Firing Decisions Research Articles

Using machine learning algorithms with improved accuracy to analyze and predict employee attrition

Human migration is based on pull factors that individuals evaluate when it comes to moving to a different territory. Likewise, employee attrition is a phenomenon that represents the tendency to a reduction in employees within an organization. This research paper aims to develop and evaluate machine learning algorithms, namely Decision Tree, Random Forest, and Binary Logistic Regression, to predict employee attrition using the IBM dataset available on Kaggle. The objective is to provide organizations with a proactive approach to employee retention and human resource management by creating accurate predictive models. Employee attrition has significant implications for an organization's reputation, profitability, and overall structure. By accurately predicting employee attrition, organizations can identify the factors contributing to it and implement data-driven human resources management practices. This study contributes to improving decision-making processes, including hiring and firing decisions, and ultimately enhances an organization's capital. The IBM dataset used in this study consists of anonymized employee records and their employment outcomes. It provides a comprehensive HR data representation for analysis and prediction. Three machine learning algorithms, Decision Tree, Random Forest, and Binary Logistic Regression, were utilized in this research. These algorithms were selected for their potential to improve accuracy in predicting employee attrition. The Logistic Regression model yielded the highest accuracy of 87.44% among the tested algorithms. By leveraging this study's findings, organizations can develop predictive models to identify factors contributing to employee attrition. These insights can inform strategic decisions and optimize human resource management practices.

Pathways to TASER discharge: Qualitative comparative analysis of police use of force

Abstract We used a crisp-set Qualitative Comparative Analysis (csQCA) to analyse of how key conditions interact within police use of force incidents to contribute to Conducted Energy Devices (CED), commonly known by the brand name TASER, being drawn and red-dotted (0), or drawn, red-dotted, and fired (1). Our sample is 22 incidents (11 red-dotted, 11 red-dotted and fired) between one officer and one person subjected to force recorded in the Use of Force Monitoring Forms for CED incidents from one of the 43 police forces in England and Wales. We identify the most parsimonious causal recipes for both outcomes using five causal conditions –i.e. Intoxication, Intelligence, Prior Knowledge, Weapon Possession, and Aggression. We found three different pathways to CED being red-dotted (0) and five distinct pathways to CED being red-dotted and fired (1). Our findings show that reported intelligence and prior knowledge play central roles in shaping causal recipes, and reported aggression by the member of the public is critical to CED firing decisions.

The isolated choice effect: An underlying psychological mechanism influencing racial diversity in organizations.

With the view toward improving the racial diversity in organizations, this work seeks to uncover the reasons why larger groups have an advantage in terms of job opportunities. Based on people's preference for diversity in commodity selection, we propose a potential feature that may exist in human resource management and call it the isolated choice effect, which unconsciously affects the racial diversity of organizations. Specifically, when making selections in isolation (i.e., when they are responsible for selecting a single person at a time), people are less likely to choose the one whose race would increase group diversity than when making selections in collections (i.e., when they are responsible for selecting several people at a time). We set up eight experiments (n = 2,792) in which participants make hiring or firing decisions among choices that are more white people than black people. We find that participants in the isolated choice group are less likely to choose black people, the smaller group, than those in the collective choice group. Our results show a potentially important contributing factor to the underrepresentation of black people in many organizations because hires are often made in isolation while layoffs are often made in collections, which provides a starting point for improving racial diversity in organizations by avoiding the isolated choice effect.

