PROMOTIONS AND THE PETER PRINCIPLE

• 成果类型: Article
• 署名作者: Benson, Alan; Li, Danielle; Shue, Kelly
• 署名单位: University of Minnesota System; University of Minnesota Twin Cities; Massachusetts Institute of Technology (MIT); National Bureau of Economic Research; Yale University
• 刊物名称: QUARTERLY JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0033-5533
• DOI: 10.1093/qje/qjz022
• 发表日期: 2019
• 页码: 2085-2134
• 关键词: Incentives; COMPENSATION; performance; CONTRACTS; FIRMS

摘要

The best worker is not always the best candidate for manager. In these cases, do firms promote the best potential manager or the best worker in their current job? Using microdata on the performance of sales workers at 131 firms, we find evidence consistent with the Peter Principle, which proposes that firms prioritize current job performance in promotion decisions at the expense of other observable characteristics that better predict managerial performance. We estimate that the costs of promoting workers with lower managerial potential are high, suggesting either that firms are making inefficient promotion decisions or that the benefits of promotion-based incentives are great enough to justify the costs of managerial mismatch. We find that firms manage the costs of the Peter Principle by placing less weight on sales performance in promotion decisions when managerial roles entail greater responsibility and when frontline workers are incentivized by strong pay for performance. JEL Codes: M51, M52, J24, M12, J33, J31.