Costs of compliance with the law in personnel management

Издержки подчинения закону в управлении персоналом

Mortikov, Vitaliy (Мортиков, Виталий) ()
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Mortikov, Vitaliy (Мортиков, Виталий): Lugansk State University named after Volodymyr Dahl

Voprosy upravleniya / Management Issues, 2020, 87-97

Abstract: The theory of the costs of compliance with the law is developed. In their activities, organizations face various labor costs of compliance with the law. In particular, organizations are forced to comply with regulations designed to protect employees from layoffs. Managers monitor the information from the world of work published by regulators, predict changes in their obligations, and plan to adapt to them. The labor costs of compliance with the law are the focus of representatives of institutionalism such as D. North, R. Posner, A. Polinsky, S. Shavell, an expert in the field of employment protection O. Mironenko, etc. However, modern management needs additional research on the costs associated with the implementation of various standards in the field of personnel management. Our goal is to systematize the labor costs of complying with the law, analyze the transformation of certain obligations into costs, and evaluate some of them. We consider the costs of compliance with the law in human resources management as a system. Classification of this system can be carried out on the basis of levels of the subject structure of subjects of management. Formal and informal, legal and extra–legal norms and the costs associated with them are an integral part of this system. One of the labor costs components of compliance with the law is transaction labor costs related to monitoring the fulfillment of various obligations, such as evaluating the performance of employees. The article also analyzes the transformational costs of complying with the law in the labor sphere. We distinguish between manageable and unmanageable labor costs of compliance with the law. The role of cost management of compliance with the law in personnel management is revealed. The cost burden of complying with the law can be significant. One way to solve this problem is to rebalance the burden of obligations and costs between the employer and the employee by making appropriate regulatory changes. The author draws attention to the problem of disobedience to the law and the costs associated with it. Fines and other penalties are compared to the labor costs of compliance with the law. Rational decisions should be made based on this comparison. The value of the assessment of labor costs of compliance with the law is determined. One of the methods for calculating such costs is proposed.

Keywords: personnel management; costs of compliance with the law; cost management of compliance with the law; cost measurement of compliance with the law; cost transformation of compliance with the law; transaction of compliance with the law; extra-legal costs (search for similar items in EconPapers)
Date: 2020
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