IDEAS home Printed from https://ideas.repec.org/a/bla/labour/v35y2021i4p485-499.html

The role of personal and relative job performance in promotion decisions

Author

Listed:
  • Juho Jokinen
  • Jaakko Pehkonen

Abstract

This study employs personnel data from a large university to examine how supervisors utilize information on employees' job performance in promotion decisions. The study shows that better‐performing employees are rewarded with promotions as a higher output of peer‐reviewed publications and better quality of research output are associated with a higher probability of being promoted. The study also shows that supervisors compare their subordinates' job performance when deciding on promotions: employees who outperform their colleagues in terms of research output and research quality are more likely to be promoted. Subsequently, the study provides evidence to support the key premise of the tournament theory that promotions depend on relative comparisons of employees' performance.

Suggested Citation

  • Juho Jokinen & Jaakko Pehkonen, 2021. "The role of personal and relative job performance in promotion decisions," LABOUR, CEIS, vol. 35(4), pages 485-499, December.
    • Handle: RePEc:bla:labour:v:35:y:2021:i:4:p:485-499
    DOI: 10.1111/labr.12209
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/labr.12209
    Download Restriction: no
    File URL: https://libkey.io/10.1111/labr.12209?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-864, October.
    2. Blackwell, David W. & Brickley, James A. & Weisback, Michael S., 1994. "Accounting information and internal performance evaluation : Evidence from Texas banks," Journal of Accounting and Economics, Elsevier, vol. 17(3), pages 331-358, May.
    3. Jed DeVaro & Antti Kauhanen, 2016. "An “Opposing Responses” Test of Classic versus Market-Based Promotion Tournaments," Journal of Labor Economics, University of Chicago Press, vol. 34(3), pages 747-779.
    4. Brickley, James A. & Zimmerman, Jerold L., 2001. "Changing incentives in a multitask environment: evidence from a top-tier business school," Journal of Corporate Finance, Elsevier, vol. 7(4), pages 367-396, December.
    5. David N. Laband & Robert D. Tollison, 2003. "Dry Holes in Economic Research," Kyklos, Wiley Blackwell, vol. 56(2), pages 161-173, May.
    6. Melanie E. Ward, 2001. "Gender and Promotion in the Academic Profession," Scottish Journal of Political Economy, Scottish Economic Society, vol. 48(3), pages 283-302, August.
    7. Dahlia K. Remler & Elda Pema, 2009. "Why do Institutions of Higher Education Reward Research While Selling Education?," NBER Working Papers 14974, National Bureau of Economic Research, Inc.
    8. Jed DeVaro, 2006. "Internal promotion competitions in firms," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 521-542, September.
    9. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
    10. Lazear, Edward P, 2000. "The Future of Personnel Economics," Economic Journal, Royal Economic Society, vol. 110(467), pages 611-639, November.
    11. Prendergast, Canice & Topel, Robert, 1993. "Discretion and bias in performance evaluation," European Economic Review, Elsevier, vol. 37(2-3), pages 355-365, April.
    12. Prendergast, Canice & Topel, Robert H, 1996. "Favoritism in Organizations," Journal of Political Economy, University of Chicago Press, vol. 104(5), pages 958-978, October.
    13. George Baker & Robert Gibbons & Kevin J. Murphy, 1994. "Subjective Performance Measures in Optimal Incentive Contracts," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(4), pages 1125-1156.
    14. Moers, Frank, 2005. "Discretion and bias in performance evaluation: the impact of diversity and subjectivity," Accounting, Organizations and Society, Elsevier, vol. 30(1), pages 67-80, January.
    15. Frederiksen, Anders & Lange, Fabian & Kriechel, Ben, 2017. "Subjective performance evaluations and employee careers," Journal of Economic Behavior & Organization, Elsevier, vol. 134(C), pages 408-429.
    16. Baker, George P, 1992. "Incentive Contracts and Performance Measurement," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 598-614, June.
    17. Edward P. Lazear, 1999. "Personnel Economics: Past Lessons and Future Directions," NBER Working Papers 6957, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marc ALIANA & Diego PRIOR, 2023. "Fifty years of research on internal promotions: Where are we going? An interdisciplinary review and bibliometric analysis," Management Research and Practice, Research Centre in Public Administration and Public Services, Bucharest, Romania, vol. 15(4), pages 45-61, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Edward P. Lazear & Paul Oyer, 2012. "Personnel Economics [The Handbook of Organizational Economics]," Introductory Chapters,, Princeton University Press.