A GLANCE INTO THE WORLD OF GIG ECONOMY: A REVIEW & BIBLIOMETRIC ANALYSIS

Purpose –Comprehensive review of the existing literature has been done to analyze the theoretical concepts and current developments in the domain of Gig Economy. Exploring current trend of Gig Economy is the aim of this paper. Further future research agenda will also be identified & set. Research Method – 526 papers from the web of science database was analyzed. Comprehensive explorations of papers have been done by two tier method.Bibliometric analysis helped to understand current state of affair on this topic. Systematic literature review analysis of few papers was conducted for identifying different domain of research Findings –Extensive review of the existing literature has been provided, based on the bibliometric analysis. This study also highlights future research themes by identifying knowledge gaps based on literature review. Research Limitations/Implications – State of Gig Economy have been explained for few years only. Web of science title search reflected papers for five years only. This research can be extended on the database of Scopus for extended number of years to gain deep insights on this topic. Multiple dynamics of Gig economy has not been explored, which is required to be explored to evaluate its impact specifically in the domain of human resource. All human resource management decisions are required to be taken meticulously not just by evaluating its impact on ROI but also valuing its impact on human mind.Orgnaizations should keep human sentiments, its overall spillover effect in mind while adopting strategies right from human resource planning,recruitment,onbaording,salary framework,training,mentoring to firing. Research of this kind will add human element in hiring & firing decisions. Originality/value – To develop an exhaustive overview & understanding of the research in the area of Gig Economy, bibliometric analysis & literature review has been done. Future researcher will be able to orient their research in the identified area.

Back to basics: fundamental principles of system dynamics and queueing theory

Back to basics: fundamental principles of system dynamics and queueing theory

Informality, regulation and productivity: do small firms escape EPL through shadow employment?

Compliance with labour laws has costs and benefits which depend on the institutional environment in which firms operate. Although several studies have shown a negative effect of informality on firms’ productivity and growth, it is a fact that firms may resort to undeclared employment to escape excessive tax or regulatory burden. Our analysis documents empirically that stricter labour market regulation drives small firms to informality to gain flexibility in hiring and firing decisions. By exploiting the geographical heterogeneity of labour informality across Italian provinces as well as a different firing cost regime for firms above the 15-employee threshold, we provide evidence that firms facing stricter employment protection regulation adjust less in the formal labour market when the cost of accessing informal employment is lower. As a result, we show that an easier access to the informal labour market (partially) offsets the negative effects of stricter labour market regulation on productivity.

The Effects of Biasing Performance Measurement Systems on Incentives and Retention Decisions

ABSTRACTWe examine a principal–agent setting in which the principal uses a performance measurement system for multiple purposes—to provide incentives and for retention decisions. The principal chooses the nature and extent of bias in the system, which determines whether the performance report is stringent, neutral, or lenient relative to the unobservable actual outcome. We show that when the report is used only for incentive purposes (an incentive role), stringency alleviates moral hazard. On the other hand, when the principal's objective is to minimize the cost from incorrect retention and firing decisions (a fit evaluation role), there is a demand for leniency. Surprisingly, however, we show that adding a fit evaluation role to a system serving an incentive role can accentuate the demand for stringency because stronger incentives can also indirectly improve retention decisions.

Outcome based accountability: Theory and evidence

A firm's payoffs can often depend on whether it exceeds a threshold of performance. In a principal-agent setting, we demonstrate that the optimal contract induces efficient effort by basing firing decisions solely on whether the agent was successful, even though the absolute level of performance is more informative. We test the predictions of our model using thirty seasons of NFL data. We find that a coach is 6 percentage points more likely to be fired after a close loss; beyond this, the margin of victory has no significant impact on firing probabilities despite being more informative about future success. Also consistent with the predictions of our model, coaches maximize team effort (by playing their best players) when doing so has the largest impact on the probability of winning.

Practical Applications of Does Past Performance Matter in Investment Manager Selection?

<h3>Practical Applications Summary</h3> As the fine print reminds us time and again, past performance is not an indication of future results. But institutional and retail investors usually focus heavily on recent performance in selecting a manager or mutual fund selection. Few pension trustees, investment officers, or their consultants seem to measure a prospective manager’s capital asset pricing model (CAPM) or Fama–French alpha, or other performance measures in making hiring and firing decisions. Thus, investors seem to expect that the kind of outperformance they value from a manager persists over time and leads to future outperformance against the same benchmark. Authors <b>Bradford Cornell</b>, <b>Jason Hsu</b>, and <b>David Nanigian</b> found evidence to contradict this assumption. In their article Does Past Performance Matter in Investment Manager Selection? published in the Summer 2017 issue of <b><i>The Journal of Portfolio Management</i></b>, they find that the investment manager selection methodology commonly employed by industry practitioners turns out, in fact, to be a detriment to performance, and selecting losers can provide significantly better results than selecting winners.

