A labor market is a place where willing workers offer skills to employers and in return, they are given compensation in form of salaries or wages. The labor market can be either classified as an internal labor market or an external labor market. Both markets have distinct features as shown below; Show Internal Labor Market External Labor Market Company hires workers at entry level and higher levels are filled from within by way of transfer of experienced workers within departments or promotion. Company searches for qualified workers from outside the organization rather than hire from within to fill senior levels. Labor wages are governed by a set of administrative rules. Wages are determined internally rather than be influence by market pressures. Wages are determined by forces of demand and supply and thus they are influenced by market pressures. Mostly workers prefer to work with the highest bidder. It provides some form of incentive to employees to be committed ,continuously motivated to acquire new skills and productive so as to ensure they rise up the ladder Provides no form of incentive because employers find it hard to hire employees who already are in the organization. What trend do you think in the domestic and international labor market presents the greater challenge to HR professionals? The global value chain is the next trend where production process will be decentralized across different countries. This globalization will cause companies to restructure their operations through outsourcing and offshoring of activities. This is a challenge to the HR Professional because it will lead to layoffs of many low level workers. This will lead to cheap labor and increased unemployment rates (Piore, 1971). How can stereotypes potentially influence decisions related to HR systems? Stereotypes are bias that influence decisions thus leading to discrimination. Human resource systems should viewed as means of restoring the competitive position of companies however; stereotypes have proved to be a main factor that affects decision related to this system in various capacities (Piore, 1971). In most Asian countries there is a persistent stereotype that females are not equal to men. This is also evident in Latin American countries where there exist negative stereotype about female being lesser to men and misguided perception on gender roles. These stereotypes have clouded most decisions made by HR such as; Women are not given equal privilege to battle out for competitive positions since they are deemed as less qualified (Piore, 1971).. They cannot be leader since in most of their culture its against the norm for women to lead. Women are deemed to be voiceless thus since they cant fight for their rights, its easier to oppress them than the male so decision mostly favor the men. References Piore, M., & Doeringer, P. (1971). Internal labor markets and manpower analysis: Lexington, Mass: Heat. Cite this page APA MLA Harvard Chicago ASA IEEE AMA AuthorListed:
AbstractInternal labor markets are those where workers are hired into entry level jobs and higher levels are filled from within. Wages are determined internally and may be quite free of market pressure. External labor markets imply that workers move somewhat fluidly between firms and wages are determined by some aggregate process where firms do not have significant discretion over wage setting. There are a number of theories that lead to internal labor markets. Using data from Sweden from the late 1980s, it is found that although there is significant evidence of internal promotion being important, a significant external market exists that affects both wage setting and hiring patterns. Even in Sweden, which most would not choose as the best example of a free labor market, external factors seem to create strong discipline on the ability of firms to set wages. Suggested Citation Handle: RePEc:nbr:nberwo:10192 References listed on IDEAS
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What are the 2 types of labor markets?The two types of labor markets are internal and external. Internal markets includes jobs and employees within a company. External labor markets are all jobs and workers that are not within a single company.
What is internal labor force quizlet?Internal Labor Force. Organization's workers include its employees and people who have contracts to work at the organization. Internal labor force is drawn from the external labor force. External Labor Market. Individuals actively seeking jobs.
What is the difference between labor supply and labor market?The labor market is the collection of all buyers and sellers of labor services. The labor supply is the number of workers that are willing and able to work at the current wage rate. The labor market is determined by the intersection of the labor demand and labor supply.
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What is the difference between the internal labor force and the external labor market?
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