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Using Optional Job Rotation Programs to Gauge On-the-Job Learning

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  • Anil Arya
  • Brian Mittendorf

Abstract

This paper presents one reason for adopting diverse work assignments, rooted in a desire to match employees' pay with the skills they have cultivated on the job. When on-the-job learning parlays into attractive external opportunities, employees may threaten to seek a different and higher paying job elsewhere. By instituting an optional job rotation program, a firm can offer such an opportunity internally. Since new tasks are difficult for employees to undertake, compensation arrangements can be structured to guarantee that only a truly skilled (versatile) employee wants to take on such a challenge.

Suggested Citation

  • Anil Arya & Brian Mittendorf, 2006. "Using Optional Job Rotation Programs to Gauge On-the-Job Learning," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 162(3), pages 505-515, September.
    • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200609)162:3_505:uojrpt_2.0.tx_2-b
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    References listed on IDEAS

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    1. Metin M. Cosgel & Thomas J. Miceli, 1999. "Job Rotation: Cost, Benefits, and Stylized Facts," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 155(2), pages 301-301, June.
    2. Anil Arya, 2004. "Using Job Rotation to Extract Employee Information," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 20(2), pages 400-414, October.
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    Cited by:

    1. Hakenes, Hendrik & Katolnik, Svetlana, 2017. "On the incentive effects of job rotation," European Economic Review, Elsevier, vol. 98(C), pages 424-441.
    2. Müller, Daniel, 2010. "On Horns and Halos: Confirmation Bias and Job Rotation," Bonn Econ Discussion Papers 05/2010, University of Bonn, Bonn Graduate School of Economics (BGSE).
    3. Jonathan Glover & Eunhee Kim, 2021. "Optimal Team Composition: Diversity to Foster Implicit Team Incentives," Management Science, INFORMS, vol. 67(9), pages 5800-5820, September.

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    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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