Peter Cappelli

An Interplant Test of the Efficiency Wage Hypothesis

The analysis that follows tests the shirking model of efficiency wages by examining the relationship between rates of employee discipline and relative wage premiums across plants within the same firm. The structure of this data set controls for many of the problems that confound other tests of efficiency wage arguments, and the results suggest that greater wage premiums are associated with lower levels of shirking as measured by disciplinary dismissals. Shirking and discipline are also lower where conditions in the labor market raise the costs associated with shirking by making it more difficult to find alternative employment. It is less clear, however, whether the wage in this case is necessarily efficient in the sense of generating reductions in discipline sufficient to offset the costs of the wage premium.

Employee Involvement and Organizational Citizenship: Implications for Labor Law Reform and 'Lean Production'

Using data from surveys of employees and their supervisors in eight companies in 1992, the authors examine how each of two forms of employee involvement affected an important dimension of individual performance, organizational citizenship behavior (OCB), defined as individual discretionary behavior that promotes the organization and is not explicitly rewarded. Involvement in work organization increased OCB both indirectly, by changing the job characteristics of individual tasks, and directly, independent of such changes. In contrast, involvement in decisions governing employment practices had only small indirect effects on OCB and no direct effect. These results inform the contemporary debate in labor law concerning the appropriate scope for employee involvement plans as well as the debate about the mechanism through which new production systems affect employee performance.

Are Skill Requirements Rising? Evidence from Production and Clerical Jobs

This paper examines changes in skill requirements for production jobs in 93 manufacturing establishments between 1978 and 1986 and clerical jobs in 211 firms between 1978 and 1988. The unique data set allows an analysis not only of changes in the distribution of employment across jobs—the usual approach—but also of changes in skill requirements within job titles. The results suggest that significant upskilling is occurring within most production jobs in manufacturing; shifts in the composition of the work force toward higher-skill production jobs contribute a smaller amount to the overall rise in average skill requirements. Changes in clerical jobs are more complicated and suggest an even split between jobs that were upskilled and those that were deskilled. The development of new office equipment appears to be associated with the deskilling of specific clerical jobs.

Examining Managerial Displacement

The research reported used a longitudinal analysis to compare the displacement experience of managers with that of other employees and to examine the factors associated with managerial job loss. Jo...

Plant-level concession bargaining

The author investigates the reasons for the diversity in concession bargaining experience among plants in the meatpacking and tire industries. In 1981 negotiations, about one-third of the plants in each industry engaged in concession bargaining and the others did not. The author hypothesizes that this pattern resulted from interplant differences in the likelihood of layoffs or shutdowns, measured by factors such as plant age and size, relative wage level, and nature of product. Regression analysis of the data from union and employer sources supports the authors hypothesis.

Labor Market Intermediaries and the New Paradigm for Human Resources

Labor market intermediaries (LMIs) are entities that stand between the individual worker and the organization that needs work done. They include well-known operations such as executive search firms...

Is the "Skills Gap" Really About Attitudes?

Contrary to popular opinion, the vast majority of complaints about the poor quality of school graduates who enter the workforce are not about a lack of academic skills but instead focus on deficiencies of appropriate work attitudes and behaviors. In fact, attitudes and behaviors have a significant impact on workforce quality and can be developed both in schools and on the job.

Skill Gaps, Skill Shortages, and Skill Mismatches

Concerns over the supply of skills in the U.S. labor force, especially education-related skills, have exploded in recent years with a series of reports not only from employer-associated organizations but also from independent and even government sources making similar claims. These complaints about skills are driving much of the debate around labor force and education policy, yet they have not been examined carefully. In this article, the author assesses the range of these charges as well as other evidence about skills in the labor force. Very little evidence is consistent with the complaints about a skills shortage, and a wide range of evidence suggests the complaints are not warranted. Indeed, a reasonable conclusion is that overeducation remains the persistent and even growing condition of the U.S. labor force with respect to skills. The author considers three possible explanations for the employer complaints and the associated policy implications.

WHY SOME JOBS COMMAND WAGE PREMIUMS: A TEST OF CAREER TOURNAMENT AND INTERNAL LABOR MARKET HYPOTHESES

The wage premiums associated with jobs in a large organization were identified through comparing their pay to the prevailing wages in the relevant outside labor markets. We then examined the characteristics of those jobs to investigate why some commanded larger premiums than others. Jobs at the tops of promotion ladders, jobs requiring many organization-specific skills, and to a lesser extent, jobs with access to influence commanded greater wage premiums. Wages above market rates appear important in supporting the internal labor market mechanisms associated with these jobs. Findings may clarify the factors compensation managers should consider when positioning wage rates. Examination of these issues is a potentially important bridge between the study of internal labor markets in organizational research and the study of wages in economics.

Assessing the Decline of Internal Labor Markets

The circumstances that helped create formal arrangements for managing employees in large firms, often referred to as internal labor markets, are changing. Internalized employment arrangements that buffer jobs from market pressures are giving way to arrangements that rely much more heavily on outside market forces to manage employees. This argument goes beyond previous assertions that jobs are being transformed away from permanent employees in the United States (Pfeffer and Baron 1988; Abraham 1990) in that it suggests a breakdown across many aspects of internal labor markets, even for permanent employees. Nor do these more market-mediated arrangements correspond to the “core-periphery” model, which is thought to enhance protection from the market for at least some employees. What they might entail for employees, employers, and society is considered here along with evidence of the change.