Addison Wesley Longman, Inc. © 2000 Industrial Relations Cod Pietro Garibaldi Preliminaries

Addison Wesley Longman, Inc. © 2000 Logistic…… First Part: Lecturer: Pietro Garibaldi Office Number: Via Salasco 5, Room 12 (first floor) Office Hours: Teusday: Assistant: Lorenza Negri Via Salasco 5, Room 10/A

Addison Wesley Longman, Inc. © 2000 Hours…. Lecture Hours: Room Number N25 Monday Monday Tuesday Thursday Classes: (dr. Mattia Makovec) Wednsday:

Addison Wesley Longman, Inc. © 2000 Exam Format and further info… Written format (see handout for details) For further details Lorenza Negri (assistant); SID (third floor) Website…(see below)

Addison Wesley Longman, Inc. © 2000 Web Site You will find: Power Point Presentations Lectures Notes Problem Sets and Solutions

Addison Wesley Longman, Inc. © 2000 A Course in Two Parts First Part: Pietro Garibaldi –Labor Economics –Personnel Economics Second Part:Human Resource Management

Addison Wesley Longman, Inc. © 2000 Labour Economics (LE) Pesonnel Economics (PE) and Human Resource Management (HRM) This course deals with labor, the most important factor in the economic system (there would no economic system without people!). …..but economics has to do with rationality, with cost benefit analysis,…. while people are human beings, they have feelings, culture. Traditionally, LE and HRM specialists have not spoken to each other….

Addison Wesley Longman, Inc. © 2000 Human Resource Managers about Economists …economics can not be useful for managing human resources. Economic theory assumes that individual hate effort, behave opportunistically, have conflicting obejcts. In the economist mind, individuals are lazy, dishonest, and inside firms they have conflicting objectives. (O’Reilly e Pfeiffer 2000)

Addison Wesley Longman, Inc. © 2000 Economists versus HRM Management …all these emphasis on case studies. How can we generalize? In case studies all depends on the speific setting of the firm; To understand the world we need well spelled out theory, starting from obvious assumptions, down to empirical predictions Without models, we do not really learn much

Addison Wesley Longman, Inc. © 2000 ….Economics and Management But you are taking a degree in International Economics and Management! So somehow the two disciplines must have a way to talk to each-other! The spirit of this course, Industrial Relations, is to show that to be a good human resource manager, you need both skills: sound economic analysis and good management experience

Addison Wesley Longman, Inc. © 2000 Part I: the Economics Approach Part Ia: Labour Economics (outside the firm) Part Ib: Personnel Economics (inside the firm) Textbooks: - (ES) Ehrenberg R. and Smith. R. (2002) Modern Labor Economics, Addison Wesley, 8th Edition - (L) Lazear, E., Personnel Economics for Managers, John Wiley & Sons.

Addison Wesley Longman, Inc. © 2000 Syllabus Overview: Labour (LE) I How the Labor Market Works? An overview (key concepts, labour force, unemployment, labour demand, labour supply, equilibrium) II: The Demand for Labour –Short run –-Long run –-Hours/Employment, III: The Supply of Labour –-How people decide labour force participation

Addison Wesley Longman, Inc. © 2000 Labour continues Unions in the Labor Market –What unions do? –How do they negotiate with firms? Unemployment –frictional –structural Let’s move inside the firm…

Addison Wesley Longman, Inc. © 2000 Personnel Economics Economics of Human Resources Human resources today are key to organizational success: “Putting People First..” –High skill workers are difficult to hire, and to retent. –People need motivation. What economics has to say about these issues? A lot –People Respond to Incentives!

Addison Wesley Longman, Inc. © 2000 Recruitment and Hiring –Whom should you hire? –How to get the best applicants? –How to select among different applicants? Motivating through pay systems? –Choice of Compensation system –How Big Should be the Bonus? –How to structure promotion decisions

Addison Wesley Longman, Inc. © further PE Teams –When is it profitable to form teams –Specific motivational issues in teams Work-life considetaions –What should be the life-cycle of wages?

Addison Wesley Longman, Inc. © 2000 What we will not cover! Many practical issues –Legal issues –How to negotatiate with workers –How to organiza HR department –How to organize assesment center We will go inside the firm, but with a theoretical perspectives!