The theme of this course has been to show that traditional personnel problems can be treated analytically. Below, I list some of the traditional issues that we have considered and give a description of the analysis that we have applied to it.
 

Traditional Problem	Analysis
Training and Turnover, Career Development	Human Capital: Specific v. General
Layoffs, Downsizing and Job Security	Question on the firm that is "top-heavy." Whom to layoff by age. When to buy out and when to fire. How much to pay and which workers will accept.  Chapter 7 in Personnel
Recruitment and hiring the best workers	Capital intensity, risky workers, Self Selection, Signalling (Ch. 8), and Adverse Selection
How to compensate workers, set up incentives, create a salary hierarchy within the firm, promotions and internal labor markets.	Piece Rates vs. Salaries, Tournaments, Safelite, worklife incentives, Informix, Indian Carpets, Internal v. External Promotion - UPS case.
Pay isn't everything. How much to pay in fringes, how much to pay for making work more unpleasant.	Theory of Equalizing Differences, Hedonic Prices, Wage-autonomy example, Index number problems and comparable worth. Pension formulas and their effects on behavior.
Forms of pay	Stock options; incentives, risk, puts and calls.
How to bring about harmony within firms?	Theory of industrial politics. Segregation of types (hawks and doves), structure of the firm's competition.
How much control should workers be given?	Empowering the workforce, delegation of authority with different production processes (Exxon Valdez, Netscape, Portola Valley Shell)  Shared Capitalism
When to outsource and who should be the supplier?	Bentley Clothing
The use of teams	Disjointness, relevance, and communication. Best practices (see lecture 5 and Paish lecture). Incentives, compensation rules, and organization of the workforce. Classroom team exercise