What politics does to the economic analysis of the employment relationship: a critical perspective on personnel economics

Personnel economics has undoubtedly been one of the major developments in mainstream labour economics in recent decades. Its aim is not simply to report on firms’ actual labour management practices but also to prescribe the optimal practices for managers to adopt. The pursuit of this goal has led it to close itself off from other approaches to the analysis of the employment relationship. Drawing on concepts from political science, we show that personnel economics is imbued with a particular conception of politics, even though it goes unacknowledged. Making this point visible enables us to show that other conceptions of politics than that to which personnel economics refers are possible and leads to the acknowledgement of the legitimacy of other points of view in matters of labour management.