Aspects of Labour Demand and Supply in Addition to Determining Price - Essay Example

?Bank management report Table of Contents Bank management report Table of Contents 2 Introduction 3 Analysis of Occupation 3 Human Capital 4 LabourMigration 5 Personnel Economics 5 Discrimination 6 Technology 8 Suitability of Employment 8 Summary 9 Reflective Document 9 Description of Occupational Choice 9 Skill Sets 10 Approach 11 SMART Objectives 11 References 12 Introduction Human resources form the most vital resources for an organization hence it becomes important for business organizations to have an efficient and motivated workforce that seeks to provide value to the organization. In order to ensure motivation in the workforce it is highly essential that an organization ensures job satisfaction. Ensuring job satisfaction also involves ensuring equilibrium with the career demands of an individual and the job responsibilities which require a job fit to be achieved. This requires a combined effort on the part of the organization as well as the individual employee to ensure a fit with the job responsibilities and work profile with the career goals of an individual. The present study would highlight the aspect of occupational analysis to ensure job fit and organizational excellence. Analysis of Occupation Business organizations need to include aspects of labour demand and supply in addition to determining price and output if they want to maintain sustainability of their businesses in the prevailing competitive business environment. The labour demand curve which highlights the marginal productivity of labour as a constant function of the labour quantity is largely determined by the price of output and changes in technology. The supply of labour is largely based on the premise that humans largely tend to make a trade off between leisure and work. They largely assume that work is not enjoyable and work is not enjoyable. However they also realise that leisure normally requires a cost for the individuals. It is widely assumed that an hour of leisure requires a person to sacrifice an hour of wage (University at Albany, 2008, p.1). Figure 1: Labour Demand and Supply Curve (Source: Cuthbertson & Gripaio, 1993, p.7) The figure above shows a typical labour demand and supply curve in a perfect economic scenario. However the equilibrium between demand and supply can be shifted due to change in the individual’s perception towards work. For example previously women were largely discouraged from working which reduced the total supply of labour however with changing times women have become an integral part of the labour force causing the number of workers to increase thereby causing a shift in the supply curve. Alternative work opportunity including immigration also play a role in the shifting of the equilibrium between labour demand and supply as attractive markets outside home would cause a shift in the supply curve to the left (University at Albany, 2008, p.1-2). Human Capital Human capital or the labour force is largely affected by the aspect of wages. The marginal theory of productivity states that under purely competitive market conditions the wage rate is largely constant and hence a firm has the opportunity to decide on the total number of workers to be hired thus determining the market demand for labour on their own. The element of additional or marginal worker largely helps in determining marginal productivity (Chakravarty, 2009, p.600). Employees also have a propensity to go in for higher studies or look for alternative work options. In both these cases the labour supply reduces and the equilibrium wage price gets increased owning to greater propensity and increased marginal wages of the employees in lieu of their higher education or attractive wages in other organizations. Higher education options among the workers would largely tend to shift the labour demand curve to the rightward direction ensuring a shift in the equilibrium point between labour demand and supply (Hubbard & O’Brien, 2008, p.504). Labour Migration In a market characterised by elements of perfect market competition labour immigration largely results in wage reduction as well as labour supply of the native workers. Immigration is mainly the result of market and wage attractiveness as well as the marginal propensity of employees to demand more wages. This results in an influx of labour to the attractive markets which largely affect the equilibrium between labour demand and supply in an economy (Borjas, 2003, p.1369, 1370). Migration of labour has two impacts firstly; it reduces the labour supply in the economy that he/she was presently working which enhances the wages of the workers in the economy. Secondly, with an increased supply of labour in the new economy where the worker has migrated would witness increased labour supply which largely would affect the wages by changing the equilibrium points between labour demand and supply thus reducing the average wages. Personnel Economics The concept of personnel economics and its role in influencing demand and supply started gaining interest from the early 1980’s when the concept of personnel economics was coined. This term includes the aspect of inventive, fringe benefits as well as career growth options for an employee and its consequent effects on the demand and supply of labour. Principal agent relationships form the basis for employee contracts in business organizations. Conflicts may arise when employees (agents) take up greater interest in leisure activities thus reducing the efficiency. The marginal propensity of workers to have greater leisure time also projects issues in principal agent relationship between