Financial constraints in search equilibrium: Mortensen Pissarides meet Holmstrom and Tirole

A key lesson from the Great Recession is that firms’ leverage and access to finance are important for hiring and firing decisions. It is now empirically established that bank lending is correlated with employment losses when credit conditions deteriorate. We provide further evidence of this and make causal inferences on the effect of leverage on job losses drawing on a new firm-level dataset that we assembled on employment and financial positions of European firms. Yet, in the Diamond Mortensen Pissarides (DMP) model there is no role for finance. All projects that display positive net present values are realized and financial markets are assumed to be perfect. What if financial markets are not perfect? Does a different access to finance influence the firm’s hiring and firing decisions? The paper uses the concept of limited pledgeability proposed by Holmstrom and Tirole to integrate financial imperfections and labor market imperfections. A negative shock wipes out the firm’s physical capital and leads to job destruction unless internal cash was accumulated by firms. If firms hold liquid assets they may thus protect their search capital, defined as the cost of attracting and hiring workers. The paper explores the trade-off between size and precautionary cash holdings in both partial and general equilibrium. We find that if labor market frictions disappear, so does the motive for firms to hold liquidity. This suggests a fundamental complementarity between labor market frictions and holding of liquid assets by firms.

Not in My Community: Social Pressure and the Geography of Dismissals

We investigate the impact of local social pressure on firms’ firing decisions. Using linked employer-employee data, we show that secondary establishments located further away from headquarters have higher dismissal rates than those located closer. The effect of distance on dismissals is stronger, the greater the visibility of the firm in the local community of its headquarters and the larger the degree of selfishness of that community. We show that these findings can be explained by the social pressure exerted by the communities where firms’ headquarters are located, which induces CEOs to refrain from dismissing at short distance from their headquarters.

Facebook fired: Legal perspectives and young adults’ opinions on the use of social media in hiring and firing decisions

In this exploratory study, we examine young adult undergraduates’ (n=448) opinions regarding the use of social media for employment decisions, a practice that has been highlighted in the popular press and recent legal cases. Most of the young adults in our sample were not in support of this practice (only one third were), and most expressed a liberal view of what should be permissible for posting on social media without the threat of job termination (e.g., less than half believed that posting illegal sexual behavior online should result in termination). Additionally, those who were most opposed to using social media in employment decisions were older, had less self-control, were more endorsing of the hookup culture, and were more open to experience. We discuss these findings with regard to current social media/work life issues, suggesting that: (1) these opinions may affect companies and legal entities who are developing social media policies, but also (2) that young adults need to be aware that regardless of their opinions on the practice, their social media use could have long-term effects on their careers.

AN INCENTIVE THEORY OF MATCHING

This paper presents a theory of the labor market matching process in terms of incentive-based, two-sided search among heterogeneous agents. The matching process is decomposed into its two component stages: the contact stage, in which job searchers make contact with employers, and the selection stage, in which they decide whether to match. We construct a theoretical model explaining two-sided selection through microeconomic incentives. Firms face adjustment costs in responding to heterogeneous variations in the characteristics of workers and jobs. Matches and separations are described through firms' job offer and firing decisions and workers' job acceptance and quit decisions. Our calibrated model for the United States can account for important empirical regularities, such as the large volatilities of labor market variables, that the conventional matching model cannot.

Volatility, Labor Heterogeneity and Asset Prices

This paper shows that a firm&amp;amp;#x27;s reliance on skilled labor is an underlying determinant of its exposure to aggregate volatility risk. I present a model in which firms make hiring and firing decisions in an environment of time-varying aggregate volatility, and face linear adjustment costs that increase with the skill of a worker. In the model, an increase in aggregate volatility slows a firm&amp;amp;#x27;s labor demand reaction to changes in economic conditions, reducing its ability to smooth cash flows. The rise in aggregate volatility has a more pronounced impact on firms with a high share of skilled labor because their labor is more costly to adjust. Therefore, the compensation for volatility risk and its contribution to risk compensation increases with a firm&amp;amp;#x27;s reliance on skilled labor. I empirically test the implications of the model using occupational estimates to construct a measure of a firm&amp;amp;#x27;s reliance on skilled labor, and find a positive and statistically significant cross-sectional relation between the reliance on skilled labor and expected returns. In times of high aggregate volatility, firms with a high share of skilled workers earn an annual return of 2.7% above those with a high share of unskilled workers. This spread reduces by one third in times when volatility is back to normal.

