Candidate Selection in Business Units: Be the Best or Surround Yourself with the Best?

• In Event: Career Concerns: Evaluations, Promotions, and Guilt

Abstract

This study investigates, via an experiment, how status considerations in the presence of relative performance information shape the impact of the organizational selection process on the caliber of employee selected by business units. Specifically, we investigate how an organization’s employee selection process (centralized vs. decentralized) and the information available to decision-makers in that selection process (low vs. high) affect the caliber of employees selected by a business unit in a team-based environment. We find that when low levels of candidate-specific information are present, the quality of the selected employee is lower under a decentralized than under the centralized selection process. We also find that under both centralized and decentralized selection processes, providing decisions-makers with more information about candidates is only beneficial when it decreases ambiguity regarding who is the best candidate and is harmful when it increases this ambiguity. Overall, our results indicate that non-pecuniary status considerations can significantly influence employee selection decisions in organizations.

Authors

• Jeremy Lill, University of Kansas

• Michael John Majerczyk, Georgia State University

• Ivo D Tafkov, Georgia State University