People at the center
of firm performance.

Authors

Timothy Gubler · Brigham Young University
Gordon Scott · Washington University in St. Louis

Abstract

Variance decomposition research rarely extends below the business unit, leaving unclear how much of firm performance reflects the people who do the work. Using 2.5 million real estate transactions involving 122,910 agents across 16,822 offices over eighteen years, we separate individual and organizational contributions to production. Individuals account for 37% to 43% of market-adjusted production variance after correcting for estimation noise, compared with approximately 6% for offices when accounting for individual differences. Individual performance persists across organizations, while moves to stronger offices are associated with additional gains. Gains also partly reflect when people move. These findings distinguish organizations that assemble productive people from those that make their people more productive.

About the visual

The graphic uses the estimates in the author-supplied abstract for the September 8, 2026 draft. Individuals account for 37–43% of market-adjusted production variance after correction for estimation noise. Offices account for approximately 6% when individual differences are included. The lighter segment marks the range across estimates, not a confidence interval. The bars start at zero and do not represent all components of a variance decomposition; the shares should not be read as a complete partition or as causal effects.

Abstract

Firms train employees to handle the most demanding situations their jobs may present, yet most daily work calls on only a fraction of that training. We ask how an employee's productivity changes on subsequent repetitions of a task after one repetition demands the highest level of capability for which the role trains, and whether that change depends on how often such repetitions occur. We term these repetitions full-capability episodes and argue that they temporarily activate employees, raising readiness to apply capability they already hold, without any change in that capability. Using over 57 million 9-1-1 calls from U.S. emergency medical services, where dispatch assigns calls quasi-randomly within a shift, we find that unit response times improve by 2.4 to 2.8% (12 to 13 seconds) in the hour after a cardiac arrest or patient death, a magnitude that affects patient wellbeing. The improvement fades within four hours and weakens with accumulated workload. It is reference-dependent, roughly five times larger where such episodes are rare than where they are common, and smaller for Advanced Life Support units that handle acute calls routinely. It also appears after emergent dispatches cancelled before patient contact, indicating that the call on capability, rather than its deployment, drives the response. Human capital utilization thus varies within a role and within a shift, similar firms realize different productivity from similarly trained employees depending on how often work calls on their capability, and underuse carries a productivity cost alongside the costs of overload that prior research emphasizes.

About the visual

An original summary of the author-supplied abstract. The 2.4–2.8% improvement (12–13 seconds) applies to unit response times in the hour after a cardiac arrest or patient death. It is a range of reported effects, not a confidence interval. The improvement fades within four hours and weakens with accumulated workload; it is larger where these episodes are rare. The illustration does not depict an estimated time series or a change in underlying capability.

Abstract

Understanding the emergence of firm-level human capital resources from individual-level human capital is crucial to explaining how firms can create and sustain competitive advantage from their people. We theorize that higher similarity among the individual-level components of a firm’s founding human capital resource leads to higher subsequent average overlap between individuals and the established firm-level human capital resource, and that this higher overlap improves firm performance. Analysis of individual- and firm-level human capital portfolios constructed using data from 872 real estate brokerages suggests that higher individual-level human capital similarity among agents at founding positively relates to individual-firm human capital overlap in future years, and that higher individual-firm human capital overlap positively relates to future firm sales. These results imply that managers from founding onward must carefully craft and manage individual- and firm-level human capital resources to generate persistent performance advantages.

About the visual

An original conceptual illustration based on the author-supplied abstract. Higher similarity in agents’ human capital at founding is positively related to later individual-firm human capital overlap; higher overlap is positively related to future firm sales. The connectors show the proposed sequence of relationships, not quantified or independently established causal effects. The finding concerns similarity in human capital, not demographic similarity.

Abstract

Professional services are credence goods: buyers struggle to evaluate quality before purchase and often even after services. Under these conditions, how do buyers choose among expert providers, and does the way they choose cost them anything? We compare the three signals most prominent in prior work—human capital, relational ties, and reputation—using the population of National Football League contract negotiations from 2007 to 2011: 10,183 agent choices by 6,070 players across 670 certified agents. Conditional logit models show that relational ties dominate selection, accounting for roughly 90 percent of the explanatory power the three signals add; an agent who represents a prospect’s college teammate is roughly eight times more likely to be chosen. Human capital matters only through position-specific experience, and credentials not at all. Reputation gains ground among star players but never overtakes ties. Using contract outcomes, we find that the cheapest signal is not free: among observably similar players with a tied agent available, those who chose the tie signed contracts roughly 16 percent less valuable, a gap that widens within player and disappears only for veterans. In credence goods markets, relationships clear the market for the typical buyer, and the typical buyer pays for it.

About the visual

An original summary of the author-supplied abstract, covering NFL contract negotiations from 2007–2011. The approximately eightfold selection comparison concerns agents who represent a prospect’s college teammate. The approximately 16% contract-value gap compares observably similar players who had a tied agent available and chose that tie versus those who did not. It is an association, not an estimated causal penalty for every player. The abstract reports that the gap disappears for veterans. The two figures describe different outcomes and are not parts of a total.

Abstract

Strategic human capital research has emphasized the importance of leveraging and retaining productive talent. Yet contemporary labor markets offer increasing opportunities for secondary employment, where employees partially reallocate human capital outside the firm without formally leaving. We explore this phenomenon and theorize that internal firm wage structures shape the attractiveness of moonlighting behaviors. Using population-level employer–employee matched data from France, we show that greater vertical wage dispersion—pay differences across hierarchical levels—is associated with lower subsequent moonlighting, particularly among higher-level employees for whom advancement appears attainable. In contrast, horizontal wage dispersion –pay differences across peers—reduces moonlighting among lower-level employees. These findings reconceptualize external engagements as an ongoing effort-allocation decision and identify internal pay structures as strategic levers for limiting human capital leakage.

About the visual

An original conceptual illustration based on the author-supplied abstract. Vertical wage dispersion means differences across hierarchical levels; horizontal wage dispersion means differences among peers. The two relationships are distinguished by the employee groups emphasized in the abstract. The illustration shows direction, not effect size, and does not establish that widening pay gaps will causally reduce moonlighting in every firm.

Abstract

This paper examines the relationship between the autonomous specialization decisions of service professionals and the tacit human capital they develop. As individuals specialize in production in response to market and organizational factors, they develop task-specific human capital which induces them to continue to specialize. Task specificity of human capital benefits the firm due to its higher productivity, even after negative shocks to the market. Individual specialization in response to market forces also leads to human capital overlap, or shared expertise among co-workers, which may have positive and negative impacts on the firm. Using a novel approach that draws on longitudinal data from the Utah real estate industry, we examine these forces empirically and find that task-specific human capital does benefit firms, even after widespread negative market shocks. Overlap also benefits firms, though it is a substitute for task specificity rather than a complement.

About the visual

An original conceptual illustration based on the author-supplied abstract. Task-specific human capital and human capital overlap (shared expertise among coworkers) both benefit firms, but overlap substitutes for task specificity rather than complementing it. The graphic shows two sources of benefit, not an additive decomposition or estimated effect sizes. The abstract reports that the benefits of task specificity persist even after widespread negative market shocks.