Have Industrial Relations in the UK Really Improved?

Abstract. The number of strikes reported in British industry has been on a downward trend over the past two decades, falling in 1998 to its lowest level since records began. This may indicate that relations within British industry have improved; however, the same period has also witnessed a sharp increase in the number of individual ACAS and employment tribunal cases. We discuss possible reasons for the changes in the patterns of industrial unrest over time and use individual micro‐data to examine whether the observed decline in strike activity has actually been associated with an improvement in perceptions of workplace industrial relations.     

Human Resource Management–Performance Research: Is Everyone Really on the Same Page on Employee Involvement?

Differences in the treatment of involvement in the human resource management (HRM)–performance research stream have been underplayed, as commentaries concentrate on showing that HRM produces a performance premium, and more recently on exploring the mechanisms explaining this. This paper first identifies the two initial concerns of the research stream – the value of employee involvement and the holistic treatment of HRM – and the way these are joined to present a unified view of the area. It then reviews the studies, confirming that involvement has been underplayed or neglected completely, and is only prioritized in a minority. A divide is identified between HRM as an orientation towards fostering employee involvement – seen as a managerial philosophy – and as a technology – a set of practices constituting high‐performance work systems. The paper then argues that acknowledgement of this divide matters, and concludes by drawing out some implications for how we should progress the research stream.     

The Problem Is Fraud: Is the Solution Government Bounties?

Whistle‐blowing is the disclosure of organizational wrongdoing by internal or external parties either within the organization or publicly to outsiders who may be able to effect a positive change in action or activities. Organizations have been encouraged, especially since the passage in 2002 of the Sarbanes–Oxley Act, to establish a culture in which whistle‐blowing is seen as a positive mechanism to correct misconduct rather than a negative attack. This article addresses (1) whistle‐blowing in relationship fraud and (2) governmental “bounties” paid to persons who are willing to provide knowledge of organizational transgressions. The fraud could occur through a variety of mechanisms but, regardless of the fraud's cause, the long‐run result will be harmful to the organization, its employees, its customers, and the society in which the organization operates. The question is whether bounties are the most effective means by which to reduce the harm created by fraud.     

Is Probability the Only Coherent Approach to Uncertainty?

In this article, I discuss an argument that purports to prove that probability theory is the only sensible means of dealing with uncertainty. I show that this argument can succeed only if some rather controversial assumptions about the nature of uncertainty are accepted. I discuss these assumptions and provide reasons for rejecting them. I also present examples of what I take to be non-probabilistic uncertainty.     

Is the Labour Market Adjustment in Poland Surprising?

Abstract. On the basis of the brief review of developments in employment and wages in Poland during the stabilization program in 1990, this paper tries to provide critical comments on the two often expressed opinions: that the fall in employment was surprisingly small compared to the fall in output, and that the tax-based incomes policy played a major role in forcing a huge drop in real earnings. It is argued that the actual proportions of the fall in output and employment were in line with specific features of the “overheated” shortage economy, which existed prior to the stabilization program. Since wages were not a “nominal anchor” for most of 1990, other reasons for the astonishing downward flexibility of real wages are analyzed. It is suggested that during the labour market adjustment, the rational strategy of employees was to accept a large, real wage cut in exchange for keeping their employment. Contrary to widespread opinion, it might also be argued that incomes policy, in a short and medium run, will play a much more important role in containing wage pressure than it has until now.     

Is the German system of corporate governance converging towards the Anglo-American model?

This paper analyses whether the German corporate governance is converging towards Anglo-American practices. We summarise the extant empirical evidence on the various governance mechanisms that economic theory suggests ensure efficiency and describe recent legal developments. We find no clear signs of convergence in form, i.e. the main distinctive features of the German system have remained largely unaltered. However, changes occurred over the last decade (specially in the legal framework) suggest a certain convergence in function, i.e. some governance mechanisms have effectively incorporated aims and/or goals generally associated with the Anglo-American model.

Is corporate governance different for the Lebanese banking system?

This paper investigates the effect of board size and its composition on bank’s performance in an emerging context. This study includes 749 firm years of data on the banking industry in Lebanon from 1992 to 2006. The data contains all nationwide banks in operation in any year over the studied period. Since some banks entered and/or exited over the sample period, there is an unbalanced panel data, where an Ordinary Least Squares regression may create problems of interpretation. Within this framework, we use a fixed-effect model which produces unbiased and consistent estimates of the coefficients. This paper reports that bank performance is positively related to board size. It also identifies a quadratic relationship between bank performance and board independence. Both return-on-assets and return-on-equity first decrease and then increase in direct proportion to the increased percentage of outside directors on the board. This paper sheds some light on the differential impact of corporate governance on firm performance across industries and countries. It concentrates on banks in developing countries that are generally known to suffer from high asymmetric information and where concerns about safety and soundness remain. Hence, it contributes to the existing debate on appropriate regulations for an effective and stable financial system in the Arab world. Also, it complements the Basel Committee standards for bank supervision and capital adequacy reinforcement, and offers regulators some evidence on the relationship between board size and bank performance in a developing country such as Lebanon.     

