Why Do Temporary Help Firms Provide Free General Skills Training?

Nominally free, unrestricted training in portable computer skills is offered by the majority of U.S. temporary help supply (THS) establishments, a practice that is inconsistent with the competitive model of training. This paper asks why temporary help firms provide free general skills training. The answer proposed is that in addition to skills formation, training plays an informational role at THS firms by eliciting private information about worker ability. The model is built on the premise that training is more productive and therefore valuable to high ability workers. Firms offer a package of training and initially lower wages that induces self-selection. Workers of high perceived ability choose training in anticipation of a steeper wage profile while low ability workers are deterred by limited expected gains. Firms profit from their sunk training investment via their short-run informational advantage about ability and thereby limited monopsony power. Market competition among THS firms reduces employer rents, yielding higher wages and more training. Detailed tests of the model using representative establishment data on wages and training find strong support. The analysis demonstrates that beyond providing spot market labor, THS firms gather and sell information about worker quality to clients. The rapid growth of THS as a labor market information broker implies that the demand for worker screening is rising.

Voluntary Turnover and Job Performance: Curvilinearity and the Moderating Influences of Salary Growth, Promotions, and Labor Demand

In this study we investigated the relation between job performance and voluntary employee turnover for 5,143 exempt employees in a single firm in the petroleum industry. As hypothesized, we found support for Jackofsky\u27s (1984) curvilinear hypothesis as turnover was higher for low and high performers than it was for average performers. Three potential moderators of this curvilinearity were examined in an attempt to explain conflicting results in the performance turnover literature and contradictory predictions from turnover models. As predicted, pay growth, promotions, and labor demand each differentially influenced the turnover patterns of low, average, and high performers. Most notably, paying high performers according to their performance predicted substantial decrements in turnover. A utility analysis indicated that the benefits of paying high performers according to their performance more than offset the costs and that such an approach was a superior strategy when compared to a more egalitarian pay growth policy

Collective Turnover at the Group, Unit, and Organizational Levels: Evidence, Issues, and Implications

Studies of the causes and consequences of turnover at the group, unit, or organizational level of analysis have proliferated in recent years. Indicative of its importance, turnover rate research spans numerous academic disciplines and their respective journals. This broad interest is fueled by the considerable implications of turnover rates predicting broader measures of organizational effectiveness (productivity, customer outcomes, firm performance) as well as by the related perspective that collective turnover is an important outcome in its own right. The goal of this review is to critically examine and extract meaningful insights from research on the causes and consequences of group, unit, and organizational turnover. The review is organized around five major “considerations,” including (1) measurement and levels of analysis issues, (2) consequences, (3) curvilinear and interaction effects, (4) methodological and conceptual issues, and (5) antecedents. The review concludes with broad directions for future research

Unemployment, Vacancies and Local Labor Markets

Unemployment rates in the U.S. vary considerably over time and across local areas. Economists have long been concerned with explaining these variations and have attempted to distinguish various components of unemployment to explain these variations in rates. Holzer uses firm-level data on job vacancies, sales growth, and wages within and across a group of 28 local labor markets to examine these issues.https://research.upjohn.org/up_press/1108/thumbnail.jp

Employee Compensation: Research and Practice

[Excerpt] An organization has the potential to remain viable only so long as its members choose to participate and engage in necessary role behaviors (March & Simon, 1958; Katz & Kahn, 1966). To elicit these contributions, an organization must provide inducements that are of value to its members. This exchange or transaction process is at the core of the employment relationship and can be viewed as a type of contract, explicit or implicit, that imposes reciprocal obligations on the parties (Barnard, 1936; Simon, 1951; Williamson, 1975; Rousseau, 1990). At the heart of that exchange are decisions by employers and employees regarding compensation

Why Do Firms Use Fixed-Term Contracts?

This paper investigates the reasons why firms use fixed-term contracts.Two distinctive features of these contracts - reduced firing costs and the prohibition of contract rollover - are highlighted. Firms' decision related to temporary contracts - the choice of the contract on offer and contract conversion - are modeled within standard adjustment costs and matching settings. Regression analysis is performed on the stock of fixed-term contracts and the flows of temporary workers to permanent positions. Results from a beta-binomial regression model indicate that screening workers for permanent positions is the single most important reason why firms use this type of contract.Fixed-Term Contracts, Adjustment Costs, Temporary Employment

Is It Worth It To Win The Talent War? Evaluating the Utility of Performance-Based Pay

While the business press suggests that “winning the talent war,” the attraction and retention of key talent, is increasingly pivotal to organization success, executives often report that their organizations do not fare well on this dimension. We demonstrate how, through integrating turnover and compensation research, the Boudreau and Berger (1985) staffing utility framework can be used by industrial/organizational (I/O) psychologists and other human resource (HR) professionals to address this issue. Employing a step-by-step process that combines organization-specific information about pay and performance with research on the pay-turnover linkage, we estimate the effects of incentive pay on employee separation patterns at various performance levels. We then use the utility framework to evaluate the financial consequences of incentive pay as an employee retention vehicle. The demonstration illustrates the limitations of standard accounting and behavioral cost-based approaches and the importance of considering both the costs and benefits associated with pay-for-performance plans. Our results suggest that traditional accounting or behavioral cost-based approaches, used alone, would have supported rejecting a potentially lucrative pay-for-performance investment. Additionally, our approach should enable HR professionals to use research findings and their own data to estimate the retention patterns and subsequent financial consequences of their existing, and potential, company-specific performance-based pay policies

On Becoming a Strategic Partner: The Role of Human Resources in Gaining Competitive Advantage

Although managers cite human resources as a firm\u27s most important asset, many organizational decisions do not reflect this belief. This paper uses the VRIO (value, rareness, imitability, and organization) framework to examine the role that the Human Resource (HR) function plays in developing a sustainable competitive advantage. We discuss why some popularly cited sources of sustainable competitive advantage are not, and what aspects of a firm\u27s human resources can provide a source of sustainable competitive advantage. We also examine the role of the HR executive as a strategic partner in developing and maintaining competitive advantage within the firm