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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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    Citations

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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. Dominique Meurs & Elena Vilar & Claudio Lucifora, 2019. "Having a child? Here is the bill - Parenthood, Earnings and Careers in an Internal Labor," Working Papers hal-04141921, HAL.
    3. Mario Bossler & Philipp Grunau, 2020. "Asymmetric information in external versus internal promotions," Empirical Economics, Springer, vol. 59(6), pages 2977-2998, December.
    4. Chadi, Adrian & Goerke, Laszlo, 2015. "Missing at Work - Sickness-related Absence and Subsequent Job Mobility," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112862, Verein für Socialpolitik / German Economic Association.
    5. Christian Pfeifer, 2010. "Impact of wages and job levels on worker absenteeism," International Journal of Manpower, Emerald Group Publishing Limited, vol. 31(1), pages 59-72, March.
    6. Pfeifer, Christian & Sohr, Tatjana, 2008. "Analysing the Gender Wage Gap Using Personnel Records of a Large German Company," IZA Discussion Papers 3533, Institute of Labor Economics (IZA).
    7. Grund, Christian & Schmitt, Andreas, 2013. "Works Councils, Quits and Dismissals in Germany," IZA Discussion Papers 7361, Institute of Labor Economics (IZA).
    8. Chadi, Adrian & Goerke, Laszlo, 2018. "Missing at work – Sickness-related absence and subsequent career events," Journal of Economic Behavior & Organization, Elsevier, vol. 153(C), pages 153-176.
    9. Pfeifer, Christian, 2008. "An empirical note on wages in an internal labour market," Economics Letters, Elsevier, vol. 99(3), pages 570-573, June.

    More about this item

    Keywords

    Efficient Allocation; Internal Labour markets; Promotions; Tournament Theory.;
    All these keywords.

    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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