    2. Golman, Russell & Bhatia, Sudeep, 2012. "Performance evaluation inflation and compression," Accounting, Organizations and Society, Elsevier, vol. 37(8), pages 534-543.
    3. Lucia Marchegiani & Tommaso Reggiani & Matteo Rizzolli, 2013. "Severity vs. Leniency Bias in Performance Appraisal: Experimental evidence," BEMPS - Bozen Economics & Management Paper Series BEMPS01, Faculty of Economics and Management at the Free University of Bozen.
    4. Bingley, P. & Eriksson, T, 2001. "Pay Spread and Skewness. Employee Effort and Firm Productivity," Papers 01-2, Aarhus School of Business - Department of Economics.
    5. Oyer, Paul & Schaefer, Scott, 2011. "Personnel Economics: Hiring and Incentives," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 20, pages 1769-1823, Elsevier.
    6. Juho Jokinen & Jaakko Pehkonen, 2017. "Promotions and Earnings – Gender or Merit? Evidence from Longitudinal Personnel Data," Journal of Labor Research, Springer, vol. 38(3), pages 306-334, September.
    7. repec:eee:labchp:v:3:y:1999:i:pb:p:2373-2437 is not listed on IDEAS
    8. Frederiksen, Anders & Lange, Fabian & Kriechel, Ben, 2017. "Subjective performance evaluations and employee careers," Journal of Economic Behavior & Organization, Elsevier, vol. 134(C), pages 408-429.
    9. Michael Waldman, 2012. "Theory and Evidence in Internal LaborMarkets [The Handbook of Organizational Economics]," Introductory Chapters,, Princeton University Press.
    10. repec:eee:labchp:v:3:y:1999:i:pb:p:2291-2372 is not listed on IDEAS
    11. Christian Zehnder & Holger Herz & Jean-Philippe Bonardi, 2016. "A Productive Clash of Cultures: Injecting Economics into Leadership Research," CESifo Working Paper Series 6175, CESifo.
    12. Axel Ockenfels & Dirk Sliwka & Peter Werner, 2025. "Multirater Performance Evaluations and Incentives," Journal of Labor Economics, University of Chicago Press, vol. 43(4), pages 985-1004.
    13. Hayato KANAYAMA & Yuji KAWATA & Ritsu KITAGAWA, 2025. "Supervisor Accuracy in Subjective Evaluations and Employee Careers," Discussion papers 25098, Research Institute of Economy, Trade and Industry (RIETI).
    14. Thuy-Van Tran & Sinikka Lepistö & Janne Järvinen, 2021. "The relationship between subjectivity in managerial performance evaluation and the three dimensions of justice perception," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 32(3), pages 369-399, September.
    15. Delfgaauw, Josse & Souverijn, Michiel, 2016. "Biased supervision," Journal of Economic Behavior & Organization, Elsevier, vol. 130(C), pages 107-125.
    16. Iain Cockburn & Rebecca Henderson & Scott Stern, 1999. "Balancing Incentives: The Tension Between Basic and Applied Research," NBER Working Papers 6882, National Bureau of Economic Research, Inc.
    17. Raymond O. S. Zaal, 2011. "Reinforcing Ethical Behavior through Organizational Architecture: A Hypothesized Relationship," Chapters, in: Killian J. McCarthy & Maya Fiolet & Wilfred Dolfsma (ed.), The Nature of the New Firm, chapter 2, Edward Elgar Publishing.
    18. Robert M. Gillenkirch & Heike Kreienbaum, 2017. "What guides subjective performance evaluation: Incentive alignment or norm enforcement?," Review of Managerial Science, Springer, vol. 11(4), pages 933-957, October.
    19. Alberto Bayo-Moriones & Jose E. Galdon-Sanchez & Sara Martinez-de-Morentin, 2017. "Performance Measurement and Incentive Intensity," Journal of Labor Research, Springer, vol. 38(4), pages 496-546, December.
    20. Marchegiani, Lucia & Reggiani, Tommaso & Rizzolli, Matteo, 2016. "Loss averse agents and lenient supervisors in performance appraisal," Journal of Economic Behavior & Organization, Elsevier, vol. 131(PA), pages 183-197.
    21. Xin Jin, 2014. "The Signaling Role of Not Being Promoted: Theory and Evidence," Working Papers 0314, University of South Florida, Department of Economics.
    22. Bengt Holmström, 2017. "Pay for Performance and Beyond," American Economic Review, American Economic Association, vol. 107(7), pages 1753-1777, July.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:labour:v:35:y:2021:i:4:p:485-499. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/csrotit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.