Search results

Employer-provided benefits are a large and growing share of compensation costs. In this paper, I consider three factors that can affect the value created by employer-sponsored benefits. First, firms have a comparative advantage (e.g., due to scale economies or tax treatment) in purchasing relative to employees. This advantage can vary across firms based on size and other differences in cost structure. Second, employees differ in their valuations of benefits and it is costly for workers to match with firms that offer the benefits they value. Finally, some benefits can reduce the marginal cost to an employee of extra working time. I develop a simple model that integrates these factors. I then generate empirical implications of the model and use data from the National Longitudinal Survey of Youth to test these implications. I examine access to employer-provided meals, child care, dental insurance, and health insurance. I also study how benefits are grouped together and differences between benefits packages at for-profit, not-for-profit, and government employers. The empirical analysis provides evidence consistent with all three factors in the model contributing to firms’ decisions about which benefits to offer.

Purpose: The purpose is to introduce the fundamental economic concepts that must be wrestled with the incorporation of robots, artificial intelligence and service automation (RAISA) into the travel, tourism and hospitality industries.

Design/methodology/approach: This chapter uses cost-benefit analytical framework of the incorporation of RAISA technologies into travel, tourism and hospitality industries.

Findings: The chapter elaborates on the economic fundamentals of RAISA adoption into the travel, tourism and hospitality industries. The analysis reveals that many financial and non-financial costs and benefits need to be considered when taking a decision to use RAISA technologies. Automation of tasks leads to simultaneous substitution and enhancement of human employees. Introduction of RAISA technologies results on inevitable deskilling of some and upskilling of other tourism and hospitality jobs.

Research limitations/implications: The chapter is conceptual and conclusions are limited by the views and interpretations of the authors.

Practical implications: RAISA technologies will become increasingly omnipresent in the travel, tourism and hospitality industries. That is why an understanding of the costs and benefits and many of the practical impediments to the incursion of RAISA into the workplace should be understood to make a transition from human-performed tasks to technology-performed tasks.

Social implications: Replacement of human labour will have significant social implications for the workforce and employers.

Originality/value: This is one of the few publications that discuss the economic aspects of the incorporation of RAISA technologies into travel, tourism and hospitality industries.

After reading this chapter you should be able to:

• Understand what is meant by relocation cost.

• Explain the management and disbursement of relocating costs.

• Critically evaluate the calculation of relocation costs.

• Reflect on the role of human resource managers in relation to the future of the costs of relocation.

Understand what is meant by relocation cost.

Explain the management and disbursement of relocating costs.

Critically evaluate the calculation of relocation costs.

Reflect on the role of human resource managers in relation to the future of the costs of relocation.

The purpose of this paper is to propose a costs framework for harm of human resource management (HRM) practices to develop the cost measures for the psychological, social and work‐related health aspects of harm of HRM practices on stakeholders (employees, their family and communities) so as to understand the implications of harm on the stakeholders.

Initially, the cost components of health care are used to theoretically develop a costs framework for harm of HRM practices to measure cost for each of the psychological and the social aspects of harm of HRM practices. Subsequently, employee relative deprivation, spill over and crossover effects of work on family are the theories used to develop the cost measure for the psychological and the social harm of HRM practices. Finally, the direct costs associated with the psychological and the social harm of HRM practices on stakeholders are valuated using published research.

The proposed costs framework of harm of HRM practices is a useful theoretical framework to identify, measure and valuate the cost of psychological and social harm of HRM practices on the stakeholders.

The costs component framework of harm of HRM practices can facilitate the capture of the associated costs of the harm of HRM practices so as to understand organisations' ethics of care for stakeholders.

The theoretical costs framework for harm of HRM practices provides a new technique to measure the cost of psychological and social harm of certain HRM practices imposed on the stakeholders so as to minimise the harm in the future.

From 2007, New Zealand firms must report the cost of granting employee stock options (ESOs). Market‐based option pricing models assume that option holders are unconstrained in their portfolio choices and thus are indifferent to the specific risk of any firm. By contrast, ESO holders are frequently required to hold portfolios that are over‐exposed to the firm that employs them and so adopt exercise policies that reflect their individual risk preferences. Applying the model of Ingersoll (2006) to hypothetical ESOs, we show that ESO cost can be extremely sensitive to employee characteristics of risk aversion and under‐diversification. This result casts doubt on the usefulness of any market‐based model for pricing ESOs, since such models, by definition, produce option values that are independent of employee characteristics. By limiting employee discretion over the choice of exercise date, vesting restrictions help reduce the magnitude of this problem.

On the basis of labor economics theories, this study examines how adjustment in human capital accounts for labor cost stickiness.

This study makes use of employee education level as a measure of the quality of human capital and relies on data from Chinese public firms to conduct the empirical test. This study focuses on two important components of labor cost changes: one corresponding to the adjustment in the number of employees (capacity adjustment) and another corresponding to the adjustment in the mix of employee education levels (quality adjustment).

