Posting and slotting: How hiring processes shape the quality of hire and compensation in internal labor markets
Keller, J.R.
JR Keller - Administrative Science Quarterly, 2018 - journals.sagepub.com
Summary
In "Posting and slotting: How hiring processes shape the quality of hire and compensation in internal labor markets," J.R. Keller (2018) investigates the often-overlooked distinctions within internal hiring practices and their significant consequences for both organizations and employees. The research addresses a gap in understanding how different internal mobility processes affect talent outcomes, particularly focusing on two prevalent methods: "posting" and "slotting". Posting is characterized as a predominantly market-based process where managers publicly advertise open positions and invite applications, fostering a broader candidate pool. In contrast, slotting is a more relational approach, where a manager identifies a preferred candidate they personally know and places them into the role without a widespread search. The study aimed to ascertain how these divergent processes influence the quality of hire and compensation. The methodology involved a comprehensive analysis of 8,107 internal hires within a large U.S. health-services firm. This robust dataset allowed Keller to compare the performance ratings, salary outcomes, and retention rates of employees hired through posting versus those hired through slotting. Complementary qualitative data from interviews with employees at the health-services firm and surveys of 50 other large U.S. firms provided additional context and insights into the nuances of these hiring practices. The findings demonstrated that the method of internal job movement significantly shapes subsequent outcomes. Specifically, workers who secured their positions through the posting process consistently exhibited higher performance ratings, commanded higher initial salaries, and were less likely to leave the firm compared to their counterparts who were slotted into roles. The research suggests that posting improves the quality of hires by expanding the pool of potential candidates at the recruitment stage and by promoting more objective evaluation criteria at the selection stage. Furthermore, employees hired via posting were found to be more proactive and effective in salary negotiations, contributing to their higher compensation. These implications suggest that organizations can enhance their internal labor markets by adopting more transparent and merit-based posting systems, leading to better talent allocation, improved employee performance, and greater retention, thereby creating long-term value for the organization. However, the author also cautions that merely posting jobs without genuine consideration of all applicants will not yield these benefits, as managers may still be inclined towards slotting due to factors like overconfidence, personal experience, time constraints, or favoritism.
Key Findings
- - Employees hired internally through a job "posting" process demonstrate higher performance ratings, earn greater salaries, and exhibit lower turnover rates compared to those "slotted" into positions.
- The posting process enhances the quality of internal hires by broadening the candidate pool and enforcing more disciplined, information-based candidate evaluation.
- Internal candidates hired via posting are more inclined to initiate and successfully negotiate for higher initial salaries.
- While internal hiring generally benefits firms in terms of performance and retention, the specific process (posting vs. slotting) used for these internal moves critically shapes the outcomes for both employees and the organization.