1/16/17
Chapter 0: Introduction to the Course
o
What is Personnel Economics?
o Personnel Economics studies the selection and motivation of employees in a workplace.
o In addition to picking the ‘right’ people from a pool of applicants (screening, references,
interviews) selection also includes:
Best not might be the best
Assembling and attracting an applicant pool:
o -where (how broadly) to search
o -how long to search (vacancy duration).
o -designing job ads and/or application forms
Ex: In China, it is allow to get preference for gender and age.
o -how much to use networks and referrals (informal search)
o -attracting applicants: lowering turnover.
-setting pay/benefits/duties
Level of pay
-structuring pay/benefits/duties
Stock options after several years to retain
-acquiring a reputation as an employer
Selection is also about retention:
o -setting pay/benefits/duties/training, reputation
o -structuring pay/benefits/duties (e.g. with options and other deferred compensation)
o -offer matching policy
o -layoff, dismissal, and leave policy
Preference for seniority or performance or diversity, etc.
o Outside offer matching policy
Motivation
o Motivation means inducing workers to internalize the goals of the enterprise.
o In addition to explicit monetary incentives (“variable pay”), motivation includes:
Variable pay: pay connected to performance
-harnessing intrinsic motivation
-harnessing/being aware of behavioral biases (e.g. framing, reference points)
-setting overall pay generosity and dismissal policy
-wage fairness and inter-worker comparisons
-managing competition among workers (when to use tournaments; how to
structure them)
-inducing (the right kind of) cooperation among workers (team production and
team-based pay)
Personnel Economics is almost never about maximizing profits at workers’ expense, for at least
two reasons:
This study source was downloaded by 100000857259159 from CourseHero.com on 11-18-2022 14:18:33 GMT -06:00
https://www.coursehero.com/file/29934719/Econ-152-Lecture-notesdocx/
Chapter 0: Introduction to the Course
o
What is Personnel Economics?
o Personnel Economics studies the selection and motivation of employees in a workplace.
o In addition to picking the ‘right’ people from a pool of applicants (screening, references,
interviews) selection also includes:
Best not might be the best
Assembling and attracting an applicant pool:
o -where (how broadly) to search
o -how long to search (vacancy duration).
o -designing job ads and/or application forms
Ex: In China, it is allow to get preference for gender and age.
o -how much to use networks and referrals (informal search)
o -attracting applicants: lowering turnover.
-setting pay/benefits/duties
Level of pay
-structuring pay/benefits/duties
Stock options after several years to retain
-acquiring a reputation as an employer
Selection is also about retention:
o -setting pay/benefits/duties/training, reputation
o -structuring pay/benefits/duties (e.g. with options and other deferred compensation)
o -offer matching policy
o -layoff, dismissal, and leave policy
Preference for seniority or performance or diversity, etc.
o Outside offer matching policy
Motivation
o Motivation means inducing workers to internalize the goals of the enterprise.
o In addition to explicit monetary incentives (“variable pay”), motivation includes:
Variable pay: pay connected to performance
-harnessing intrinsic motivation
-harnessing/being aware of behavioral biases (e.g. framing, reference points)
-setting overall pay generosity and dismissal policy
-wage fairness and inter-worker comparisons
-managing competition among workers (when to use tournaments; how to
structure them)
-inducing (the right kind of) cooperation among workers (team production and
team-based pay)
Personnel Economics is almost never about maximizing profits at workers’ expense, for at least
two reasons:
This study source was downloaded by 100000857259159 from CourseHero.com on 11-18-2022 14:18:33 GMT -06:00
https://www.coursehero.com/file/29934719/Econ-152-Lecture-notesdocx/
