Economics 152: Personnel Economics

The core of every organization is its people, and Personnel Economics is the economic study of these Human Resources (HR).

What is Personnel Economics?

Course Syllabus

UCSB Students can access additional information about this course via Gauchospace.

NOTICE TO STUDENTS: Due to capacity constraints in the campus's computer labs some of the exams for this course are usually held outside the normal class hours.

In Winter 2020, these exams will be held in the computer labs, at the following times:

Thursday January 30: Excel Exam—7:00 pm – 8:30 pm,

Thursday March 5: Excel Exam—7:00 pm – 8:30 pm

If you can't make these exam times, please don't sign up for the course-- we cannot make alternative arrangements.

Closer to the date, we will assign you a seat in one of the following computer labs to write the exam: SSMS 1005, 1007, 1303, 1304, or Phelps 1525.

Topics covered in this course include:

Personnel Selection Decisions, such as:

-promotion from within versus external searches

-hiring referred workers versus formal job ads

-choosing candidates from an applicant pool

-inducing (the right) candidates to apply

-retaining top talent

-when to embrace or avoid ‘risky’ hires

Compensation Decisions, such as:

-setting wages relative to the labor market

-fixed versus variable pay: how strongly should pay be tied to performance?

-‘timing gaming’ and other common pitfalls with incentive pay

-do financial incentives ‘crowd out’ workers’ intrinsic motivation?

-should pay be confidential or public?

Managing Interactions between workers, such as:

-competition for promotions as an incentive system

-benefits and pitfalls of a competitive work environment

-motivating teams of workers

-benefits and pitfalls of team-based pay

Tools used in this course include:

-core tools of economics, including budget constraints, indifference curves, choice under uncertainty, and profit- and utility- maximization.

-game theory, applied regression analysis, experimental design and a lot of behavioral economics.

-you’ll become much more adept at using Excel to think through the consequences of alternative business decisions.

Real-world workplaces we study include:

-contract farmers, schoolteachers, bank managers, mortgage originators, software salespeople

-auto glass installers, university professors, UpWork workers, professional athletes, mutual fund managers

-fruit pickers, garment workers, steelworkers, NASA employees, CEOs, Google employees

-and many more.

What will you learn from this course?

You will NOT learn the single, best way to organize pay, incentives and job structure in a company, because there is no such thing.

You WILL gain more insight for which kinds of HR policies are likely to work under which conditions.

Just as important, you will be much better able to anticipate some of the unintended consequences of the many new ideas that are marketed every year as the latest and best way to improve workplace performance.

Supplementary materials for my upcoming textbook, Personnel Economics:

• Downloadable Spreadsheets