1.1. The experimental approach in science 106 1.1.1. An experimental cornerstone 107 1.1.2. Early labor market field experiments at the Hawthorne plant 108

For the last decade we have been using double-blind survey techniques and randomized sampling to construct management data on over 10,000 organizations across twenty countries. On average, we find that in manufacturing American, Japanese, and German firms are the best managed. Firms in

This paper uses a series of experiments with commercial bank loan officers to test the effect of performance incentives on risk-assessment and lending decisions. The paper first shows that, while high-powered incentives lead to greater screening effort and more profitable lending, their power is muted by both deferred compensation and the limited liability typically enjoyed by loan officers. Second, the paper presents direct evidence that incentive contracts distort judgment and beliefs, even among trained professionals with many years of experience. Loans evaluated under more permissive incentive schemes are rated significantly less risky than the same loans evaluated under pay-for-performance. EPOL, FSE

Using a tried and tested measure of management practices that has been shown to predict firm performance, we survey nearly 250 departments across 100+ UK universities. We find large differences in management scores across universities and that departments in older, researchintensive universities score higher than departments in newer, more teaching-oriented universities. We also find that management matters in universities. The scores, particularly with respect to provision of incentives for staff recruitment, retention and promotion are correlated with both teaching and research performance conditional on resources and past performance. Moreover, this relationship holds for all universities, not just research-intensive ones. 'There is a lot of difference in managing a group of employees in a plant and (managing) faculty members,… Trying to manage faculty members is like herding cats' 'The reason why disputes in academia are so bitter is because the stakes are so low' The publication of the latest national and international university league tables typically makes UK newspaper headlines. The performance of universities, in both research and teaching, matters. Higher education is a strategically important sector and there is evidence that investments in research-type education pay-off in areas, which are close to the world technological frontier This raises the important question of what contributes to universities' success. Beyond the obvious importance of resources,

In this paper we investigate how active labour market policy pro-grams affect firms ’ hiring strategies and how this corresponds to firm performance. First, we propose a theoretical model to understand how counseling and training may affect optimal hiring strategies of firms that face ex ante unobserved heterogeneity of applicants and can hire from the pools of unemployed and employed workers. Next, we test our theoretical predictions on Danish linked employer-employee data. Using a large scale experiment which was conducted in Denmark in 2005-2006, we evaluate whether a greater provision of activation af-fects firms ’ hiring decision. Having found a positive effect of increased provision of active labour market policies on the fraction of new hires coming from unemployment, we then relate this labour force composi-tion effect to measures of firm performance. Our preliminary analysis indicates that firms relying more on the pool of unemployed job seek-ers face higher hazard of exit from the market. This result casts some doubt on the effectiveness of policies activating long-term unemployed on a large scale.

Abstract This paper examines how the allocation of authority within an organization a¤ects workers'incentives and performance, using personnel data from a Chinese newspaper. Relying on an authority change that transferred the right of making editorial decisions from mid-level editors to top editors in four of the eight divisions in the newspaper, I …nd that the authority change 1) improves reporters'performance, while reducing their activities for private gain; and 2) decreases mid-level editors'journalistic initiative. To reconcile these …ndings, a synthesis of two theories on authority and incentives -the vertical and the horizontal allocation of authority -is needed.

In this essay, we review the contributions economists, political scientists, and business management scientists have offered to an understanding of how local school districts, boards of education, school superintendents, and district offices affect student learning and other achievement outcomes of interest; where and how their work differs from that done by students of educational administration; and the implications of their findings for future research.

CEO incentive contracts are commonplace in China but their incidence varies significantly across Chinese cities. We show that city and provincial policy experiments help explain this variance. We examine the role of two policy experiments: the use of Special Economic Zones (SEZs) to attract foreign direct investment (FDI), and the rate at which state owned enterprises (SOEs) were privatised. CEO incentive contracts are negatively correlated with foreign ownership and with the introduction of FDI via SEZs. However, the SEZ effect disappears having accounted for the city-level composition of firms and executives. Rapid SOE privatisation is associated with higher city and firmlevel adoption of CEO incentive contracts, irrespective of the firm's own current ownership status. The positive effect of privatisation is robust to various estimation techniques and model specifications.

Any opinions expressed here are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but the institute itself takes no institutional policy positions. The IZA research network is committed to the IZA Guiding Principles of Research Integrity. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. IZA Discussion Paper No. 7088

Does high involvement management lead to higher pay?