I am very surprised that you see Ronald's explanation in contrast to Nancy's. Income-smoothing is the only example she gives that does not look to me like a transaction cost. I think the economics party line is that the transaction costs will be split between the employee and the firm, with agnosticism about who will get the bulk of the benefit.
This is our monthly thread for collecting these little gems and pearls of wisdom, rationality-related quotes you've seen recently, or had stored in your quotesfile for ages, and which might be handy to link to in one of our discussions.