IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2206.15098.html
   My bibliography  Save this paper

Talent Hoarding in Organizations

Author

Listed:
  • Ingrid Haegele

Abstract

Most organizations rely on managers to identify talented workers. However, managers who are evaluated on team performance have an incentive to hoard workers. This study provides the first empirical evidence of talent hoarding using personnel records and survey evidence from a large manufacturing firm. Talent hoarding is reported by three-fourths of managers, is detectable in managerial decisions, and occurs more frequently when hoarding incentives are stronger. Using quasi-random variation in exposure to talent hoarding, I demonstrate that hoarding deters workers from applying to new positions, inhibiting worker career progression and altering the allocation of talent in the firm.

Suggested Citation

  • Ingrid Haegele, 2022. "Talent Hoarding in Organizations," Papers 2206.15098, arXiv.org, revised Mar 2024.
    • Handle: RePEc:arx:papers:2206.15098
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2206.15098
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Anders Frederiksen & Lisa B. Kahn & Fabian Lange, 2020. "Supervisors and Performance Management Systems," Journal of Political Economy, University of Chicago Press, vol. 128(6), pages 2123-2187.
    2. Mitchell Hoffman & Lisa B Kahn & Danielle Li, 2018. "Discretion in Hiring," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 133(2), pages 765-800.
    3. Huitfeldt, Ingrid & Kostøl, Andreas R. & Nimczik, Jan & Weber, Andrea, 2023. "Internal labor markets: A worker flow approach," Journal of Econometrics, Elsevier, vol. 233(2), pages 661-688.
    4. Manudeep Bhuller & Gordon B. Dahl & Katrine V. Løken & Magne Mogstad, 2020. "Incarceration, Recidivism, and Employment," Journal of Political Economy, University of Chicago Press, vol. 128(4), pages 1269-1324.
    5. David Arnold & Will Dobbie & Crystal S Yang, 2018. "Racial Bias in Bail Decisions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 133(4), pages 1885-1932.
    6. Michael Ransom & Ronald L. Oaxaca, 2005. "Intrafirm Mobility and Sex Differences in Pay," ILR Review, Cornell University, ILR School, vol. 58(2), pages 219-237, January.
    7. Nicholas Bloom & John Van Reenen, 2007. "Measuring and Explaining Management Practices Across Firms and Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(4), pages 1351-1408.
    8. Canice Prendergast, 1999. "The Provision of Incentives in Firms," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 7-63, March.
    9. Mitchell Hoffman & Steven Tadelis, 2021. "People Management Skills, Employee Attrition, and Manager Rewards: An Empirical Analysis," Journal of Political Economy, University of Chicago Press, vol. 129(1), pages 243-285.
    10. Astrid Kunze & Amalia R. Miller, 2017. "Women Helping Women? Evidence from Private Sector Data on Workplace Hierarchies," The Review of Economics and Statistics, MIT Press, vol. 99(5), pages 769-775, December.
    11. Morten Bennedsen & Francisco Pérez‐González & Daniel Wolfenzon, 2020. "Do CEOs Matter? Evidence from Hospitalization Events," Journal of Finance, American Finance Association, vol. 75(4), pages 1877-1911, August.
    12. HOLMSTROM, Bengt, 1979. "Moral hazard and observability," LIDAM Reprints CORE 379, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    13. Marianne Bertrand & Antoinette Schoar, 2003. "Managing with Style: The Effect of Managers on Firm Policies," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(4), pages 1169-1208.
    14. Lisa B. Kahn & Fabian Lange, 2014. "Employer Learning, Productivity, and the Earnings Distribution: Evidence from Performance Measures," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(4), pages 1575-1613.
    15. Sherwin Rosen, 1982. "Authority, Control, and the Distribution of Earnings," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 311-323, Autumn.
    16. Michael Waldman, 1984. "Job Assignments, Signalling, and Efficiency," RAND Journal of Economics, The RAND Corporation, vol. 15(2), pages 255-267, Summer.
    17. Edward P. Lazear & Kathryn L. Shaw & Christopher T. Stanton, 2015. "The Value of Bosses," Journal of Labor Economics, University of Chicago Press, vol. 33(4), pages 823-861.
    18. George Baker & Michael Gibbs & Bengt Holmstrom, 1994. "The Internal Economics of the Firm: Evidence from Personnel Data," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(4), pages 881-919.
    19. Holmstrom, Bengt R. & Tirole, Jean, 1989. "The theory of the firm," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 2, pages 61-133, Elsevier.
    20. Abadie, Alberto, 2003. "Semiparametric instrumental variable estimation of treatment response models," Journal of Econometrics, Elsevier, vol. 113(2), pages 231-263, April.
    21. Alan Benson & Danielle Li & Kelly Shue, 2019. "Promotions and the Peter Principle," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(4), pages 2085-2134.
