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Using Job Rotation to Extract Employee Information

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  • Anil Arya

Abstract

This article provides an incentive-based explanation for the practice of job rotation. When agents privately learn about the productivity of tasks on which they work, job rotation can be an efficient means of eliciting their information. Each agent freely communicates his information since the switch in tasks guarantees his report will not subsequently be used against him; the report is used primarily in evaluating the new agent who moves into the task. Another benefit is that an agent rotated into a job holds less task-specific information and is thus easier to motivate. Job rotation also comes with a cost--agents must be compensated for the disutility of working on new tasks. We study this trade-off and identify conditions under which job rotation and specialization are each optimal. Copyright 2004, Oxford University Press.

Suggested Citation

  • 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.
    • Handle: RePEc:oup:jleorg:v:20:y:2004:i:2:p:400-414
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    Citations

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    Cited by:

    1. Tantri, Prasanna, 2021. "Identifying ever-greening: Evidence using loan-level data," Journal of Banking & Finance, Elsevier, vol. 122(C).
    2. Korpela, Ville & Lombardi, Michele & Saulle, Riccardo D., 2024. "Designing rotation programs: Limits and possibilities," Games and Economic Behavior, Elsevier, vol. 143(C), pages 77-102.
    3. Wei, Chen, 2020. "Can job rotation eliminate the Ratchet effect: Experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 66-84.
    4. Hakenes, Hendrik & Katolnik, Svetlana, 2017. "On the incentive effects of job rotation," European Economic Review, Elsevier, vol. 98(C), pages 424-441.
    5. Maija Halonen‐Akatwijuka, 2010. "Organizational Design, Technology and the Boundaries of the Firm," Economica, London School of Economics and Political Science, vol. 77(307), pages 544-564, July.
    6. Diego Battiston & Miguel Espinosa & Shuo Liu, 2021. "Talent Poaching and Job Rotation," Working Papers 1237, Barcelona School of Economics.
    7. Nakamura, Eri & Sakai, Hiroki & Shoji, Kenichi, 2018. "Managerial transfers to reduce transaction costs among affiliated firms: Case study of Japanese railway holding companies," Utilities Policy, Elsevier, vol. 53(C), pages 102-110.
    8. 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).
    9. Anil Arya & Brian Mittendorf, 2006. "Project Assignments When Budget Padding Taints Resource Allocation," Management Science, INFORMS, vol. 52(9), pages 1345-1358, September.
    10. 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.
    11. Katolnik, Svetlana & Hakenes, Hendrik, 2014. "On the Incentive Effect of Job Rotation," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100574, Verein für Socialpolitik / German Economic Association.

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