Nava Ashraf, London School of Economics and Political Science
Oriana Bandiera, London School of Economics and Political Science
Virginia Minni, University of Chicago
Abstract: Firms traditionally use incentives to align their goals with the workers’. In this
paper, we evaluate a firm’s attempt to do the opposite: encouraging employees to
realize their own goals and ask whether those can be met at work. They do so by
means of a day-long workshop to “discover your purpose”, a reflection process of
pivotal life experiences, which we randomize among 3000 employees in 14 coun-
tries. We track outcomes over the subsequent two years and find that the work-
shop leads to an increase in worker performance, driven by the bottom tail either
leaving or becoming more productive. Worker pay also increases by 4 percent.
The results, which are stable over two years, indicate that the workshop doubles
the probability of worker exits and increases the probability of lateral transfers by
18 percent. We also find evidence of a trade-off between meaning and pay in the
control group which disappears among the treated, who are also less likely to list
“work-life balance” as a leading concern. These point towards the potential mech-
anism: a greater understanding of personal meaning via a coherent narrative of
one’s past memories and present work, which can permanently decrease the cost
of effort.
Abstract: Managing CEO succession is one of the board’s most important tasks. We develop a dynamic model of CEO succession to analyze executive hiring, firing, and entrench- ment. The board learns about the CEO’s and successor’s ability and can decide to replace the executives internally or externally. Our model explains the board’s prefer- ence towards internal CEO successions, which become more likely with more efficient executive labor markets. We also demonstrate that the CEO’s ability to sabotage the successor can make the CEO more entrenched but can also backfire and get the CEO fired.
Abstract: Diversity and inclusion (D&I) is becoming an essential factor for many workers. Yet, little is known about what drives the significant variation in firm D&I. This paper identifies CEOs' early-life exposure to community diversity as an important factor associated with more D&I policies, more women among the top-paid executives, more minority and female employees, and a lower probability of facing employee discrimination. Supporting a more causal interpretation, the diversity exposure effects depend on the level of integration in the CEO's community while growing up, and the CEO's control over firm policies. Moreover, using a difference-in-differences specification around plausibly exogenous CEO turnovers, to address the endogenous matching of CEOs to firms, provides consistent results.
Discussant: Vineet Bhagwat, George Washington University
