Personnel Economics

STR435 Personnel Economics

Spring 2024

  • Topics

    Personnel Economics teaches students about how firms manage their employees. On one hand, in most organisations, a large part of all costs are human resource related. On the other hand, the performance of organisations and firms is the sum of the motivations, decisions, and actions of the employees. 

    Evidence shows that management practices play a significant role in explaining differences in firm performance. Evidence also shows that management practices vary considerably across firms, even within the same industry and country. This suggests that there may be significant scope for improvement in management practices across a wide range of firms, and that such improvements may raise firm performance. This course in Personnel Economics examines a large set of management practices that are crucial for firm performance, such as the extent to which a firm hires and retains high-quality employees, how incentives can be used to affect the performance of workers, and how bonuses can be used to reward effort and raise production.

    The course will focus on conventional economic theories with heavy emphasis on empirical applications.

    The course will study firm policies related to the following topics:

    • Recruitment
    • Motivation and effort
    • Incentive schemes 
    • Performance evaluations
    • Training and human capital investments
    • Executive pay
    • Promotions and career-based incentives
    • Organisational structure, job design, teams
    • Fringe benefits

    The course will give the student an understanding of how personnel policies can be applied at a broad level, and is not overlapping or competing with other courses in HR. It can be taken alone, or as a supplement to other HR courses. 

  • Learning outcome

    Personnel economics applies economic tools to topics from human resource management. It applies insights from a number of economics fields, such as labour-, behavioural-, and experimental economics, combined with a number of non-economic fields, such as psychology, sociology and organisational theory. In personnel economics, thus, theories and research from these fields are framed to study how firms can implement effective personnel policies that are profitable both for the worker and the firm.    

    Upon completion of the course, the student can:


    • Understand relevant methods and insights from empirical research in personnel economics.
    • Discuss theories in personnel economics.
    • Describe how theories can be used to analyse questions related to human resource management, such as recruiting and hiring, investment in training and payment schemes.
    • Discuss personnel policies in the Norwegian labour market.


    • Apply theory to real world cases.
    • Apply insights from empirical research to discuss and give recommendations of personnel policies.
    • Identify the methods used to analyze topics in personnel economics empirically.
    • Read and critically review research papers with a personnel economics approach.

    General competence

    • Recognise and analyse personnel policies, and evaluate their appropriateness depending on the context they are used in.

  • Teaching

    The course consists of lectures, cases, discussions, term papers, and student presentations.

  • Compulsory Activity

    Two group-based term papers on topics in Personnel Economics, max three students per group. All groups must give a presentation of the last term paper toward the end of the course.

  • Assessment

    A four-hour individual digital school exam.

  • Grading Scale


  • Literature

    The main text book:

    Edward P. Lazear og Michael Gibbs (2014): Personnel Economics in Practice, John Wiley & Sons. Students can also use 2nd edition of the book, from 2009.

    This will be supplemented with a list of academic, popular science, and case study articles, announced at the start of the course. 

  • Permitted Support Material


    One bilingual dictionary (Category I)

    All in accordance with Supplementary provisions to the Regulations for Full-time Study Programmes at the Norwegian School of Economics Ch.4 Permitted support material


ECTS Credits
Teaching language

Spring. Will be offered spring 2024.

Course responsible

Professor Sissel Jensen, Department of Economics (main course responsible).

Astrid Oline Ervik, Researcher, Centre for Applied Research.