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2023/2024  BA-BHAAV2313U  Applied Personnel Economics: Incentives and Information in the Firm

English Title
Applied Personnel Economics: Incentives and Information in the Firm

Course information

Language English
Course ECTS 7.5 ECTS
Type Elective
Level Bachelor
Duration One Semester
Start time of the course Autumn
Timetable Course schedule will be posted at calendar.cbs.dk
Max. participants 60
Study board
Study Board for BSc in Economics and Business Administration
Course coordinator
  • Herdis Steingrimsdottir - Department of Economics (ECON)
  • Moira Daly - Department of Economics (ECON)
Main academic disciplines
  • Human resource management
  • Management
  • Economics
Teaching methods
  • Face-to-face teaching
Last updated on 08-02-2023

Relevant links

Learning objectives
  • Use economic theory and state of the art evidence-based research to analyze practical issues related to human resource management, such as incentive and compensation systems, task assignment, executive pay, turnover patterns, and on-the-job training.
  • Understand how managers can ensure diversity in the workplace and at the same time maximize worker, team and firm productivity
  • Be able to evaluate various protocols, and know what data needs to be collected and analyzed (e.g. to measure worker performance or efficiency of task allocation)
  • Gain deeper knowledge of human resource management, and place it in a broader context, e.g understand how labor market policies impact human resource management at the firm, and understand the role of unions and collective bargaining for the workplace
Course prerequisites
The course is offered to bachelor students in the 5th semester as an elective regardless of study line. It is required that the students have taken a course in Microeconomics.
Applied Personnel Economics: Incentives and Information in the Firm:
Exam ECTS 7,5
Examination form Written sit-in exam on CBS' computers
Individual or group exam Individual exam
Assignment type Written assignment
Duration 4 hours
Grading scale 7-point grading scale
Examiner(s) One internal examiner
Exam period Winter
Aids Limited aids, see the list below:
The student is allowed to bring
  • Any calculator
  • Language dictionaries in paper format
The student will have access to
  • basic IT application package
Make-up exam/re-exam
Same examination form as the ordinary exam
The number of registered candidates for the make-up examination/re-take examination may warrant that it most appropriately be held as an oral examination. The programme office will inform the students if the make-up examination/re-take examination instead is held as an oral examination including a second examiner or external examiner.
Course content, structure and pedagogical approach

This course will teach students how firms manage one of their most valuable resources, namely their employees. It will cover practical topics such as hiring and firing, how to retain high quality employees, and how different compensation schemes can be used to reward effort and increase productivity. The course will also focus on diversity at the workplace, and how different strategies may be appropriate for different employees and different firms.


The course will cover the following topics:

  • Hiring (How to invest in employees, how many to hire, how to make decision with imperfect information) and recruitment (How to screen job applicants, signaling theory)
  • How/when to invest in skills (on-the-job training)
  • How to manage turnover? (retention strategies, layoffs, buyouts)
  • Decision making at the firm
  • The role of the firm structure
  • Performance evaluation, how and when to reward performance, promotions and incentives, options and executive pay
  • Diversity in the workplace
  • Unions and collective bargaining
  • The role of labor market policies
Description of the teaching methods
The course will combine lectures, cases, and exercises.
Feedback during the teaching period
Feedback will be given throughout the course in exercise classes and in office hours.
Student workload
Lectures and exercises 166 hours
Exam 40 hours
Expected literature

Personnel Economics in Practice by E. Lazear and M. Gibbs

Last updated on 08-02-2023