"Learning by Asking Those Who Are Doing": Personnel and the Owner-Employee

Date of Award

2009

Document Type

Thesis

Degree Name

Bachelors

Department

Social Sciences

First Advisor

Elliot, Catherine

Keywords

Personnel Economics, Owner-Employer, Principal-Agent Problem

Area of Concentration

Economics

Abstract

This thesis attempts to solve the problem of motivating workers to provide optimal levels of effort in order to produce set revenue in the context of a small business operated by an Owner-Employee. I do this by investigating two standard economic models of compensation, Lazear's Piece-Rate Compensation Model and Dixit's Optimal Contracting Model using real data provided by the store owner. The results are compared and analyzed to provide implications and insights into the owner's own Play Plus Scheme. The project concludes with the clarification of the underlying problems of such an analysis and provides motivation for further work in personnel economics that might produce useful insights into the behavior of an Owner-Employee.

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