Chapter Learning Objectives

  • Understand the basic principles that guide the optimal assignment of workers (who differ in their abilities) to tasks or jobs (that differ in their skill requirements).
  • Recognize the distinction between comparative and absolute advantage, and as a result be able to explain why it may not be optimal to assign a worker to a given task even if she is a thousand times more productive than the worker who is currently employed there.
  • Explain the principal differences between traditional mass-production methods and modern or lean production systems.
  • Understand with the importance of exploiting systemwide complementarities.
  • Recognize the key distinguishing features of high performance work practices.
  • Understand the basic tenets of insider econometrics.