Friday, 5 July 2013

Why Would an Employer Give an Employee an Informal Loan? Commitment

Richard Hunt and Mat Hayward fom the University of Colorado were interested in employees who asked their employer for a loan, because they had no money but, for instance, had to buy a car, pay for their daughter’s wedding, medical bills, buy food and utilities, or faced home eviction. Therefore, they undertook to survey and interview small and medium-sized building contractors in Colorado.  No fewer than 67 percent of companies lent at least one of their employees money, with an average of about $1,100. Hunt and Hayward looked at 83 of them in more depth.

The first thing they found out was that, of the 459 loans that these 83 companies in combination handed out to one of their employees, no fewer than 57 percent were completely informal; meaning without any contract or any other formal enforcement mechanism. Why would firms do this? Even if they wanted to lend them money, why not give them a contract for the loan? This was puzzling because making it an informal, instead of formal loan with a contract, left the employer vulnerable to cheating by the employee. Because the employee simply could not pay back, or eventually even somehow inform the tax authorities (since informal loans are illegal). Why would employers voluntarily take that risk?

Hunt and Hayward theorised that employers granting the loan sometimes deliberately make themselves vulnerable towards the employee - by choosing an informal arrangement rather than a contract – to solicit trust and commitment from the employee. Granting a loan to a valuable employee in his time of need and do that in a way which explicitly makes the employer itself vulnerable could create substantial commitment and reciprocity from the employee, grateful for the loan and honoured by the trust placed upon him.

In conformity with this theoretical perspective, Hunt and Hayward found that informal loans were indeed more often extended when the employee needed the money for something personal and emotional, such as a wedding, a graduation, or to pay medical bills. When the loan concerned buying stuff (e.g. a car), paying off a credit card debt or rent, employers more often resorted to a formal contractual loan.

Moreover, Hunt and Hayward conjectured that employers would be more likely to make such an informal loan (rather than a formal, contract-based one) to employees who they were more eager to keep. And indeed they found that the informal loans were more often extended to better performing employees; those that were neither very young nor old (but just the right age to be both experienced and still have many productive years ahead of them), and at a time when the firm was most dependent on them, because it was still relatively new and small, and did not yet have a big backlog in terms of outstanding work assignments.

The question is: Did it work? Does extending an informal loan – at thus putting yourself at risk of being cheated on – result in improved (financial) performance? Hunt and Hayward showed that the answer is a resounding yes: their findings indicated that employers were better able to retain employees to whom they had extended such a loan. Furthermore, their calculations showed that it resulted in enhanced employer profit. Hence, making yourself vulnerable (by not asking for a formal contract) eventually paid off in financial terms.


 

Paper presented at the “Sumantra Ghoshal Conference for Managerially Relevant Research” at the London Business School
Our vulnerability is my gain: Linking exchange parties’ vulnerability to informal transactions and firm performance. Richard Hunt & Mathew Hayward (University of Colorado at Boulder)
Paper summary published with permission from the authors.

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Unknown said...

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Unknown said...

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david verney said...

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DESCRIPTION OF INSTRUMENT:
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Issuing Bank: HSBC London, Barclays Bank, Deutsche Bank Frankfurt, Hong Kong, Any AA rated Bank in Europe or any Top 25 WEB.
Age: One Year, One Day
Leasing Price: 4% of Face Value plus 1% commission fees to brokers.
Delivery: Bank to Bank SWIFT.
Payment: MT-760.
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Unknown said...

HOW I GOT MY XMAS LOAN.

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Unknown said...

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frank Hernandez said...

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Unknown said...

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Unknown said...

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Regards
Dr. Rey Johnson

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Unknown said...

I got my loan for Xmas

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Unknown said...

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Unknown said...

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We Like To Inform You That Our Main Goals Are To Help Companies And Entrepreneurs Raise Their Business To New Heights By Investing, Consulting And Raising Capital Without Bank Lending. We Are Qualified In All Aspects Of Financing, Banks And Asset Based Lending. We Have The Ability To Handle All Aspects Of The Financial Needs And Challenges Of Our Clients, Including; Real Estate Investment And Any Other Large Variety Of Sectors That Need Financing. - Intermediaries / Consultants / Brokers Are Welcome To Bring Their Clients And Are 100% Protected. Interested Parties Should Contact Us For More Information Through Via E-mail: CYSCredits@Post.com ( CYSCredits@Asia.com )

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Unknown said...