    22. Prendergast, Canice & Topel, Robert H, 1996. "Favoritism in Organizations," Journal of Political Economy, University of Chicago Press, vol. 104(5), pages 958-978, October.
    23. Bengt Holmstrom, 1979. "Moral Hazard and Observability," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 74-91, Spring.
    24. Morten Bennedsen & Kasper Meisner Nielsen & Francisco Perez-Gonzalez & Daniel Wolfenzon, 2007. "Inside the Family Firm: The Role of Families in Succession Decisions and Performance," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(2), pages 647-691.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Caliendo, Marco & Cobb-Clark, Deborah A. & Pfeifer, Harald & Uhlendorff, Arne & Wehner, Caroline, 2024. "Managers’ risk preferences and firm training investments," European Economic Review, Elsevier, vol. 161(C).
    2. Jean-Michel Benkert & Igor Letina & Shuo Liu, 2023. "Startup Acquisitions: Acquihires and Talent Hoarding," Papers 2308.10046, arXiv.org, revised Jul 2024.
    3. Jean-Michel Benkert, Igor Letina, Shuo Liu, 2023. "Startup Acquisitions: Acquihires and Talent Hoarding," Diskussionsschriften dp2309, Universitaet Bern, Departement Volkswirtschaft.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:eee:labchp:v:3:y:1999:i:pb:p:2373-2437 is not listed on IDEAS
    2. Oyer, Paul & Schaefer, Scott, 2011. "Personnel Economics: Hiring and Incentives," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 20, pages 1769-1823, Elsevier.
    3. Ekinci, Emre, 2019. "Discretionary bonuses and turnover," Labour Economics, Elsevier, vol. 60(C), pages 30-49.
    4. Alan Benson & Danielle Li & Kelly Shue, 2019. "Promotions and the Peter Principle," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(4), pages 2085-2134.
    5. Anders Frederiksen & Lisa B. Kahn & Fabian Lange, 2020. "Supervisors and Performance Management Systems," Journal of Political Economy, University of Chicago Press, vol. 128(6), pages 2123-2187.
    6. Pedro Ortín‐Ángel & Vicente Salas‐fumás, 1998. "Agency‐Theory and Internal‐Labor‐Market Explanations of Bonus Payments: Empirical Evidence from Spanish Firms," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 7(4), pages 573-613, December.
    7. Oriana Bandiera & Luigi Guiso & Andrea Prat & Raffaella Sadun, 2015. "Matching Firms, Managers, and Incentives," Journal of Labor Economics, University of Chicago Press, vol. 33(3), pages 623-681.
    8. Luis Garicano & Luis Rayo, 2016. "Why Organizations Fail: Models and Cases," Journal of Economic Literature, American Economic Association, vol. 54(1), pages 137-192, March.
    9. Margaret A. Abernethy & Chung-Yu Hung & Laurence van Lent, 2020. "Expertise and Discretionary Bonus Decisions," Management Science, INFORMS, vol. 66(1), pages 415-432, January.
    10. Siebert, W. Stanley & Zubanov, Nick, 2008. "Management Economics in a Large Retail Organization," IZA Discussion Papers 3645, Institute of Labor Economics (IZA).
    11. Mario Bossler & Philipp Grunau, 2020. "Asymmetric information in external versus internal promotions," Empirical Economics, Springer, vol. 59(6), pages 2977-2998, December.
    12. Stephen Eliot Hansen, 2010. "The Benefits of Limited Feedback in Organizations," Working Papers 490, Barcelona School of Economics.
    13. Elena Pastorino, 2015. "Job Matching Within And Across Firms," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 56(2), pages 647-671, May.
    14. Dirk E. Black & Marshall D. Vance, 2021. "Do First Impressions Last? The Impact of Initial Assessments and Subsequent Performance on Promotion Decisions," Management Science, INFORMS, vol. 67(7), pages 4556-4576, July.
    15. Kathryn L. Shaw, 2019. "Bosses matter: The effects of managers on workers’ performance," IZA World of Labor, Institute of Labor Economics (IZA), pages 456-456, January.
    16. Caliendo, Marco & Cobb-Clark, Deborah A. & Pfeifer, Harald & Uhlendorff, Arne & Wehner, Caroline, 2024. "Managers’ risk preferences and firm training investments," European Economic Review, Elsevier, vol. 161(C).
    17. Jenter, Dirk & Cziraki, Peter, 2021. "The Market for CEOs," CEPR Discussion Papers 16281, C.E.P.R. Discussion Papers.
    18. John, Kose & Ravid, S. Abraham & Sunder, Jayanthi, 2017. "Managerial ability and success: Evidence from the career paths of film directors," Journal of Corporate Finance, Elsevier, vol. 44(C), pages 425-439.
    19. Antonio Falato & Dalida Kadyrzhanova, 2012. "CEO successions and firm performance in the US financial industry," Finance and Economics Discussion Series 2012-79, Board of Governors of the Federal Reserve System (U.S.).
    20. Kathrin Manthei & Dirk Sliwka & Timo Vogelsang, 2023. "Talking About Performance or Paying for It? A Field Experiment on Performance Reviews and Incentives," Management Science, INFORMS, vol. 69(4), pages 2198-2216, April.
    21. Nick Zubanov & W.S. Siebert, 2009. "Management economics in a large UK retailer," CPB Discussion Paper 125, CPB Netherlands Bureau for Economic Policy Analysis.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2206.15098. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.