Even economists who take the notion of human capital seriously have begun to note the possibilities of incorporating structural influences in the model. One theoretical analysis shows that wages can grow with experience, even if productivity does not, because giving "overpayment" to senior workers creates incentives for all employees (Lazear 1981), and this predicted lack of association of experience and productivity is supported by empirical work (Medoff and Abraham 1981). In effect, this analysis provides an economic rationale for wage structures which depart from human capital considerations. Another analysis shows that individuals can be compensated in terms of the rank order of their performance, not in terms of the dollar value of their performance (marginal product), and they may receive salaries that are assigned in advance without regard to the dollar value of their productivity (Lazear and Rosen 1981). These analyses are remarkable because they use economic principles to extend economic theory in the direction of structural theory.
Thurow (1975) uses economic and sociological principles to extend the traditional economic analysis much further toward a structural analysis. He argues that labor supply and demand are brought into balance not by the customary model of wage competition, in which wages are adjusted, but by what he calls job competition, in which wages are inflexible but jobs confer training to their new occupants so their human capital changes to match the job demands. Thurow adopts the social structural position that individuals are paid wages according to the jobs they hold, the jobs are assigned wage rates according to normative considerations. Consequently, while economic theory de-scribes a process by which individual characteristics directly affect earnings, Thurow's job competition theory indicates that two separate processes are involved: the process of assigning wage rates to jobs and the process of matching individuals with jobs. Like economic theory, the job competition model provides a dynamic mechanism for matching individuals' attributes and their earnings, but the job competition model recognizes structural processes totally ignored by human capital theory.
While economic theories assume too little rigidity, structural theories may assume too much. Internal labor market theories and vacancy theories indicate that advancements occur along rigidly defined routes. Although this may be true in some circumstances, it is unlikely to be true in many others, and it will not be a good description of career mobility patterns in an entire organization. Rather than promoting employees through narrow career routes into managerial positions, organizations often strongly emphasize breadth of experience as a requirement for promotions, and lateral moves through a diversity of jobs and departments are viewed as providing the required preparation. Moreover, job rotations are also portrayed as a way for employees to show that they can handle new challenges and to keep themselves in contention for advancements. While it seems likely that some jobs are better than others for aiding an individual's promotion chances, the range of advancement routes to a high-level position is likely to be far broader than a single job ladder.
Indeed, ABCO once made an effort to specify its career ladders so that the personnel department could make better manpower planning projections. Obviously, the fact that they undertook this project indicates that some personnel managers believed that career ladders could be easily described; however, they soon found that the reality was more complex than they had anticipated. Great amounts of time and resources were devoted to the project over the course of a year as they tried to map out the antecedent jobs from which each higher-level job recruited. Although some modal patterns were identified for many jobs, the full range of antecedent jobs was difficult to specify for most jobs, and when feeder patterns were combined to make ladders extending over more than two levels, the maps became hopelessly complex. The project was disbanded after a year, a near-total failure except for the knowledge that linkages of specific jobs were very complex.
Granovetter (1981) proposes a more dynamic structural model in which the matching processes which assign individuals to positions will change when the balance between labor supply and demand changes. These matching processes must also explain the ways that employers obtain information about employees ("signals" as described by Spence [1974] and Stiglitz [1975]) and the ways employers keep track of their employees' capabilities over time and decide their subsequent careers. Moreover, Granovetter's earlier findings indicate that the matching process is even more complex than a mere matching of individuals with vacancies. Over half the job placements of individuals in his study were jobs for which no vacancy existed, and in many of these cases, the jobs had not even existed before (Granovetter 1974, p. 14). If jobs are continually being created and destroyed, then the matching process raises complexities which some structural theories have assumed not to exist.
Particularly for describing stratification in organizations, Granovetter's model of matching processes may be a better description than either economic or structural theories, but it is also more complex. It posits that individuals' earnings are explained not only by individual human capital, but also by job attainments. It also posits that structure is not as rigid as structural theories sometimes suggest; the distribution of individuals in organizational hierarchies may be responsive to social and economic changes. Of course, research has rarely investigated how structural rigidities limit the responsiveness of attainments. The conception of matching processes paves the way for a dynamic structural model which incorporates elements of structural and economic theories.
