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Another disappointment for Owen Glenn?

  • July 31st, 2008

I’ve never met Owen Glenn, but I’ve felt strong sympathy for him ever since that infamous day when the PM repayed his generosity to Labour by shunning him at the launch of his Auckland University business school endowment.

I’d have been tempted then to decide that New Zealanders were simply too ungracious to be worth helping.

And I’d be revisiting the thing again today. If I’d just endowed a university level business school and one of its professors published the kind of impressionistic tripe essayed by Nigel Haworth in today’s Herald, I’d want my name dissociated from the school.

Haworth attacks the National policy for a 90 day probation period for new employees. In effect it exempts the first three months of employment from the law that stops employers and employees from agreeing to to a trial. The law obliges employers to prove dismissal cause before saying "this is not going to work".

Haworth sets out a string of non sequiturs seemingly untroubled by the normal academic need for a research base. It is essentially the case heard from unions who need not care (and do not care) about the unpromising would-be employee. The union acts for those who have jobs. No one acts for the kid who desperately needs an employer to take a risk on him or her.

Try this for academic rigour:

"Of course, employers cannot arbitrarily dismiss someone. A process is required that respects both parties’ interests. This is simply a matter of balance and fairness."

Here’s his only mention (and dismissal) of the near universal concern expressed by business people about unfair ‘unfair dismissal’ law:

"If you ask a business how it feels about compliance requirements, it is unlikely to respond positively. What is not clear is the objective and comparative impact of, for example, annual employment compliance costs of around $400 per full-time employee in firms with up to 19 staff (a maximum of 0.23 per cent of turnover)."

An academic worthy of a business school’s brand would have at least acknowledged that compliance cost estimates do not measure the cost of not hiring people for fear of becoming entangled in lawsuits you can not win (because of the cost). Nor do they take into account the  losses from people simply deciding they can not afford the risks of expanding or being an employer at all. 

Prof Haworth deals with correlations between low economic growth rates, high youth unemployment and labour law rigidity like this:

"First, there is no obvious correlation between such flexibility and improved economic performance. If there were, the years of the ECA would, presumably, have been bonanza years for the economy. "

He says he has three answers, but the other two are simply re-runs of his statements against the argument that most of the countries we compare ourselves with already have probationary periods.

Owen Glenn might not be the only one feeling uneasy about the Business School. The other Auckland business school professors have had their brands devalued.




The following paper by Glenn Boyle may be relevant.

Pay Peanuts and Get Monkeys? Evidence from Academia

Glenn Boyle
Victoria University of Wellington – New Zealand Institute for the Study of Competition and Regulation Inc. (ISCR)

October 8, 2006

Does the payment of peanuts tend to result in the hiring of monkeys? Unfortunately, privacy and other constraints on data mean that surprisingly little is known about this issue. In this paper, I use some unique data from the New Zealand academic system to provide direct evidence that pay levels do matter in determining the available pool of quality workers. Academic salaries are independent of discipline in New Zealand universities, but because different disciplines face different outside labour market opportunities, their ability to recruit high-quality academics is also likely to vary. Utilising the results from a national research assessment exercise first undertaken in 2003, I find that discipline research performance is indeed negatively related to the value of outside opportunities: the greater a discipline’s average salary in United States universities, the weaker its research performance in New Zealand universities. The latter apparently get what they pay for: disciplines in which the fixed compensation is high relative to opportunity cost are best able to recruit high-quality researchers and/or motivate their researchers to be productive. Paying (relative) peanuts attracts mainly monkeys.

Keywords: Remuneration, incentives, research performance

JEL Classifications: I28, J33, J44, M52, G00


[…] Original […]

  • Chuck
  • July 31st, 2008
  • 5:06 pm

It is essentially the case heard from unions who need not care (and do not care) about the unpromising would-be employee.

Professor Haworth is currently on the board of the Association of University Staff as the immediate past president.

  • Tauhei Notts
  • August 1st, 2008
  • 6:35 pm

Thank you for your summary of Haworth’s ramblings. I too found Haworth’s comments rather silly. I will wager big money that Haworth’s name has never ever appeared as an employer on an Employers’ Monthly Schedule.


We Nigels have done pretty well so far, especially Lawson, Mansell and Kennedy. But this guy is really hurting us. Auckland University should use that article in first year Philosophy papers as an example of how not to construct an argument.

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