Employee-of-the-Month Programs: Do They Really Work?

This article investigates Employee-of-the-Month as a technique for sustaining improved performance on a data entry task in two experiments. In both experiments, participants competed as members of a fabricated team for a “Check Processor of the Week” incentive. The first experiment assessed the impact of receiving this incentive. In the second experiment, the incentive was enhanced to include a $50 bonus for the winner. Participants always placed between 2nd and 5th place in order to assess the impact of being an unrewarded runner-up. Overall, results suggest that Employee-of-the-Month programs do not sustain improved performance and may even have detrimental effects.     

Is it the Brazilian Way? Extending the Comparison of Public and Private Organizations

This study investigates the differences in select organizational characteristics, managerial practices and work attitudes among 670 public and private sector workers in Brazil. The results indicate that in some aspects there is a moderation effect by type of organization. For example,when public employees score high on autonomy and task significance, perceive organizational practices as favourable, and keep membership in the same organization, they tend to be more satisfied than private sector workers. Overall, the findings highlight the need for more international comparisons to gain a better understanding of the public-private distinction.     

Do Shareholders Really Prefer Their Executives to Maximize the Equity Value? A Newsvendor Case*

In this article, we study how the operational decisions of a firm manager depend on her own incentives, the capital structure, and financial decisions in the context of the newsvendor framework. We establish a relationship between the firm’s cost of raising funds and the riskiness of the inventory decisions of the manager. We consider four types of managers, namely, profit, equity, firm value, and profit‐equity maximizers, and initially assume that they may raise funds to increase the inventory level only by issuing debt. We show that the shareholders are indifferent between the different types of managers when the coefficient of variation (CV) of demand is low. However, this is not the case when the CV of demand is high. Based on the demand and the firm’s specific characteristics such as profitability, leverage, and bankruptcy costs, the shareholders might be better off with the manager whose compensation package is tied to the firm value as opposed to the equity value. We, then, extend our model by allowing the manager to raise the required funds by issuing both debt and equity. For this case we focus on the equity and firm value maximizer managers and show that our earlier results (for the debt only case) still hold subject to the cost of issuing equity. However the benefit of the firm value maximizer manager over the equity maximizer manager for shareholders is considerably less in this case compared to the case where the manager can only issue debt. The Board of Directors can take these factors into consideration when establishing/modifying the right incentive package for the managers. We also incorporate the notion of the asymmetric information to capture its impact on the board of directors’ decision about the managers’ incentive package.     

Is the Pendulum Swinging Back? Patterns of Skill Change in the Machine-Tool Industry

In this paper, we focus on the results of the Belgian Trend Study. The intention of this study was to examine the prevalence of new production concepts within the widest possible range of Belgian companies in the automobile, machine tool, chemical and clothing industries. The Trend-study aimed to answer the following questions: is the Taylorist division of labour a thing of the past ? What are the alternatives? Are shifts in the division of labour accompanied by another type of personnel policy, and do traditional industrial relations have to make way for this new approach? The methodological concept used had to guarantee that the findings at the level of each industry could be generalized. In this paper, we examine the penetration of new production concepts in the main processing fields of the machine tool industry.     

Is the American health care delivery system ready for change?

In October 1992, the American College of Physician Executives sponsored a study tour to Berlin, Germany, and Amsterdam, Holland. Meetings were held with government officials, third-party payers, and providers, and on-site visits were made at hospitals, clinics, and academic centers. The purpose was to study the health care delivery system in those countries and to share some insights with the countries' hosts on the U.S. system. In a series of reports that began in the July issue of the journal, 5 of the 10 study tour participants describe their impressions of the tour and of the health care systems in the countries that were visited. In this final report, the implications of the German and Dutch systems for reform of the U.S. health care system are discussed.     

The Unemployment Volatility Puzzle: Is Wage Stickiness the Answer?

I discuss the failure of the canonical search and matching model to match the cyclical volatility in the job finding rate. I show that job creation in the model is influenced by wages in new matches. I summarize microeconometric evidence and find that wages in new matches are volatile and consistent with the model's key predictions. Therefore, explanations of the unemployment volatility puzzle have to preserve the cyclical volatility of wages. I discuss a modification of the model, based on fixed matching costs, that can increase cyclical unemployment volatility and is consistent with wage flexibility in new matches.     

Is Imperfect Competition in the Product Market Relevant for Labour Markets?

Recent research in macroeconomics emphasises the importance of imperfect competition in the product market for labour market outcomes. We investigate one aspect of this issue by specifying a dynamic labour demand model where firms face different degrees of competition in the product market and test its predictions for 299 US manufacturing industries. We find that the long-run equilibrium level of industry employment as well as the speed of labour demand adjustment decreases with market power. Our results imply that imperfect competition in the product market explains part of the observed labour market rigidities and also sheds new light on two “stylized facts” in industrial organisation, the observation of procyclical movements in productivity and price–cost margins in concentrated industries.