Chapter 15 presents the following content: The best employment relationships are a combination of formal agreement and implicit understandings, utilization of markets within the firm requires careful review, communication can be used to empower workers – but benefits to the firm must be clearly understood, the prisoners dilemma is solved through trust and repeated interaction, bottom line. | Chapter 15: The Employment Relationship 4/8/2013 Chapter 15: The Employment Relationship Employment as an Economic Transaction Perfect Competition Imperfect Competition Complex Contracting Sorting and Investments in Human Capital Job Design Pay for Performance Summary Communication Between Management and Workers Communication from Management to Workers Communication from Workers to Management Employee Power and Earnings Profile The Optimal Level of Worker Consultation Improving Cooperation From the Prisoner’s Dilemma to Employment Reputation and the Employment Relationship Investing in Reputation History Consistency First Impressions Economies of Scale Leadership Corporate Culture and Centralized Human Resource Policies Summary 4/8/2013 A Jigsaw Puzzle Start w/ strategy, & knowledge needed to implement leads to cascade of related org. design policies policies should not just match strategy, but also complement each other example from above: “Give stronger incentives if sorting for | Chapter 15: The Employment Relationship 4/8/2013 Chapter 15: The Employment Relationship Employment as an Economic Transaction Perfect Competition Imperfect Competition Complex Contracting Sorting and Investments in Human Capital Job Design Pay for Performance Summary Communication Between Management and Workers Communication from Management to Workers Communication from Workers to Management Employee Power and Earnings Profile The Optimal Level of Worker Consultation Improving Cooperation From the Prisoner’s Dilemma to Employment Reputation and the Employment Relationship Investing in Reputation History Consistency First Impressions Economies of Scale Leadership Corporate Culture and Centralized Human Resource Policies Summary 4/8/2013 A Jigsaw Puzzle Start w/ strategy, & knowledge needed to implement leads to cascade of related org. design policies policies should not just match strategy, but also complement each other example from above: “Give stronger incentives if sorting for talent is more important effort is more costly to employees effort has greater impact on firm value the employee has valuable specific knowledge intrinsic motivation is relatively low or distorts behavior the evaluation is more effective less risky, distorted, or manipulable well balanced across multiple tasks subjective evaluations are trusted more” 4/8/2013 Start with Strategy Product + strategy + environment drive the key knowledge you need to create & use job design & decision making follow from that this is why one buzzword does not work for all firms Key questions “Who / what / where / when / why?” emphasize ex ante optimization, continuous improvement, or both? complexity, instability & unpredictability push toward continuous approach do managers tend to be biased toward centralization? 4/8/2013 Employment as an Economic Transaction Most transactions occur in imperfect markets, owing to Thin supply or demand Imperfect information Legislative or other imposed requirements .
