A fundamental problem faced by employers is how to elicit effort from employees. Most economic models suggest that employers meet this challenge by monitoring employees carefully to prevent shirking. But there is another option that relies on heterogeneity across employees, and that is to screen job candidates to find workers with a stronger work ethic who require less monitoring. We might therefore expect employers who screen candidates more intensively to monitor them less. Using data from a national sample of US employers, we find that employers who screen applicants more intensively for factors that should predict work ethic also monitor employees less and also make greater use of systems such as teamwork where monitoring by supervisors is more difficult. This screening is also associated with higher wages, higher employee productivity, and lower involuntary turnover rates. Screening for other attributes, such as work experiences and academic performance, does not produce these results.
Employee Screening, Monitoring, Work Ethic, High Performance Work Practices, Principal-Agent Model.
Asian Studies | Behavioral Economics | Labor Economics
American Economic Review
American Economic Association
HUANG, Fali and Cappelli, Peter.
Applicant Screening and Performance-Related Outcomes. (2010). American Economic Review. 100, (2), 214-218. Research Collection School Of Economics.
Available at: http://ink.library.smu.edu.sg/soe_research/5
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