Summary: Economics Of Personnel And Human Resource Management. | Gunderson

Read the summary and the most important questions on Economics of personnel and human resource management. | Gunderson

• 1 Abstract and introduction

• What is the subject of the paper of Gunderson?

  Economics and personnel. These economics tend to deal with the internal labour market of firms, where HR policies and workplace practices tend to be governed by international rules and authority more than by prices.
  

• What has personnel economics to do with the paper?

  It can provide explanations for a variety of phenomenon that otherwise seem difficult to explain or even paradoxical: for ex. the payment of exorbitant (overdreven) CEO salaries who are only a bit better than a serieus of vice presidents. The economic of personnel tends to emphasize that such phenomenon can often be explained as the behavioural outcome of the rational choises made by individuals and firms,
  

• 2 Fixed hiring costs

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• What is meant with labour hoarding (hamsteren van werk) ?

  Employers may also rationally engage in labour hoarding in times of slack demand (overbodige werknemers aanhouden, i.p.v. dat je ze ontslaat en vervolgens het risico loopt om weer medewerkers aan te moeten nemen als de vraag toeneemt.
  

• 3 Deferred compensation

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• Firms often pay deferred of blackloaded compensation to employees, young workers are underpaid relative to their productivity and overpaid relative to their productivity when they are older. Deferred compensation may be a rational compensation policy for a variety of reasons. Which 3? (Gunderson)

  1 It may deter (afhouden) unwanted turnover
  2 It may induce (veroorzaken) work effort
  3 Reduces the need for constant monitoring of performance
  
  

• 4 Pensions and mandatory retirement

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• How are pensions seen by employees and employers?

  As a form of forces saving (besparen van krachten) -> employees
  Benevolence (welwillendheid) -> Employers
  

• How is mandatory retirement seen in the most positive and the most negative way?

  For young workers: as a policy that opens up job and promotion opportunities.
  At the worst it reflects age discrimination. In deferred compensation systems here wages exceed (overschrijden) productivity for older workers, there has to be an end date to the contractual arrangement (mandatory retirement), otherwise wages will exceed productivity for an infinite period.
  

• 5 Compensation as tournament prizes

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• What is meant with compensation as tournament prizes?

  The prizes are fixed and contestants (deelnemers aan het toernooi) compete for the prizes on the basis of their perfroamce relative to other contestants. The increment of the prize gets larger when the reamining number of contestants gets smaller. The winner gets a super prize.
  

• 6 Teams, cooperation and egalitrian pay structures

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• How can you prevend the disadvantages from tournaments?

  With a more egalitarian pay structure. This may merited (kan worden verdiend) if it is difficult to disentangle (ontwarren) the individual performance from that of the team, this is good if risk taking it not important and team effort is. Organisations shoul try to encourage internal competition amongst teams, so everybody's effort will be the same of increases.
  

• 7 Option values

• In evaluating the true value of a salary it is important to also incorporate the option value. What is this?

  The option to continue working and earning future salaries incl. the option of a prize salary. An org. that provides few promotion opportunities may have to pay higher salaries to compensate for the lack of such promotion opportunities. This is another reason that CEO salaries are so high, because there ar no promotion opportunities left.
  

• 8 Compensating wage premiums

• What are compensating wage premiums?

  A framework for valuing the various nonwage aspects of a job as risk, unpleasant working, work schedules, layoff probabilities, pension benefits.