Chapter 4 Questions
Many Silicon Valley firms have very high turnover. How do you explain this phenomenon? Are there any explanations based on human capital theory? Can you think of other explanations?
How do you predict that turnover (defined as the probability that an employee will leave the firm over the next year) will vary with the number of years of tenure that the employee already has with the firm? With the number of years of total labor market experience that the worker has? Why?
What are the costs of turnover to a firm? (Hint: think about a specific worker that leaves a firm. What costs must the firm pay, implicitly and explicitly, in order to "replace" that worker? What is the right definition of "replace"?)
If you receive a job offer, should you always tell your employer?
You are the CEO of Ecolab at the time that Jack Ford and his management team quit to work for your major competitor, Diversey. Is this a threat? How can you tell? How would you react? Once the threat is passed, what might you do to avoid such events in the future?