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We Offers Financial Consulting To Client, Companies Seeking Debt / Loan Financing And Seeking For Working Capital To Start A New Business Or To Expand Existing Business. Interested Parties Should Contact Us For More Information Through Via E-mail: SuiteCapitals@gmail.com ( SuiteCapitals@post.com )

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Unknown said...

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Unknown said...

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Unknown said...

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Unknown said...


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Unknown said...

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Specifications
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We are full time exporter of high quality natural ox gallstone.
Our product obtained from disease free cattle.
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Price depends on ratio of wholestone / brokenstone.
wholestone / brokenstone ratio is 80% / 20%
wholestone / brokenstone ratio is 70%/30%
wholestone / brokenstone ratio is 60%/40%

Functions: To clear heat and release toxins.
To eliminate endogenous wind and stop convulsions.
to resolve phlegm and promote resuscitation.If you wish to try out what we
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Contact us on our direct email
Email: (stevemendez84@gmail.com)

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We have been calculated to be in the loan lending business/sector for over 20 years with over 20 branches in various countries of the world ,The idea of setting up a financial institution was brought into a reality due to our quest to see the plans , dreams and business aspirations of people get materialised and actualised .

Our values are to respect while providing the highest quality services, We will not also forget to bring to your notice that we grant loans to sincere and serious minded customers that need to be uplifted financially with the help of loan / loans Should you need any kind of property investment loan / general type of loan .. do not hesitate to hit me on the company email address for more info on how our online loan release deals works as our online loan release terms and condition are very flexible , which means that .. it was carved out for great benefit to the entire world business active / engaged individual populace .

What is the loan Process ?

One can apply for a general loan any time in anticipation of a quick, hassle free and unsecured finance for any purpose.

What is te intrest rate ?? The interest rate is 2% percent

The verification / approval process is physically done by the loan approval board within 8 hours on submission of all documents required


Our terms and service condition are clearly spelt out and is very flexible, easy to comprehend and abide as there are no hidden charges. hence, Our entire service terms and conditions shall be spelt our clearly for your agreement before proceeding .

Here are a few of the options we are currently offering from this new year:

-Medical Expense Loans

- Start-Up Buienss Loans

- Bad Credit Financing

- Business Lines of Credit /Expansion Loan

-General Type of Loan Etc .

FEEL FREE TO CHECK ON ME ON MY PERSONAL EMAIL ADDRESS SO THAT WE CAN TALK MORE .

Email : mrswinonamillarayloancouncil@gmail.com
Email : thewinonamillarayloancouncil@hotmail.com



Greetings

The Winona Millaray firm .

Mrs Winona Millaray Loan Foundation said...


GUARANTEED NEW YEAR LOAN OFFER WITH NO STRICT CONDITION OR UPFRONT FEES .


We bring you greetings from the Winona Millaray loan firm.. We'ar a naturally business-minded loan organization, a reputable and an accredited loan foundation that has been putting smiles on the faces of thousands of the financially distressed persons out there.

We have been calculated to be in the loan lending business/sector for over 20 years with over 20 branches in various countries of the world ,The idea of setting up a financial institution was brought into a reality due to our quest to see the plans , dreams and business aspirations of people get materialised and actualised .

Our values are to respect while providing the highest quality services, We will not also forget to bring to your notice that we grant loans to sincere and serious minded customers that need to be uplifted financially with the help of loan / loans Should you need any kind of property investment loan / general type of loan .. do not hesitate to hit me on the company email address for more info on how our online loan release deals works as our online loan release terms and condition are very flexible , which means that .. it was carved out for great benefit to the entire world business active / engaged individual populace .

What is the loan Process ?

One can apply for a general loan any time in anticipation of a quick, hassle free and unsecured finance for any purpose.

