Module 2: L4

Question 1

Labor performance is very hard to predict. Much information about a worker is owned by the worker. What are 3x issues mentioned in the lecture regarding this information?

Answer 1

1. Has to do with experience - tough to gauge
2. Likely to be biased - they want the job
3. Person hiring may not be able to judge

Question 2

What 4x reasons mentioned make performance measures difficult?

Answer 2

1. Can be manipulated
2. Not good estimates of performance
3. Sensitive to change in tech or environment
4. Expensive to acquire

Question 3

What is used to gauge performance measures? What are some examples of these (5x listed)?

Answer 3

Certifications:
1. Continuity or tenure
2. Promotions
3. Craft certification by peers
4. Recruitment within the family
5. Work in union shop

Question 4

There’s an important segmenting factor in the internal labor market: who holds the job now? What are some features of this question (4x listed)?

Answer 4

1. Job mobility is alot less than often assumed
2. Internal job markets are extremely important
3. Younger cohort most vulnerable to demand fluctuations
4. Holding job now is also info about other jobs they can do

Question 5

What are some truths to the segmentation of internal job market (4x listed)?

Answer 5

1. Large organizations are less mobile than smaller ones
2. They have larger internal job markets
3. Certified seniority is often the only criterion
4. Jobs are interconnected so experience in one is relevant to the other

Question 6

Worker controlled recruitment is hiring those in the same line of work. What are some components of this (4x points)?

Answer 6

1. Workers help train, select, and find jobs for younger potential members of the line of work
2. Professions
3. Crafts
4. Top management

Question 7

What are some “downsides” of democratic hiring (4x points)?

Answer 7

1. Don’t hire cheapest labor
2. It undermines their own wages
3. Tend to hire similar people
4. Result is more discriminatory

Question 8

What are some components of family recruitment in small firms (5x points)?

Answer 8

1. Small business owners hire themselves and their family
2. Hire based on perception of trust
3. High rate of failure suggests not best possible workers for the job
4. They are bad predictors of future performance
5. “Structural nepotism”

Question 9

Union membership is a certificate of performance. What were some of the reasons for this (5x listed)?

Answer 9

1. Union workers are on average more productive
2. Firms hiring them are more efficient and can pay higher wages
3. Union contracts are perceived to be fairer
4. Firms can be more selective in hiring
5. Perpetuates selection of higher productivity