Recession, HR and Change

28 Pages Posted: 2 May 2011

See all articles by Lasse B. Lien

Lasse B. Lien

Norwegian School of Economics (NHH)

Tore Hillestad

Norwegian School of Economics (NHH)

Date Written: April 28, 2011

Abstract

We document how the recession in the wake of the financial crisis created a general surge in pro-change attitudes and behavior. Next, we examine variation across firms with respect to this change boost. In particular we focus on how and why a firm’s use of HR-measures such as training, pay changes and layoffs matters. We find that training and layoffs increases the relative size of the effect, while pay cuts reduce it. We make sense of these findings by looking at managers’ choice among HR-measures as a signal used by employees to determine their employment risk. The level of employment risk is in turn linked to employees’ investments in change in a nonlinear, U-shaped fashion.

Keywords: Change, Recession, Human Resources, Signaling

JEL Classification: M12, M51, M52, M53

Suggested Citation

Lien, Lasse B. and Hillestad, Tore, Recession, HR and Change (April 28, 2011). Available at SSRN: https://ssrn.com/abstract=1825488 or http://dx.doi.org/10.2139/ssrn.1825488

Lasse B. Lien (Contact Author)

Norwegian School of Economics (NHH) ( email )

Helleveien 30
Bergen, 5045
Norway
+47 55959726 (Phone)

Tore Hillestad

Norwegian School of Economics (NHH) ( email )

Helleveien 30
Bergen, 5045
Norway
+4755959567 (Phone)

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