This study reveals that labor cost changes driven by the adjustment of employee education level are sticky. This stickiness cannot be explained by the standard adjustment cost theory. This further shows that firms that actively adjust their employee quality during downturns experience improved future performance. The findings are robust to alternative measures and specifications.

This study provides new evidence for and insights into the cost behavior literature. Previous studies treat input resources in a homogenous way and focus on the effect of capacity adjustment. This study considers the heterogeneity of resources and examines three dimensions of salary cost adjustment: capacity, structure, and unit cost. In line with the economic theory of sticky costs proposed by Banker et al. (2013a), the study’s evidence sheds light on the additional underlying economic mechanisms driving cost stickiness behavior. Specifically, managers asymmetrically adjust both employee structure and average salaries, in addition to employee number. This study also adds to the existing knowledge of the consequences of managers' actions regarding cost behavior.

This paper analyzes economic, legal, behavioral and public policy issues pertaining to the accounting for employee stock options. The paper explains why employee stock options (ESOs) are superior to other forms of incentive compensation, why ESOs in their present form are inefficient and why particular accounting, legal and tax treatments will provide the optimal results for the economy, the government, management/employees and shareholders. The issues discussed in this article are relevant in ESO accounting, regulation of ESOs, incentive compensation, human resources analysis, tax policy, corporate governance, fraud, valuation of companies, derivatives regulation, behavioral analysis of law/rules, portfolio management and management strategy.

This paper aims to propose a quadruple bottom line approach for higher education leaders who must decide whether to accept sustainability initiatives that do have not have a business case. The authors describe a personal waste management program at a major university to illustrate how a quadruple bottom line framework may impact decisions to adopt a sustainability practice in higher education. The authors also demonstrate how opportunity costs can be applied to better understand the true costs of such waste management programs.

This exploratory research uses a case study approach with a unique accounting method to determine the costs of a personal waste management system. System costs are calculated for the entire university and for sample units within the university.

University leaders chose to continue the new waste management program in light of evidence showing higher than anticipated costs. The authors illustrate how this decision was driven by consideration of a fourth bottom line, that of the educational value of the sustainability initiative. It is discussed whether proposed sustainability initiatives such as these should be evaluated using a traditional triple bottom line framework, or, in the case of higher education, if equal consideration should also be given to factors related to the educational mission of the institution.

The authors develop a quadruple bottom line framework to explain the frequent implementation of economically costly sustainability programs in higher education contexts. This paper also reviews the rise of “personal waste management” programs at higher education institutions, demonstrates how the value of employee time can and should be considered as a cost of a comprehensive campus sustainability program (i.e. recycling and composting) and illustrates a novel means for using opportunity costs to determine those costs.

Management discretion in the decision to reduce payroll costs is an important but under-researched issue in management accounting. The authors leverage the experimental environment to test the role of organizational culture (close vs. distant) and managerial communion (concern for others) along with their interaction with sales decline persistence (one vs. two periods) on planned layoff decisions. The authors find that communal managers are hesitant to downsize employees and that a close organizational culture interacts with one period sales declines to reduce layoffs although the influence of culture is reduced with persistent sales declines. The authors also examine the influence of culture and communion on managers’ preference for pay cuts as an alternative to layoffs. The authors find that a close culture and higher communion are associated with decisions to choose pay cuts over layoffs; however, these costs interact such that managers low in communion in a distant culture express a higher preference for layoffs. These findings illustrate the combined influence of economic, organizational, and dispositional factors on manager decisions about the extent and form of labor cost reductions due to sales declines.

The purpose of this paper is to document the total return on investment (ROI) of a comprehensive worksite health program from 1999 to 2007 through two different analytic approaches.

Two analytical techniques were used: time period analysis and historical trend analysis of the entire study period. The time‐period analysis of ROI was performed among employees in four time periods: 1999‐2001; 2002‐2003, 2004‐2005; and 2006‐2007. The historical trend analysis on participation‐related savings was used to compare the financial trend differences between participants and non‐participants as well as the three different participation levels of continuous, sporadic, and non‐participants since the year 2000 among 2,753 employees who worked for and were covered by the company‐sponsored health plans for the entire study period.

The ROI from health care costs and time away from work ranged from 1.29 to 2.07 for the four time periods with a cumulative ROI of 1.66 over nine years. The historical trend analysis of 2,753 long‐term employees resulted in a 1.57 ROI for 2,036 program participants (t‐test: p<0.005) with statistically significant annual saving of $180 per participant per year.

The returns on comprehensive worksite health program were greater than the program investment as documented by both time‐period and historical trend analyses. Organizations seeking ways to manage the increases in health care and absenteeism costs of employees will be encouraged to see that positive returns can be generated by investments in employee health and wellness and steady or consistent participation is one key to generating success.