Internal labor markets (ILM) are an administrative unit within a firm in which pricing and allocation of labor is governed by a set of administrative rules and procedures. The remainder of jobs within the ILM is filled by the promotion or transfer of workers who have already gained entry. Internal labor markets are shielded from the competition of external labor markets (ELM).[1] However, competition of ILM exists within the firm in the form of job promotions and pay.[2]
The main reasons why internal labor markets were developed are as follows:[1]
- ^ a b Doeringer, Peter B. & Piore Michael J. (1971). Internal Labor Markets and Manpower Analysis. Massachusetts. D.C. Heath and Company
- ^ Pinfield, Lawrence, (1995). The Operation of Internal Labor Markets. New York. Plenum Press.
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