Externalities in recruiting

Kräkel, Matthias; Szech, Nora; von Bieberstein, Frauke (2014). Externalities in recruiting. Journal of economic behavior & organization, 107(Part A), pp. 123-135. Elsevier 10.1016/j.jebo.2014.08.008

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External recruiting at least weakly improves the quality of the pool of applicants, but the incentive implications are less clear. Using a contest model, this paper investigates the pure incentive effects of external recruiting. Our results show that if workers are heterogeneous, opening up a firm's career system may lead to a homogenization of the pool of contestants and thus encourage the firm's high-ability workers to exert more effort. If this positive effect outweighs the discouragement of low-ability workers, the firm will benefit from external recruiting. If, however, the discouragement effect dominates the homogenization effect, the firm should disregard external recruiting. In addition, product market competition may mean that opening up the career system becomes less attractive for a firm since it increases the incentives of its competitors’ workers and hence strengthens the competitors.

Item Type:

Journal Article (Original Article)

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Business Management > Institute of Organization and Human Resource Management > Organisation

UniBE Contributor:

von Bieberstein, Frauke

Subjects:

600 Technology > 650 Management & public relations
300 Social sciences, sociology & anthropology > 330 Economics

ISSN:

0167-2681

Publisher:

Elsevier

Language:

English

Submitter:

Frauke von Bieberstein

Date Deposited:

22 May 2015 09:07

Last Modified:

20 Jul 2017 14:08

Publisher DOI:

10.1016/j.jebo.2014.08.008

BORIS DOI:

10.7892/boris.68837

URI:

https://boris.unibe.ch/id/eprint/68837

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