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Building a productive workforce: the role of structured management practices

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  • Christopher Cornwell
  • Ian M. Schmutte
  • Daniela Scur

Abstract

Firms' hiring and firing decisions affect the entire labor market. Managers often make these decisions, yet the effects of management on labor allocation remains largely unexplored. To study the relationship between a firm's management practices and how it recruits, retains and dismisses its employees, we link a survey of firm-level management practices to production and employee records from Brazil. We find that firms using structured management practices consistently hire and retain better workers, and fire more selectively. Good production workers match with firms using structured personnel management practices. By contrast, better managers match with firms using structured operations management practices.

Suggested Citation

  • Christopher Cornwell & Ian M. Schmutte & Daniela Scur, 2019. "Building a productive workforce: the role of structured management practices," CEP Discussion Papers dp1644, Centre for Economic Performance, LSE.
  • Handle: RePEc:cep:cepdps:dp1644
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    Cited by:

    1. Kevin Donovan & Will Jianyu Lu & Todd Schoellman, 2020. "Labor Market Dynamics and Development," Staff Report 596, Federal Reserve Bank of Minneapolis.

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    More about this item

    Keywords

    labor allocation; managers; management practices; productivity;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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