Internal Labor Market - Customary Law

Customary Law

Custom at the workplace is an unwritten set of rules based largely upon past practices or precedent. These rules can govern any aspect of the work relationship from discipline to compensation. Work customs appear to be the outgrowth of employment stability within the internal labor markets. Customary law is of special interest in the analysis of internal labor markets both because of the stabilizing influence which it imparts to the rules of the workplace and because the rules governing the pricing and allocation of labor within the market are particularly subject to the influence of custom.

The internal labor market is composed of many facets. The first is ILMs which consist of clusters of jobs related by the skills and capacities required for their successful performance. Second, the sets of skills required within one job cluster are similar, but different from those required in other job clusters. Third, within any one job cluster, there exists a hierarchy of skills and capacities such that the demands for application of skills on certain jobs facilitate the development of further skills required for other jobs. In this hierarchy those with lower-level jobs requiring skills are usually available in the ELM and higher level jobs require capacities developed from the performance of lower-level jobs usually within the ILM. Fourth, different job levels receive different compensation; high level jobs are associated with higher levels of compensation. Finally, selection and assignment of persons to higher level jobs occurs according to the rules that describe the criteria to be used in these decisions.