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Determinants of Promotions in an Internal Labour Market

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  • Christian Pfeifer

Abstract

I use personnel records of a large German company to analyse the determinants of promotions from the perspective of tournament theory and efficient allocation of employees. Main findings are that less absenteeism, more overtime, longer contractual working time, higher education, higher entry age, and longer remaining tenure are correlated with a higher promotion probability, but female employees are less likely to get promoted. Surprisingly, the promotion probability is positively correlated only with less absenteeism and more overtime in the last three months before the promotion occurs. Explanations, why short-term performance seems to be more important in the promotion process than long-term performance, might be collusion among contestants, worker heterogeneity, and biased promotion decisions by supervisors.

Suggested Citation

  • Christian Pfeifer, 2010. "Determinants of Promotions in an Internal Labour Market," Schmalenbach Business Review (sbr), LMU Munich School of Management, vol. 62(4), pages 342-358, October.
  • Handle: RePEc:sbr:abstra:v:62:y:2010:i:4:p:342-358
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    References listed on IDEAS

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    Cited by:

    1. Gerlach Knut & Hübler Olaf, 2009. "Employment Adjustments on the Internal and External Labour Market – An Empirical Study with Personnel Records of a German Company," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 229(2-3), pages 198-213, April.
    2. Adrian Chadi & Laszlo Goerke, 2015. "Missing at Work – Sickness-related Absence and Subsequent Job Mobility," IAAEU Discussion Papers 201504, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    3. Pfeifer, Christian, 2008. "An empirical note on wages in an internal labour market," Economics Letters, Elsevier, vol. 99(3), pages 570-573, June.
    4. Bossler, Mario & Grunau, Philipp, 2016. "Asymmetric information in external versus internal promotions," IAB Discussion Paper 201611, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    5. Grund, Christian & Schmitt, Andreas, 2013. "Works Councils, Quits and Dismissals in Germany," IZA Discussion Papers 7361, Institute for the Study of Labor (IZA).
    6. Christian Pfeifer, 2010. "Impact of wages and job levels on worker absenteeism," International Journal of Manpower, Emerald Group Publishing, vol. 31(1), pages 59-72, March.
    7. Pfeifer, Christian & Sohr, Tatjana, 2008. "Analysing the Gender Wage Gap Using Personnel Records of a Large German Company," IZA Discussion Papers 3533, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    Efficient Allocation; Internal Labour markets; Promotions; Tournament Theory.;

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions

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