the employees and the owners of an organization. In order to counter this owners often provide various monetary as well as other incentives and fringe benefits based on the performance of the employees that tends to ensure motivation among the employees to perform at the workplace. Issues in measuring the output, risk factors and quality based concerns largely help firms to generate salary structures for employees (Smith, 2003, p.99-100). Discrimination Discrimination between individuals on the basis of elements like racial origins and gender basis plays an important role in shaping career paths of individuals. Discrimination between employees tends to reduce the motivation levels of employees as it largely affects the aspect of job satisfaction. The marginal propensity to work also reduces which ultimately helps in reduction of profit margins for an organization. Figure 2: Effect of Discrimination on Labour Demand and Supply (Source: Hubbard & O’Brien-a, 2010) Discrimination largely results when firms pay lower wages to an individual or prevent a worker from hiring due to irrelevant aspects like gender, racial aspects etc. Discriminations also result due to difference in the level of education, experience as preference among the prospective employees. The figure shown above highlights an example in which there are two airline firms in the market namely A and B. The figure in the left shows that when no discrimination is followed in the both the firms men and women at both firms get same wages. However when airlines A starts firing women workers it results in a reduction of labour supply for firm A and increases the labour supply at firm B where no discrimination is followed. As highlighted from the rightmost graph in figure 2, the wages largely increase at firm A whereas it reduces in firm B owning to increased supply of labour (Hubbard & O’Brien-a, 2010). Technology Technology has widespread impacts on the labour demand and supply. Technological changes and improvements result in better efficiency of the workers in an organization which ultimately helps in improvements in the levels of productivity. This helps in changing the demand supply curve as the labour demand curve tends to shift in a rightward direction with time. The effect of technology over wages can largely be analysed by considering the fact that television superstars are generally paid more than sportspersons although both these categories of individuals have similar kind of popularity among the masses. The reasons for this can be traced to the fact that advancement of technology like DVD, movies etc has rendered greater popularity of the television and cinema stars as compared to sportspersons which has resulted in this difference of wages (Hubbard & O’Brien, 2009, p.513). Suitability of Employment Suitability of employment or job fit is an essential aspect that affects both business organizations as well as employees. Ensuring job fit helps in inducing greater motivation among the workers as they largely take up their tasks as responsibilities than routine based activities. A job fit also ensures job satisfaction which helps in generating greater output for the organizations. This helps in benefitting both the employees as well as the organizations as both get mutually benefited from the same. In cases where there is no job fir levels of job satisfaction domes down drastically that leads to disastrous consequences for the firm as well as the employee. Organizations try to include various material as well as non material benefits for employees to ensure job satisfaction and motivation. It is therefore largely important to have a recruitment policy that tends to match the career goals and abilities of an employee with the job responsibilities. Candidates must also try to look out for employment options that legally help in ensuring job fits thus ensuring mutual benefits for the organization as well as the individual employees. Summary The micro economic analysis of demand and supply largely states the importance of job satisfaction to ensure organizational excellence. Under perfectly competitive market conditions firms generally try to alter the demand and supply dynamics for their benefits. Aspects like change in technology, personnel economic elements, migration and discrimination largely tend to affect the demand and supply equilibrium in the economy. Firms largely provide material incentives to workers to increase the marginal propensity to work. However care must be exercised by firms to ensure that there is no undue discrimination based on elements like gender, race etc which affects the business prospects of firms as well as wage levels of employees. Finally there must be a combined and comprehensive effort from the employees as well as employers to ensure job fit so as to ensure better opportunities and competitive advantage for the organization in the long run in the competitive business environment. Reflective Document Description of Occupational Choice The occupational choice to be analysed for the present study is that of a branch manager in a bank. The role of a bank manager assumes large scale responsibilities as the person concerned is largely entrusted with the overall job of improving operations as well as ensuring good business for the organization. The job responsibilities largely include taking leadership approach towards the branch as the manager is liable and responsible for the entire sum of activities of the total team working in a branch. Job responsibilities of the bank manager involve handling the retail banking activities of one or more high street branches. The job responsibilities also include team