Week 10 Flashcards
(9 cards)
Matching
Heterogeneous individuals are dynamically alligned with heterogeneous organisations and the many situation within them.
Can be described by match quality (P-O fit)
Creation of matches
Firms use recruitment and hiring to attract future employees with the best potential or anticipated P-O fit.
Rectruiting
Attracting a good enough pool of candidates among which you select a few of them
Hiring
Selection of the actual people who are going to be hired
Signaling
Ability to convey information which is credible only by using signals that are costly or otherwise difficult to fake
Steps of RECRUITMENT
- Bring a job opening to the attention of potential job candidates
- Influence whether these individuals apply for the opening
- Affect whether they maintain interest in the position until a job offer is extended
- Influence whether a job offer is accepted
The shape of your network can be crucial for your probability of success in finding a job
Behavioural assumptions
Bounded rationality : imperfect knowledge of alternatives + imperfect processing of information
Opportunism : both job seekers and firms have an interest in providing information strategically
When will a separating equilibrium occur (signaling)
- When sufficiently strong correlation btw ability and
the cost of education determines the spread btw the
cost functions - Predictive validity of education
- education serves as a function of ability - Pay level setting
- W* too low = reduced incentives for high-ability
employees to invest in education
- W* too high = increased incentives for
low-ability employees to invest in education
CORRELATION COEFFICIENT
We calculate r
If r = 1 : perfect positive correlation
If r = -1 perfect negative correlation
In both cases the observations are on a positive (r = 1) or negative (r=-1) sloped straight line
If r = 0 there is no correlation and the observations can’t be meaningfully fitted by a line
