Personnel Economics

by Edward P. Lazear (Editor), Robert McNabb (Editor)

Overview

Over the past twenty years or so there has been a marked increase in the study of personnel issues by labour economists. These studies have explored such topics as incentives, compensation methods, human resource strategies and institutional structures, and have provided an insightful empirical literature rich in the creative use of new data. In these two volumes, the editors bring together many of the theoretical papers which were key in establishing personnel economics as a discipline within economics, as well as a selection of empirical studies which have been important in developing an understanding of the economics of human resource issues.

The editors have written an authoritative introduction to complement their selection.

Product Details

ISBN-13:	9781840648928
Publisher:	Edward Elgar Publishing
Publication date:	04/25/2004
Series:	The International Library of Critical Writings in Economics series , #171
Pages:	1040
Product dimensions:	6.62(w) x 9.62(h) x (d)

About the Author

Edited by Edward P. Lazear, Jack Steele Parker Professor of Economics and Human Resource Management, Graduate School of Business and Morris A. Cox Senior Fellow, Hoover Institution, Stanford University, US and Robert McNabb, Professor of Economics, Cardiff Business School, Cardiff University, UK

Table of Contents

Contents:
Volume I: The Concepts
Acknowledgements
Introduction Edward P. Lazear and Robert McNabb
PART I THEORETICAL FOUNDATIONS
A Basics
1. Gary S. Becker (1962), ‘Investment in Human Capital: A Theoretical Analysis’
2. Stephen A. Ross (1973), ‘The Economic Theory of Agency: The Principal’s Problem’
3. Joseph E. Stiglitz (1975), ‘Incentives, Risk, and Information: Notes Towards a Theory of Hierarchy’
4. Edward P. Lazear (1979), ‘Why Is There Mandatory Retirement?’
5. Bengt Holmström (1979), ‘Moral Hazard and Observability’
6. Eugene F. Fama (1980), ‘Agency Problems and the Theory of the Firm’
7. Assar Lindbeck and Dennis J. Snower (1986), ‘Wage Setting, Unemployment, and Insider–Outsider Relations’
B Tournaments
8. Edward P. Lazear and Sherwin Rosen (1981), ‘Rank-Order Tournaments as Optimum Labor Contracts’
9. Sherwin Rosen (1986), ‘Prizes and Incentives in Elimination Tournaments’
10. Edward P. Lazear (1989), ‘Pay Equality and Industrial Politics’
C Measurement
11. Edward P. Lazear (1986), ‘Salaries and Piece Rates’
12. George P. Baker (1992), ‘Incentive Contracts and Performance Measurement’
13. Margaret A. Meyer (1994), ‘The Dynamics of Learning with Team Production: Implications for Task Assignment’
PART II THEORETICAL ISSUES: PUZZLES, ANALYSIS AND ANSWERS
14. H. Lorne Carmichael (1988), ‘Incentives in Academics: Why Is There Tenure?’
15. Charles Kahn and Gur Huberman (1988), ‘Two-sided Uncertainty and “Up-or-Out” Contracts’
16. Eugene Kandel and Edward P. Lazear (1992), ‘Peer Pressure and Partnerships’
17. Canice J. Prendergast (1995), ‘A Theory of Responsibility in Organizations’
18. Sherwin Rosen (1992), ‘The Military as an Internal Labor Market: Some Allocation, Productivity, and Incentive Problems’
PART III THE JOB
19. Edward P. Lazear (1992), ‘The Job as a Concept’
20. George Baker, Michael Gibbs and Bengt Holmstrom (1994), ‘The Internal Economics of the Firm: Evidence from Personnel Data’
21. Michael L. Wachter and Randall D. Wright (1990), ‘The Economics of Internal Labor Markets’
22. Robert Gibbons and Michael Waldman (1999), ‘A Theory of Wage and Promotion Dynamics Inside Firms’
23. Oliver E. Williamson, Michael L. Wachter and Jeffrey E. Harris (1975), ‘Understanding the Employment Relation: The Analysis of Idiosyncratic Exchange’
PART IV PERSONNEL STRATEGY
24. Casey Ichniowski, Kathryn Shaw and Giovanna Prennushi (1997), ‘The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines’
25. Richard B. Freeman and Edward P. Lazear (1995), ‘An Economic Analysis of Works Councils’
26. Julio J. Rotemberg (1994), ‘Human Relations in the Workplace’
27. Raaj Kumar Sah and Joseph E. Stiglitz (1986), ‘The Architecture of Economic Systems: Hierarchies and Polyarchies’
28. Renée M. Landers, James Rebitzer and Lowell J. Taylor (1996), ‘Rat Race Redux: Adverse Selection in the Determination of Work Hours in Law Firms’
Name Index