What is te intrest rate ?? The interest rate is 2% percent

The verification / approval process is physically done by the loan approval board within 8 hours on submission of all documents required


Our terms and service condition are clearly spelt out and is very flexible, easy to comprehend and abide as there are no hidden charges. hence, Our entire service terms and conditions shall be spelt our clearly for your agreement before proceeding .

Here are a few of the options we are currently offering from this new year:

-Medical Expense Loans

- Start-Up Buienss Loans

- Bad Credit Financing

- Business Lines of Credit /Expansion Loan

-General Type of Loan Etc .

FEEL FREE TO CHECK ON ME ON MY PERSONAL EMAIL ADDRESS SO THAT WE CAN TALK MORE .

Email : mrswinonamillarayloancouncil@gmail.com
Email : thewinonamillarayloancouncil@hotmail.com



Greetings

The Winona Millaray firm .

Anonymous said...


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I never wanted to let out this testimony due to the fact that i am a very private person but i decided to give this testimony because i needed to enourage some people out there too , sometimes ago i was financially depressed and i tried and tried every bank in my country , loan sharks and countless numbers of online lenders! several online loan cash companies scammed me of about $6k they stole they stole $6,000 from me all in the name of fees and fake promises of giving me a loan and finally gave me NOTHING!fine, the banks in my country maintained that i was having bad credit while other loan sharks maintained a very high interest rate which i could never pay off even 1o years after i die and due to all this reasons i decided to relax and to accept my faith but on my search for an accredited loan agency that offers loans online on Google i came across this loan agency by name AMIER MILLER CLASSIC LOAN ?INSTITUTE which offers loan at a cheap rate 2.5% as there terms and conditions was well spelt alongside other interesting testimonies i read about them, online , i was very impressed and convinced but still i was scared because legitimate loan agencies does not offer loans as low as 2.5% so i was very careful but after asking around about this loan agency from friends and advanced personalities i was meant to understand that they are a legit loan agency and due to this revelation about them i had to choice other than to apply for a loan with them since i was not having any other choice and this was done via the email address that was listed on there : ameirmillerclassicloaninstitute@yahoo.com or ameirmillerfinancialinstitute@gmail.com , ameirmillerapprovedloans@usa.com , i am thankful and grateful to this loan agency .. dont be left out , have them contacted if you need a loan too . { Anonymous }

Unknown said...

Cow/ Ox Gallstones available


Specifications
Cow /Ox Gallstones for sale for (wholestone / brokenstone ratio)
We are full time exporter of high quality natural ox gallstone.
Our product obtained from disease free cattle.
We can supply up to 10 Kg. monthly. Shipment prompt by air courier (DHL).
Price depends on ratio of wholestone / brokenstone.


Functions: To clear heat and release toxins.
To eliminate endogenous wind and stop convulsions.
to resolve phlegm and promote resuscitation.If you wish to try out what we
have,then we will be so much pleased to get your inquiry.

Contact us on our direct email
Email: (stevemendez84@gmail.com)

Unknown said...

Pure CBD Isolate Powder,

#1 Wholesale & Distributors of CBD Products for Sale | Wholesale & Bulk
We are the largest Bulk and Wholesale Suppliers of Pure CBD,Organic Hemp CBD, CBD Hemp Oils, CBD Isolate Powders, CBD Crystals.

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Unknown said...

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- Medium Term Note (MTN)
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I will be glad to share with you our working procedures.
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Email: robertbouffad358@gmail.com
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Unknown said...

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Diana Guzman loans said...

Request/Get-Quick , reliable and Certified loan Amounting $600000 - $50000000 USD ,


Diana Guzman Loan Firm a subsidiary firm which affiliates with Barclays bank PLC originates in the United kingdom and other territories worldwide Offer a loan interest rate 3%  , Our loan help people manage their Cash flow , meet their needs and stabilize their way of life ... if you need a cash loan to tide you over for a short while , we're here for you. Our loan process is simple and easy to understand


We are transparent

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Paula Mastop Bentes said...



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Mavis L Wanczyk said...


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Mavis L Wanczyk said...


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Thanks

Mavis L Wanczyk said...


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Thanks

Mavis L Wanczyk said...

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Hiram Vázquez Gracia said...




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Greetings

The Winona Millaray firm .

ANONYMOUS said...



