 Though I cannot be with you in person today, I'm delighted by the opportunity to present through video. Since I can't pace the floor and wave my hands and make eye contact, however, I've tried to spice up this presentation a bit to keep your attention. But before I dive into my dissertation research, I want to thank the awards committee and the reviewers. I don't even think that my mother made it through my whole dissertation, but our reviewers carefully read seven doctoral dissertations. Thank you. Now onto the research. I'm interested in explaining human capital-based competitive advantages. I think of competitive advantage as capturing more economic profits than the break-even competitor. This essentially means achieving a larger gap between revenues and economic costs than rivals. Applying the same logic to the human capital domain, a human capital-based competitive advantage is when one firm achieves higher economic profits from human capital, or a larger gap between the revenues from human capital and the costs of the incentives required to hold human capital in place. The problem is that excellent theory suggests that human capital-based competitive advantages should be very difficult in markets that rely on primarily general human capital. By definition, general human capital is equally valued across firms, so the revenues from human capital must be equivalent across firms. The worker will obviously join the firm that offers the highest utility from incentives. Firms will increase incentives until the costs of incentives are equal to the revenues from human capital. Workers will follow the higher incentives, but eventually the firms will bid incentives up so that the worker has no better outside option. At this point, the costs of human capital are equivalent to the value from human capital, and the economic profits from human capital are essentially zero. It should be very difficult for any firm to realize greater economic profits than rivals in this situation. Embedded in this traditional logic, however, is the assumption that incentives are essentially generic, meaning that any firm can offer any incentive and no firm has any particular advantage in offering incentives to workers. Now, many of us would immediately challenge this assumption, because we recognize that sometimes firms can offer incentives that are uniquely valuable to workers. Apple, for example, seems to be able to consistently attract and retain top talent while paying only average wages. Anecdotal reports suggest that this is because workers receive some non-pecuniary value from working for the company that makes some of the coolest products in the universe. All else being equal, it is clear why many workers would prefer to work for Apple. Ultimately, the opportunity to work for a company that makes the coolest products in the universe is an incentive that is highly firm-specific. Workers can't get that incentive in any other firm. Let me briefly identify three reasons why we might expect this incentive to be important strategically. First, the worker can't find this incentive elsewhere, so the worker is more likely to stay in the focal firm, all else being equal. Second, the firm would make the coolest products in the universe regardless of whether doing so created value for workers. So even though it is costly to maintain the coolness reputation, the company does this to enhance sales, not to enhance value for workers. So this is a very inexpensive incentive to offer for workers. Third, competitors can't offer this incentive. They simply cannot replicate the underlying resources and capabilities that allow Apple to consistently make cool products. Now at this point, most people would like me to provide a list of highly firm-specific incentives or to place incentives that we know about on the firm specificity continuum. The problem with doing this is that firm specificity is determined by the context in which any incentive is embedded rather than by the properties of the incentive itself. This point presents a key departure from extant organizational literature exploring incentives because extant categorizations focus more on the properties of the actual incentive than on the context in which the incentive is embedded. Consider for example the intrinsic value that comes from loving your work tasks. If we look at this kind of incentive from the perspective of extant categorizations, we see that this is clearly intrinsic because it comes from within the person. It is intangible because there's no material component to this kind of incentive and similarly it's non-pecuniary. But is it firm specific? We just don't have enough information yet. Let's say you love your professorial work tasks such as researching, teaching and learning. Your love for these activities can be very motivating and can clearly impact your performance. But you can engage in these activities at any research-oriented university. This incentive is more tied to your profession than to your institution. Thus, this is an important but quite generic incentive. In contrast, let's say you really love working on some proprietary technology such as the missile guidance system for a top secret stealth bomber or Apple's new device that we don't yet know that we cannot live without. You can't get this intrinsic value elsewhere so in this case it is highly firm specific. Both are examples of intrinsic incentives but only one provides any competitive differentiation between firms. Thus we cannot simply categorize intrinsic incentives as being either firm specific or generic but we must recognize that in some contexts they are highly firm specific and in other contexts they are quite general. Now, if there were time I would walk you through a number of other interesting examples such as Nordstrom's high wage or Lincoln Electric's employment promise to show you how we could take just about any incentive type based on extant categorizations and slide it on the firm specificity scale based on context. Okay, nice story. But how does this contribute to theory? Let me show you by coming back to this comparison. Under traditional labor market assumptions the profits from human capital go to zero but if we relax the generic incentives assumption then we essentially decouple the costs of incentives from the utility those incentives provide to workers. We then allow that the focal firm may be able to offer the same level of worker utility as rivals but do so at lower realized costs by offering firm specific incentives. The key theoretical punchline then is that firm specific incentives may explain human capital based competitive advantages even in markets that rely primarily on general human capital for business performance. A market where traditional strategy theory predicts that such advantages should be extremely difficult if not impossible. Given the theoretical potential I've just described we may wonder then whether some firms are inherently better at offering firm specific incentives and we may also wonder whether firms that offer firm specific incentives actually realize any human capital benefits. These are the two questions I explored empirically. I focused on incentives for software developers because of the heavy reliance on general human capital in this labor market. I designed a survey instrument that focused on the incentives available to software developers and for each incentive essentially asked the question how difficult is it for software developers to find better options outside of your firm for this incentive. I used these survey responses to create a firm level measure of the extent to which the incentives in that firm's bundle are highly firm specific. In a sample of 271 firms I find that smaller firms offer more incentives that are highly firm specific. I argue that small size enhances the firm's ability to offer incentives that workers have a hard time finding elsewhere. This may be evidence for one strategic benefit of smallness. In a sample of 94 firms using developer compensation data and firm level survey data I show that firms that offer more incentives that are highly firm specific have both lower voluntary turnover as well as lower wage tenure slopes than their rivals who offer fewer incentives that are highly firm specific. In other words these firms offer lower monetary increases over time as tenure increases. These findings suggest that firms can in fact realize some human capital benefits from these incentives. So in summary I argue that firm specific incentives may explain human capital based competitive advantages even in markets where traditional strategy theory predicts that such advantages should be difficult if not impossible. I empirically show that these incentives facilitate lower wage tenure slopes and lower dysfunctional turnover rates and I also show that small firms offer significantly more incentives that are highly firm specific than their larger rivals. And with that I'll turn the podium back over to someone in the flesh.