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040688 FK KFK ORPE/PÖ: Advanced Personnel Economics (2011W)

4.00 ECTS (2.00 SWS), SPL 4 - Wirtschaftswissenschaften
Continuous assessment of course work


Note: The time of your registration within the registration period has no effect on the allocation of places (no first come, first served).


max. 50 participants
Language: English


Classes (iCal) - next class is marked with N

Tuesday 22.11. 14:00 - 16:00 Hörsaal 7
Thursday 24.11. 16:00 - 18:00 Hörsaal 7
Tuesday 29.11. 14:00 - 16:00 Hörsaal 7
Thursday 01.12. 16:00 - 18:00 Hörsaal 7
Tuesday 06.12. 14:00 - 16:00 Hörsaal 7
Tuesday 13.12. 14:00 - 16:00 Hörsaal 7
Thursday 15.12. 16:00 - 18:00 Hörsaal 7
Tuesday 10.01. 14:00 - 16:00 Hörsaal 7
Thursday 12.01. 16:00 - 18:00 Hörsaal 7
Tuesday 17.01. 14:00 - 16:00 Hörsaal 7
Thursday 19.01. 16:00 - 18:00 Hörsaal 7
Tuesday 24.01. 14:00 - 16:00 Hörsaal 7
Thursday 26.01. 16:00 - 18:00 Hörsaal 7
Tuesday 31.01. 14:00 - 16:00 Hörsaal 7


Aims, contents and method of the course

Going beyond the fundamentals of incentive setting, this course discusses the wage setting problem, the interplay between effort incentives and ability selection, the (possible) benefits of direct vs. relative incentive setting, and the enhanced incentive structure of labor contracts. Rigorous theoretic modeling is always combined with empirical testing of the respective arguments.
1. Imperfect labor markets and labor market institutions

(a) Is there equal treatment? The stylized facts of the Austrian labor market
(b) Wage compression
(c) Shortening the hours of work

Literature: Garibaldi, Pietro: Personnel Economics in Imperfect Labor Markets, New York, N.Y.:Oxford University Press, 2006, Chapters 1, 2, 3.

2. Salary vs. incentive pay

(a) The two basic functions of incentive pay: effort incentives and ability selection
(b) Effort incentives: a simple model
(c) Ability selection: a simple model
(d) Piece-rates vs. bonus
(e) Paying for input supply or output success

Literature: Lazear, Edward P.: Personnel Economics for Managers, New York, etc.:
John Wiley, 1998, Chapters 3 - 5, p. 45 - 131.; Garibaldo, Pietro, op. cit., Chapters 6 and 7.

3. Relative performance measurement and tournaments
(a) Why relative performance measurement?
(b) Direct incentive pay vs. promotion ladder with risk-neutral agent
(c) A note on the effect of risk aversion
(d) Dynamic incentives
Lazear, Edward P., op. cit., Chapter 9, p. 223 - 258; Garibaldi, Pietro, op. cit., Chapter 8.

4. Is cash all that counts? Alternative means of pay
(a) Lifetime employment contracts and pension incentives
(b) Team incentives and management compensation
(c) Fringe benefits

Lazear, Edward P.: Personnel Economics for Managers, New York, etc.: John Wiley, 1998, Chapters 8, 16, and 17.

Assessment and permitted materials

Classroom participation is immanently relevant for examination ("dieser Kurs ist eine Lehrveranstaltung mit immanentem Prüfungscharakter"). Every topic will be additionally covered by asking students´ to work on take-home problems. These will be available via the net and are relevant for the exams in addition to the material provided as lectures. Exams will be open-book. To pass the course, students must collect at least half of the total points of the combined two exams, the midterm and the final exam.
Make-up exams are only available for students on sick leave (documented by immediately handing in a doctor s sickness note at the chair s office) or leaves supported by formal decision of the university, the faculty, and/or the institute. A passing grade may not be granted if the student misses more than 10% of the total class time.

Minimum requirements and assessment criteria

Examination topics

Reading list

It is necessary that students prepare the selected chapters from textbooks listed in the course outline above. More references may be added as the course proceeds.

Association in the course directory

Last modified: Mo 07.09.2020 15:29