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Promotion Policies of Workers who Observe their Ability

Author

Listed:
  • David Wettstein

    (Department of Economics, Ben Gurion University)

  • Ori Zax

    (Department of Economics, Ashkelon College, Ashkelon, 78211, Israel.)

Abstract

We analyze promotion policy when workers are privately informed regarding their abilities at the outset of their careers. We show that the resulting equilibrium outcomes coincide with the outcomes derived in the standard promotion framework where workers and firms do not possess private information at the start of their relationship (Waldman 1984).

Suggested Citation

  • David Wettstein & Ori Zax, 2018. "Promotion Policies of Workers who Observe their Ability," Economics Bulletin, AccessEcon, vol. 38(4), pages 2509-2514.
    • Handle: RePEc:ebl:ecbull:eb-18-00878
    as

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    References listed on IDEAS

    as
    1. Ori Zax, 2017. "Promotion Policies at Different Firms," Economics Bulletin, AccessEcon, vol. 37(2), pages 1045-1054.
    2. Dan Bernhardt, 1995. "Strategic Promotion and Compensation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 62(2), pages 315-339.
    3. Jed DeVaro & Michael Waldman, 2012. "The Signaling Role of Promotions: Further Theory and Empirical Evidence," Journal of Labor Economics, University of Chicago Press, vol. 30(1), pages 91-147.
    4. repec:zbw:ifwedp:201242 is not listed on IDEAS
    5. Suman Ghosh & Michael Waldman, 2010. "Standard promotion practices versus up‐or‐out contracts," RAND Journal of Economics, RAND Corporation, vol. 41(2), pages 301-325, June.
    6. Michael Waldman, 1984. "Job Assignments, Signalling, and Efficiency," RAND Journal of Economics, The RAND Corporation, vol. 15(2), pages 255-267, Summer.
    7. Ori Zax, 2012. "Promotion Policy and Firm Size," Economics Bulletin, AccessEcon, vol. 32(4), pages 3347-3356.
    8. Jed DeVaro & Suman Ghosh & Cindy Zoghi, 2018. "Job Characteristics and Labor Market Discrimination in Promotions," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 57(3), pages 389-434, July.
    9. Cassidy, Hugh & DeVaro, Jed & Kauhanen, Antti, 2016. "Promotion signaling, gender, and turnover: New theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PA), pages 140-166.
    10. Michael Waldman & Ori Zax, 2016. "An Exploration of the Promotion Signaling Distortion," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 32(1), pages 119-149.
    11. Emre Ekinci & Antti Kauhanen & Michael Waldman, 2019. "Bonuses and Promotion Tournaments: Theory and Evidence," The Economic Journal, Royal Economic Society, vol. 129(622), pages 2342-2389.
    12. Waldman, Michael, 2016. "The dual avenues of labor market signaling," Labour Economics, Elsevier, vol. 41(C), pages 120-134.
    13. Dato, Simon & Grunewald, Andreas & Kräkel, Matthias & Müller, Daniel, 2016. "Asymmetric employer information, promotions, and the wage policy of firms," Games and Economic Behavior, Elsevier, vol. 100(C), pages 273-300.
    14. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(3), pages 355-374.
    15. Arijit Mukherjee & Lu�s Vasconcelos, 2018. "On the Trade-off between Efficiency in Job Assignment and Turnover: The Role of Breakup Fees," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 34(2), pages 230-271.
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    Citations

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    Cited by:

    1. Ori Zax, 2020. "Human capital acquisition as a competitive response to the promotion distortion," Metroeconomica, Wiley Blackwell, vol. 71(3), pages 496-509, July.
    2. Chen Cohen & Ori Zax, 2022. "Human capital acquisition as a signaling device in promotion competition," Metroeconomica, Wiley Blackwell, vol. 73(2), pages 550-566, May.

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    More about this item

    Keywords

    promotions; job ladders;

    JEL classification:

    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics

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