Management Accounting Section Midyear Meeting

Enhancing the Sorting Role of Promotions: The Effect of Learning Responsibility

• In Event: Incentives & Compensation (Experimental)

Abstract

We examine how varying the training method tied to a higher-level job helps enhance the sorting of employees. We expect the training method to influence the cost of acquiring the skills required to perform well in a higher-level job. More specifically, we hypothesize that when employees assume learning responsibility for the skills required in a higher-level job, they are more likely to factor differences between existing and required skills as a cost into their desire for promotion. The results of our experiment confirm this hypothesis: the difference in desire for promotion between employees whose current skills match those required in a higher-level job and employees whose skills do not is larger when employees bear more learning responsibility. Our results have implications for the promotion literature and for firms interested in using promotions to sort lower-level employees into higher-level jobs.

Authors

• Virginia Galster, WHU - Otto Beisheim School of Management

• Utz Schaeffer, WHU-Otto Beisheim School of Management

• Victor van Pelt, WHU - Otto Beisheim School of Management