Management Journal, forthcoming

Abstract:

In this paper, we explore referral-based hiring practices and show how a referrer's power (relative to the hiring manager) influences other organizational members' support (or lack thereof) for who is hired through perceptions of the hiring manager's motives and morality. We apply principles derived from the literature on attribution of motives to research on relational power to delineate a model that explains employees' moral evaluations of and reactions to referral practices based on the power relationship between a referrer and a hiring manager. Specifically, we predict that employees are more likely to see the acceptance of a referral from a higher- (as opposed to a lower-) power referrer as a way for the hiring manager to gain more power in the relationship with the referrer, thereby attributing more self-interested motives and more counter-organizational motives to the hiring manager in such situations. These motives are then associated with harsher moral judgments of the hiring manager, which in turn lead to less support for the hiring decision. We find support for our model in two experimental studies and two field studies. We discuss implications for the literature on referral practices, ethics, and observers' reactions to power dynamics.


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