Volume II: Personnel Economics and Performance
Acknowledgements
An introduction by the editors to both volumes appears in Volume I
PART I PIECE RATE PAY
1. Edward P. Lazear (2000), ‘Performance Pay and Productivity’
2. Beth J. Asch (1990), ‘Do Incentives Matter? The Case of Navy Recruiters’
3. Sue Fernie and David Metcalf (1999), ‘It’s not What You Pay it’s the Way that You Pay it and that’s What Gets Results: Jockeys’ Pay and Performance’
4. Charles Brown (1990), ‘Firms’ Choice of Method of Pay’
PART II PROFIT SHARING AND TOURNAMENT PAY STRUCTURES, OTHER INCENTIVE SCHEMES
5. Robert Drago and Gerald T. Garvey (1998), ‘Incentives for Helping on the Job: Theory and Evidence’
6. Tor Eriksson (1999), ‘Executive Compensation and Tournament Theory: Empirical Tests on Danish Data’
7. Charles R. Knoeber and Walter N. Thurman (1994), ‘Testing the Theory of Tournaments: An Empirical Analysis of Broiler Production’
8. Daniel M.G. Raff and Lawrence H. Summers (1987), ‘Did Henry Ford Pay Efficiency Wages?’
9. Jonathan S. Leonard (1987), ‘Carrots and Sticks: Pay, Supervision, and Turnover’
10. David G. Blanchflower and Andrew J. Oswald (1988), ‘Profit-Related Pay: Prose Discovered?’
11. Robert McNabb and Keith Whitfield (1998), ‘The Impact of Financial Participation and Employee Involvement on Financial Performance’
PART III EXECUTIVE COMPENSATIONS
12. Michael C. Jensen and Kevin J. Murphy (1990), ‘Performance Pay and Top-Management Incentives’
13. Robert Gibbons and Kevin J. Murphy (1990), ‘Relative Performance Evaluation for Chief Executive Officers’
14. Brian G.M. Main, Alistair Bruce and Trevor Buck (1996), ‘Total Board Remuneration and Company Performance’
15. Jonathan S. Leonard (1990), ‘Executive Pay and Firm Performance’
Name Index

What People are Saying About This

Sherwin Rosen

Lazear sketches a comprehensive survey of a field he has essentially invented. This work has changed the way labor economics is taught in business schools as well as in economics departments and is likely to provoke further changes in the future. He presents rigorous, careful, and highly original economic analysis of a wide variety of personnel practices and empirical phenomena that are essential to the field.

Canice Prendergast

As a primary contributor to the literature pertaining to personnel issues, Edward Lazear has written a book designed to be an overview of recent advances in the field. This book constitutes a formidable achievement and the issues are covered in an interesting and consistent fashion.

Jules Theeuwes

Applying the basic tools of economic analysis Lazear derives in this 160 odd page book new insightful ways of motivating and explaining the applied field of Personnel to the benefit of students as well as scholars, businessmen as well as economists. It is amazing how much extra mileage he gets fueling topics such as employee compensation, evalutation, job design, hiring and firing with economic principles.

James R. Rebitzer

Lazear's book is a great success. It is very clearly and carefully written. Experts in human resources and labor economics will want to own a copy for the excellent summary of Lazear's own work and his assessment of the state of the literature.

Niels Westergard-Nielsen

Ed Lazaear demonstrates in this book in an elegant way that economic arguments have a central role to play in human resource management. With the many examples he also demonstrates that the new Economics of Personnel is a useful tool for practitioners. As a Business School professor myself, I consider Ed Lazear's book as extremely valuable for the teaching of Personnel Economics at Business Schools.

Endorsement

Over the past 20 years Lazear has created and developed the study of the economics of personnel. This volume summarizes his fundamental contributions and provides a guide to economists about how to think systematically about what are loosely called internal labor markets. To human resource practitioners it demonstrates the value of using economic analysis to understand personnel policies.

—Daniel S. Hamermesh, Centennial Professor of Economics, University of Texas

From the Publisher

Lazear sketches a comprehensive survey of a field he has essentially invented. This work has changed the way labor economics is taught in business schools as well as in economics departments and is likely to provoke further changes in the future. He presents rigorous, careful, and highly original economic analysis of a wide variety of personnel practices and empirical phenomena that are essential to the field.

—Sherwin Rosen, Department of Economics, University of Chicago

As a primary contributor to the literature pertaining to personnel issues, Edward Lazear has written a book designed to be an overview of recent advances in the field. This book constitutes a formidable achievement and the issues are covered in an interesting and consistent fashion.

—Canice Prendergast, Graduate School of business, University of Chicago

Lazear's book is a great success. It is very clearly and carefully written. Experts in human resources and labor economics will want to own a copy for the excellent summary of Lazear's own work and his assessment of the state of the literature.

—James R. Rebitzer, Associate Professor at the Sloan School of Management, MIT

Ed Lazaear demonstrates in this book in an elegant way that economic arguments have a central role to play in human resource management. With the many examples he also demonstrates that the new Economics of Personnel is a useful tool for practitioners. As a Business School professor myself, I consider Ed Lazear's book as extremely valuable for the teaching of Personnel Economics at Business Schools.

—Niels Westergard-Nielsen, Director, Professor of Economics, Centre for Labour Market and Social Research

Applying the basic tools of economic analysis Lazear derives in this 160 odd page book new insightful ways of motivating and explaining the applied field of Personnel to the benefit of students as well as scholars, businessmen as well as economists. It is amazing how much extra mileage he gets fueling topics such as employee compensation, evalutation, job design, hiring and firing with economic principles.

—Jules Theeuwes, University of Leiden, co-editor of Labour Economics: an International Journal

Over the past 20 years Lazear has created and developed the study of the economics of personnel. This volume summarizes his fundamental contributions and provides a guide to economists about how to think systematically about what are loosely called internal labor markets. To human resource practitioners it demonstrates the value of using economic analysis to understand personnel policies.

—Daniel S. Hamermesh, Centennial Professor of Economics, University of Texas

Daniel S. Hamermesh

Over the past 20 years Lazear has created and developed the study of the economics of personnel. This volume summarizes his fundamental contributions and provides a guide to economists about how to think systematically about what are loosely called internal labor markets. To human resource practitioners it demonstrates the value of using economic analysis to understand personnel policies.

Editorial Reviews

Lazear (human resources and economics, Stanford) shows that economic analysis can be extended to personnel issues that arise in business on a daily basis. His focus is on compensation and its relation to worker motivation, selection, and teamwork but he also discusses job design, job evaluation, institutional arrangements, and directions for future research. Annotation c. Book News, Inc., Portland, OR (booknews.com)

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