Public Management

Quantitative Method in HRM Wednesday, April 19, 2023

Hun Myoung Park, Ph.D.

Public Management & Policy Analysis ProgramGraduate School of International Relations

2

Histogram for Variables

3

Summary Statistics

Central tendencyMean (average)Median Mode

DispersionVariance Standard deviation 1st Quantile, 2nd Quantile (Median), 3rd

Quantile

4

Histogram and Box Plot 1

5

Histogram and Box Plot

6

7

8

Public versus Private 1

Park and Perry (2013)Analyze General Social Survey data Public employees in government and for-

profit organizations are alike in many respects

Nonprofit organizations (e.g., welfare, health, education) are growing and have employees whose characteristics are different from government employees.

9

Public versus Private 2

10

Public versus Private 3

11

Public versus Private 4

Exit, Voice, Loyalty, Neglect 1

• Based on Hirscheman (1970) and Farrell (1983)

• Classify employees’ status into four groups and analyze its transition

• Here Markov chain is employed for five statuses (i.e., loyalty, voice, neglect, exit, and lay off) even though some assumptions may be violated.

12

Markov Chain Diagram 1

Loyalty

Lay-off

NeglectVoice

.25 .25

.10.15

.05

.40 .45 .55

1.0

.05

Exit

1.0

.20

.10 .15

.10

.20

Exit, Voice, Loyalty, Neglect 2

• Loyalty is to stick with the firm before reacting to the problem

• Voice is any attempt to change rather than to escape from an objectionable state

• Neglect is to lax, disregardful, and inattentive behavior (e.g., absenteeism, lateness, low commitment)

• Exit is to quit or leave the job (turnover) • Lay-off is kicked out of the organization

14

Exit, Voice, Loyalty, Neglect 3

• Suppose that the average number of employees in loyalty is 100

• 300 in voice, 600 in neglect

• The cost of loyalty is $0 per employee per year, $10K for voice, and $50K for neglect

• Ignore the cost of exit (turnover)

• Then what is the total cost that the organization has to pay?

15

Transition Matrix

Q and R matrices

Fundamental Matrix

• Period during which an employee will stay in non-absorbing state before being absorbed in one of two absorbing states

Calculating the Total Cost

• Cost of voice: $10M = (1.04*100 + 2.13*300 + .47*600) * 10K

• Cost of neglect: $101M = (1.36*100 + 1.26*300 + 2.50*600) * 50K

• Total cost: $111M = $10M + $101M

Absorption Probability Matrix

• Probabilities that an employee in each state will exit or being laid off (absorbing states) eventually.

Impact of New Leadership

• What if a new democratic leadership change the organization?

• How does transition matrix (employees’ status) look like?

• What are the portion of loyalty, voice, and neglect?

• What is the total cost that the organization have to pay?

• Does the new leadership work?

Markov Chain Diagram 2

Loyalty

Lay-off

NeglectVoice

.25 .05

.05.15

.02

.60 .50 .20

1.0

.30

Exit

1.0

.05

.08 .10

.30

.10

.25

Calculating the Total Cost

• Cost of voice: $28M = (2.68*100 + 3.84*300 + 2.28*600) * 10K

• Cost of neglect: $56M = (.47*100 +.44*300 + 1.56*600) * 50K

• Total cost: $84M = $28M + $56M

• Impact of the new leadership: $27M = $111M - $84M

• Voice is costly but productive!