Do we have an alternative to personnel economics? Yes, we have one: socio-economics.

This is what economists (in this case Edward Lazear) claim:

“Economists have something new to say about these issues, however, primarily because economics provides a rigorous, and in many cases more straightforward, way to think about these human resources questions than do the more sociological and psychological approaches.” (Lazear, Edward. “personnel economics.” The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 16 December 2015 <http://www.dictionaryofeconomics.com/article?id=pde2008_P000327> doi:10.1057/9780230226203.1275

My paper argues that personnel economics is still based on wrong assumptions (yes, I know, that some theorists might say, that this is not a problem. The so-called “as-if” approach is seems to be still alive in economics, probably the only scientific discipline where this thinking is viewed as acceptable), and I try to offer an alternative to personnel economics, that is: socio-economics.

“This paper argues that personnel economics is still dominated by the assumptions of orthodox microeconomics, and also that newer fields such as transaction cost theory are far removed from socio-economics. Personnel economics is characterised by assumptions of unbounded rationality, stable preferences and functioning markets; power differences are seen as unimportant for explanations. By contrast, a socio-economic perspective works with the assumption of bounded rationality; it takes preferences into account, assumes that markets are characterised by ‘non-equilibrium’ states and power differences. The paper outlines a socio-economic mode of explanation and suggests that any explanation should include assumptions about three theoretical mechanisms: pursuit of utility, power and sense-making.” Source: Nienhueser, Werner (2014): Socio-economic Research in Personnel versus Personnel Economics. In: Forum for Social Economics DOI: 10.1080/07360932.2014.961498.

If you’re interested in my paper, you may read it for free at: tandfonline (37 of 50 copies still left today…).