management, sales, development and maintenance of favourable customer relationships which includes retaining new customers and attracting new customers to the bank. This also includes ensuring achievement of sales targets as well as ensuring greater operational efficiency. The bank manager must also act as a mentor and guide for the entire branch(s) that he/she is heading so as to motivate the employees and ensure a collective team effort. In case of a person handling more than one branch the bank manager should also have time management skills to ensure considerable attention to all the branches. Skill Sets The job responsibilities stated above largely require team management, leadership as well as marketing skills. Educational background is also important as a bank manager is expected to be a graduate from accounting, finance, or business administration. Certification in banking practice is also essential for a person willing to take up the job responsibilities of a bank manager. A person willing to go in for the position of a bank manager must also have relevant work experience in either banking or related sectors in finance like insurance, brokerage etc. Experience in government offices would have added advantage as it would imply that the person would have good knowledge towards the area of meeting and ensuring adherence to compliance norms stated by the central bank or the government. The nature of job responsibilities also requires that the person has efficient communication skills so as to manage customer relationships. The person should be comfortable to working in long hours to ensure greater customer satisfaction. The person concerned must also have good visionary skills that would help in talking leverage of the existing opportunities shows by the market. The person should also have self confidence that would enable him/her to take a firm stand during crisis situation. Finally the person to be designated as bank manager must display true leadership skills and should set examples that would motivate others in the bank to emulate them in their work life. This would ensure motivation among the staff that would lead to advantages for the bank in the business market. Approach The job responsibilities and the skill sets required by a bank manager represent a true correlation with my skills sets and the acumen gained during my stint as a students as well as a professional in the professional life. Considering my previous experiences as a team leader during my college term I can very well correlate the job responsibilities of a bank manager. I also feel that this career profile would provide me greater challenges which would automatically open numerous doors of opportunities for my professional career. Other than this my excellence in communicating skills and the knack of meeting new people would help in generating good business for the bank in terms of drawing new customers as well as maintaining relationships with the existing customers. The workaholic nature would also help me in ensuring considerable time towards each of the branches so as to ensure proper management of the bank both in terms of maintaining compliance as well as increasing the business of the bank. SMART Objectives In order to be a successful bank manager it is essential to formulate a set of goals and objectives that seek to act as guiding template for achievement of my career goals. The successful accomplishment of these goals would help in ensuring a complete job fit with the position of a bank manager. These goals are stated below: Increase awareness about banking industry including trends and practices Refinement of communication skills Increase in knowledge base by taking up at least two certification programs associated with banking Seek an opening with a bank after completion of degrees and certifications The objectives stated above are largely specific as they are very clearly defined in terms of the goals to be accomplished. The quantifiable aspects like seeking two certification programs also make the objectives quantifiable and easily measurable. The present set of my abilities and skill sets also largely render the objectives to be able to be easily achieved in terms of fulfilment in a specific time frame. The knowledge and previous skill sets also entail a situation where the objectives can be easily achieved in the professional career path. This ensures a realistic element to the objectives. The objectives have also been specified with a time frame for expected completion of a goal this element largely renders the aspect of time framed suitability to the framed set of objectives. A successful completion of these objectives with a focused attitude would help in enhancement of my professional as well as learning curve that would entail me to take on the challenges in a professional and successful manner. References Borjas, G.J. (2003). THE LABOR DEMAND CURVE IS DOWNWARD SLOPING: REEXAMINING THE IMPACT OF IMMIGRATION ON THE LABOR MARKET. [Pdf]. Available at: http://www.hks.harvard.edu/fs/gborjas/Papers/QJE2003.pdf [Accessed on May 12, 2011]. Chakravarty, S.R. (2009). Microeconomics. Microeconomics. Cuthbertson, K. & Gripaio, P. (1993). The macroeconomy: a guide for business. Routledge. Hubbard, R.G. & O’Brien, A.P. (2008). Microeconomics. Pearson Education India. Hubbard, R.G. & O’Brien, O.P-a. (2010). Microeconomics. [Ppt]. Available at: www2.fiu.edu/~fdeli/HO3e_micro_ch16.ppt [Accessed on May 13, 2011]. Smith, S.W. (2003). Labour economics. Routledge. University at Albany. (2008). Causes of shifts in labour demand curve. [Pdf]. Available at: http://www.albany.edu/~aj4575/LectureNotes/Lecture34.pdf [Accessed on May 12, 2011]. Read More