Determinants of promotions in an internal labour market: testing implications from tournament theory and efficient allocation

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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.
Original languageEnglish
JournalSchmalenbach Business Review
Issue number1
Pages (from-to)342-358
Number of pages14
Publication statusPublished - 2010