chapter  3
Economics and employment relations
ByPaul Willman
Pages 15

The field of employment relations (ER) touches on a number of different intellectual traditions, but arguably economics is the largest and most imperialistic discipline to influence the field. The set of economists who are interested in institutions, and specifically those who would accept the proposition that there is a difference between employment contracts and other forms of contract, have had most influence. This chapter focuses on arguably the three most influential concepts imported from economics to ER to illustrate the most fruitful elements of dialogue between economics and ER: incomplete contracts, collective action and voice. Economics argues that the design of employment contracts, the organisation of collective action and the establishment of employee voice within organisations all have efficiency properties. The chapter examines the contribution of economic thinking to these core areas of ER, arguing that a core problem with economic models is that they tend to assume employee behaviour is endemically problematic, but employer behaviour operates by assumption.