My experience with organizations
I tend to think I have been a part of several organizations, or at least strongly tied communities, with a well-structured hierarchy. I haven't, however, become a part of an RSO until this year, so my experience with that is limited. From what I have observed, the most frequent, even more so an omnipresent, change organizations undergo is the inflow-outflow of members. With companies in particular, that is constituted by hiring and laying off employees.
This summer, I interned at a company with around a thousand employees. Other than me, there were several dozen full-time summer interns working at different offices around the world. With regards to hiring, thinking in the context of structural change is different from thinking in the context of simply interviewing a potentially qualifying employee: this mid-sized company, for instance, hadn't had interns up until a few years ago, and I would assume there needed to be structural changes made to be able to accommodate interns in the hierarchy.
Interestingly, interns may be thought of as the lowest ranked employees in the company's structure; perhaps appending a lower layer to the company's structure is less change than, say, repositioning the higher nodes (department heads closer to the root of the tree, the CEO) or having one team being merged with another. I do want to note that while the company in general did offer internships, not all teams in the company offered intern positions, and my understanding of that is that the overhead of changing the structure might be seen as too high to be hiring short-term employees.
The company did also offer to relocate some employees between teams, or even offices, if some desired to do so. Notably, there are other employees (HR department) whose job is to accommodate such requests. I wonder if the payroll of people in that department can be considered as a transaction cost of requested structural change.
Another thought from my experience with the job market: hiring process is a huge time investment for both the prospect and the employer. Interviews, in my experience, were memorable, challenging, yet exhausting. When we think of one's time in economics, we commonly bring up opportunity costs. Can opportunity cost of my manager's time when hiring me be considered a transaction cost of hiring new employees? After all, the manager could've spent more time with the team doing actual work. From one-one-ones with my manager, I learned that first few steps of hiring process are thoughtfully designed to filter out the vast majority of applicants without practically any time investment from the manager. I assume this may be seen as a successful attempt to minimize transaction costs.
Overall, it is engaging to think of an organization in terms of its structure and of its structure in terms of change introduced to it by hiring / laying off employees.
This summer, I interned at a company with around a thousand employees. Other than me, there were several dozen full-time summer interns working at different offices around the world. With regards to hiring, thinking in the context of structural change is different from thinking in the context of simply interviewing a potentially qualifying employee: this mid-sized company, for instance, hadn't had interns up until a few years ago, and I would assume there needed to be structural changes made to be able to accommodate interns in the hierarchy.
Interestingly, interns may be thought of as the lowest ranked employees in the company's structure; perhaps appending a lower layer to the company's structure is less change than, say, repositioning the higher nodes (department heads closer to the root of the tree, the CEO) or having one team being merged with another. I do want to note that while the company in general did offer internships, not all teams in the company offered intern positions, and my understanding of that is that the overhead of changing the structure might be seen as too high to be hiring short-term employees.
The company did also offer to relocate some employees between teams, or even offices, if some desired to do so. Notably, there are other employees (HR department) whose job is to accommodate such requests. I wonder if the payroll of people in that department can be considered as a transaction cost of requested structural change.
Another thought from my experience with the job market: hiring process is a huge time investment for both the prospect and the employer. Interviews, in my experience, were memorable, challenging, yet exhausting. When we think of one's time in economics, we commonly bring up opportunity costs. Can opportunity cost of my manager's time when hiring me be considered a transaction cost of hiring new employees? After all, the manager could've spent more time with the team doing actual work. From one-one-ones with my manager, I learned that first few steps of hiring process are thoughtfully designed to filter out the vast majority of applicants without practically any time investment from the manager. I assume this may be seen as a successful attempt to minimize transaction costs.
Overall, it is engaging to think of an organization in terms of its structure and of its structure in terms of change introduced to it by hiring / laying off employees.
You are the first student to mention turnover at companies. I think you were a little unfair in considering separations. Some of these are quits, because a better job is found elsewhere, because a significant other has a job opportunity elsewhere, because a sick parent needs to be attended to, or just because the person is tired of the job and the company ethos. You did mention that the company would relocate employees into other divisions. That might address the last issue sufficiently. But sometimes there isn't a suitable position at the same job. And, depending on the nature of the job, sometimes it is difficult to do a job search while continuing to work in the current position. In that case the separation can be employee initiated to enable job search.
ReplyDeleteThen, one more reason for severance is retirement. There is no longer mandatory retirement at age 65. When there was, an employee's age would determine that type of separation. Now the time of retirement is negotiated between the employee and the employee's supervisor and there may be a severance package granted, as a way to induce the employee to leave in a voluntary way. It is disheartening to have somebody work 30 years or more at a company only to fire the person then and there. And now the company might face getting sued for age discrimination if they go that route.
Let's turn to internships. Sometimes this is just a label put on a summer job - the company is looking for part-time work, nothing more. But most of the time we think of it as an experiment to see if the intern is a good fit with the company and likewise for the intern to see if it is a good place to work. In this case, it would make sense to intern in the same unit that might hire the intern a year later. Not all divisions of the company may be in hiring mode. So they would have no need to supervise interns, which in this case would be an added burden without an offsetting benefit. I'm unclear which it was in your case. I wish you had elaborated on that more.
Regarding hiring taking a lot of time, I think part of that is the nature of the work and also the importance of the position. At the U of I, searches can be internal (the candidates already work on campus), local (within the vicinity) of campus, regional, or national. The type of search determines how the position is announced and marketed. Entry level positions are quite different than higher level positions this way. In some cases, being a student employee is like doing an internship. If the unit knows who it wants to hire ahead of time, it can ask for an exemption for doing a search at all. The EEO office (equal employment opportunity) wants to make sure that the hiring is on the up and up and legitimate candidates have a fair shot at getting the job. But as I already indicated in class, there are ways to learn about candidates well before the formal search ever happens. And in this case having a good opinion of a candidate ahead of time is the consequence of prior work experience. It is not nepotism or bribery. While the latter should not be condoned, the former really is indispensable and the consequence of having a strong people network in place. Maintaining such a network is definitely effortful. But its rewards are not just in job search. It's in getting crucial information when that is needed.