Managerial Economics

Employee Motivation

Earlier we considered how to motivate divisions within a large organization with appropriate transfer pricing. How about motivation within the divisions? As noted in the introduction to this chapter, in recent decades economists have addressed this matter from a new perspective.

The traditional approach to motivation inside a division or modest-sized business was typically regarded as matters of organizational design and organizational behavior. Once the employee agreed to employment in return for salary or wages and benefits, his services were subject to direction by management within the scope of human resource policies in terms of hours worked and work conditions. Ensuring good performance by employees was basically a matter ...