Exam 14: Attracting and Retaining Qualified Employees

In the basic competitive model of labor markets we assume that:

When a company is very dependent on firm-specific human capital, it makes sense for the company to:

The extra wage that is paid to an individual to attract her to a less desirable job is called:

Self-selection:

There are several assumptions that are the basis of the operation of the benchmark competitive labor market. Which of the following is not one of these assumptions?

Large company-paid employee benefits packages can alter behavior and encourage:

What are internal labor markets and what is an important characteristic in these markets?

The Occupational Safety and Heath Administration attempts to stop safety violations in business through inspections and fines. Though workers are supposed to earn a premium wage for working in more risky environment, why might the OSHA inspections be a good idea?

The owners of Market Analysts, a business and economics consulting firm, are big believers in paying benchmark competitive wages. They pay all (non-legally specified) compensation in wages. If the employee wants a benefit, the company has an insurance program but it comes out of the paycheck. Market Analysts tends to hire very young workers just out of college. They are energetic and work hard, but after two years they tend to leave for other firms, taking valuable training lessons with them. If Market Analysts want to keep its employees, what changes should it make to the terms of employment offered to new employees?

Since the Internet became a common tool for business, employees at Plain Truth Advertising have maintained a semi-secret web site where wages of employees are published and comparative salaries of friends at other advertising agencies are also published. Employees at Plain Truth have noticed that wage dispersion of similarly ranked employees has shrunk dramatically in the past five years. What happened?

The value of human capital is determined by:

For a given compensation potential (isocost curve), an employee with a large family will more likely pick a wage/benefit mix that emphasizes:

The salary gains from specific training in human capital tend to go to the:

Over ½ of all the men and ¼ of all the women in the US:

If a firm in a competitive labor market offers less than the market wage rate if it will

The Peter Principle is a ______ component of an internal promotion and advancement system for employees.

What roles do human capital and compensating differentials play in shaping the wage that a firm will pay a new employee?

If a firm is inundated by qualified employees when it advertises a job opening and the firm's quit rate is unusually low, then the firm is probably paying:

How can firms survive in the long run if mandatory retirement is illegal, and if firms are stuck with older workers whose productivity might technically have fallen over time?

Explain the effect of self-selection on compensating wage differential.