How does employment protection legislation influence hiring and firing decisions by the smallest firms?

This paper examines the impact of employment protection legislation (EPL) on hiring decisions by own-account workers and firing decisions by very small firms (one to four employees). Using data from the EU-15 countries, our results show that the strictness of employment protection legislation is negatively related to both these types of decisions, and hence, to labour mobility among the smallest firms. This new evidence may be useful for governments aiming to create a more enabling macro-environment for employment and productivity growth.

Institutional Rigidities and Their Effects on Labor Demand in Turkey

This study analyzes the effects of one of the institutional rigidities in Turkish labour market; job security regulations introduced with new labour code legislated in 2003, on the labour demand. By examining the periods before and after the year 2003 with panel data methods, the changes in the responsiveness of labour demand to the changes in labour costs are investigated. In the study in which TURKSTAT Manufacturing Industry Statistics are used, it is found that the responsiveness of labour demand to the changes in labour costs increased after 2003. It is concluded that the labour costs and job security regulations which influence these costs indirectly are effective on the hiring and firing decisions of employers. When a distinctive analysis based on gender is made, it is found that while the results related demand for male workers are similar with the total demand estimates; the demand for female workers does not have a significant response to the changes in labour costs. Estimates in which the openness variable is included show that openness effects labour demand in negative direction.

Efficiency and Managerial Performance in FBS College Football

This article develops a model of managerial efficiency for National Collegiate Athletic Association’s top division college football coaches. The derived efficiency measures are then linked to the hiring and firing process. The work concludes with an evaluation of the effect of head coach succession on team performance. This study evaluates coaching efficiency in terms of both use of talent and recruiting talent. The constructed efficiency rankings are used to evaluate hiring and firing decisions and determine the degree that each type of efficiency plays in these decisions. Last, the efficiency of the market is assessed by evaluating whether universities are making a good choice and are able on average to improve performance when replacing an underperforming coach. The empirical results indicate that both constructs of efficiency matter. Coaches who exhibit high level of both types of efficiencies regularly move up to the most lucrative jobs. Replacement of poor performing coach is most often a wise decision.

Reforming the labor market and improving competitiveness: an analysis for Spain using FiMod

This paper uses an extended version of “FiMod—A DSGE Model for Fiscal Policy Simulations” (Stahler and Thomas Econ Model 29:239–261, 2012) with endogenous job destruction decisions by private firms to analyze the effects of several currently discussed labor market reforms on the Spanish economy. The main focus is on the firms’ hiring and firing decisions, on the implications for fiscal balances and on Spain’s international competitiveness. We find that measures aiming at reducing (policy-induced) outside option of workers, such as a decrease in unemployment benefits, public wages or, to a lesser extent, public-sector employment, seem most beneficial to foster output, employment, international competitiveness and fiscal balances. Decreasing the unions’ bargaining power also accomplishes this task. Our simulation suggests that reforming employment protection legislation does not seem to be a suitable tool from the perspective of improving international competitiveness. All measures imply (income) redistribution between optimizing and liquidity-constrained consumers. Our analysis also suggests that those reforms that are beneficial for Spain generate positive spillovers to the rest of EMU, too.

Fiscal stimulus and labor market policies in Europe

Several contributions have recently assessed the size of fiscal multipliers both in RBC models and in New Keynesian models. This paper computes fiscal multipliers within a labor selection model with turnover costs and Nash bargained wages. We find that demand stimuli yield small multipliers, as they have little impact on hiring and firing decisions. By contrast, hiring subsidies, and short-time work (German “Kurzarbeit”) deliver large multipliers, as they stimulate job creation and employment.

Forced Manager Turnovers in English Soccer Leagues

The authors conduct an empirical analysis of a hand-collected sample of 2,376 turnovers of soccer managers in the four major English leagues in the seasons from 1949-1950 to 2007-2008. While the relation between the probability of a manager being fired and long-term performance remained remarkably stable, both the absolute frequency and the sensitivity of firing decisions on the outcome of recent matches steadily and significantly increased during the six decades covered by the sample. This is likely to reflect the increased level of competition in and economic importance of the English soccer leagues.