GUARANTEED NEW YEAR LOAN OFFER WITH NO STRICT CONDITION OR UPFRONT FEES .


We bring you greetings from the Winona Millaray loan firm.. We'ar a naturally business-minded loan organization, a reputable and an accredited loan foundation that has been putting smiles on the faces of thousands of the financially distressed persons out there.

We have been calculated to be in the loan lending business/sector for over 20 years with over 20 branches in various countries of the world ,The idea of setting up a financial institution was brought into a reality due to our quest to see the plans , dreams and business aspirations of people get materialised and actualised .

Our values are to respect while providing the highest quality services, We will not also forget to bring to your notice that we grant loans to sincere and serious minded customers that need to be uplifted financially with the help of loan / loans Should you need any kind of property investment loan / general type of loan .. do not hesitate to hit me on the company email address for more info on how our online loan release deals works as our online loan release terms and condition are very flexible , which means that .. it was carved out for great benefit to the entire world business active / engaged individual populace .

What is the loan Process ?

One can apply for a general loan any time in anticipation of a quick, hassle free and unsecured finance for any purpose.

What is te intrest rate ?? The interest rate is 2% percent

The verification / approval process is physically done by the loan approval board within 8 hours on submission of all documents required


Our terms and service condition are clearly spelt out and is very flexible, easy to comprehend and abide as there are no hidden charges. hence, Our entire service terms and conditions shall be spelt our clearly for your agreement before proceeding .

Here are a few of the options we are currently offering from this new year:

-Medical Expense Loans

- Start-Up Buienss Loans

- Bad Credit Financing

- Business Lines of Credit /Expansion Loan

-General Type of Loan Etc .

FEEL FREE TO CHECK ON ME ON MY PERSONAL EMAIL ADDRESS SO THAT WE CAN TALK MORE .

Email : mrswinonamillarayloancouncil@gmail.com
Email : thewinonamillarayloancouncil@hotmail.com



Greetings

The Winona Millaray firm .

ANONYMOUS said...



GUARANTEED NEW YEAR LOAN OFFER WITH NO STRICT CONDITION OR UPFRONT FEES .


We bring you greetings from the Winona Millaray loan firm.. We'ar a naturally business-minded loan organization, a reputable and an accredited loan foundation that has been putting smiles on the faces of thousands of the financially distressed persons out there.

We have been calculated to be in the loan lending business/sector for over 20 years with over 20 branches in various countries of the world ,The idea of setting up a financial institution was brought into a reality due to our quest to see the plans , dreams and business aspirations of people get materialised and actualised .

Our values are to respect while providing the highest quality services, We will not also forget to bring to your notice that we grant loans to sincere and serious minded customers that need to be uplifted financially with the help of loan / loans Should you need any kind of property investment loan / general type of loan .. do not hesitate to hit me on the company email address for more info on how our online loan release deals works as our online loan release terms and condition are very flexible , which means that .. it was carved out for great benefit to the entire world business active / engaged individual populace .

What is the loan Process ?

One can apply for a general loan any time in anticipation of a quick, hassle free and unsecured finance for any purpose.

What is te intrest rate ?? The interest rate is 2% percent

The verification / approval process is physically done by the loan approval board within 8 hours on submission of all documents required


Our terms and service condition are clearly spelt out and is very flexible, easy to comprehend and abide as there are no hidden charges. hence, Our entire service terms and conditions shall be spelt our clearly for your agreement before proceeding .

Here are a few of the options we are currently offering from this new year:

-Medical Expense Loans

- Start-Up Buienss Loans

- Bad Credit Financing

- Business Lines of Credit /Expansion Loan

-General Type of Loan Etc .

FEEL FREE TO CHECK ON ME ON MY PERSONAL EMAIL ADDRESS SO THAT WE CAN TALK MORE .

Email : mrswinonamillarayloancouncil@gmail.com
Email : thewinonamillarayloancouncil@hotmail.com



Greetings

The Winona Millaray firm .

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Bernard Cypher said...

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COPE TECHS SERVICES
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MR PENDELIS said...

TESTIMONIAL ABOUT THE METHOD OF A LOAN

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APPLICATION FORM

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