Abstract
The purpose of this paper is to review the origins of behavioral economics and its use in employee behavior management and human resource management theory to impact production and output growth in companies by influencing employee behavior. Early research economists, Oliver Williamson and William Ouchi, used classical labor theory and the theory of the firm to analyze employee behavior management within the firm and within industry structure to determine the most effective way of increasing production output and growth. Their early research prompted the area of behavioral economics. Subsequent researchers in academics outside economics, like sociology and business management, used behavioral economic theory as a springboard to delve into the inner workings of employee behavior management. A close review of this research reveals a dichotomy in employee behavior control. The majority of research has been done in circumstances with enhanced employee behavior control as the premier mode of production output and growth, while too little research has been done under systems employing a more hands-off approach of employee behavior management. The recommendation of this review is that more research in employee behavior management should be done in the latter circumstance.
Highlights
From time to time, it behooves researchers to review past intellectual contributions to determine their relevance to current paths of academic research
Behavioral economic theory is the outgrowth of a combination of classical labor theory and collectivism by two seminal researchers, Oliver Williamson and William Ouchi
Beginning in the early 1960s, Oliver Williamson, and later in the 1970s, William Ouchi, using classical labor theory, had a difficult time accounting for changes in dependent variables of worker productivity, or business output growth, using only the hard economic data of wages and weekly hours, and the individual employee as the unit of observation
Summary
It behooves researchers to review past intellectual contributions to determine their relevance to current paths of academic research. Behavioral economic theory is the outgrowth of a combination of classical labor theory and collectivism by two seminal researchers, Oliver Williamson and William Ouchi. These academics were influenced by business management theory as a way of affecting, or compelling, employee productivity in work groups. Beginning in the early 1960s, Oliver Williamson, and later in the 1970s, William Ouchi, using classical labor theory, had a difficult time accounting for changes in dependent variables of worker productivity, or business output growth, using only the hard economic data of wages and weekly hours, and the individual employee as the unit of observation. What would business management and human resource management theory look like if the unit of observation were the individual employee, rather than the group?
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