Strength from Within: Internal Mobility and the Retention of High Performers

Benson, Alan, and Ben A. Rissing. 2020. "Strength from Within: Internal Mobility and the Retention of High Performers." Organization Science, 31(6): 1313-1620.

47 Pages Posted: 6 Jan 2020 Last revised: 16 Jan 2021

See all articles by Alan Benson

Alan Benson

University of Minnesota - Twin Cities - Carlson School of Management; Massachusetts Institute of Technology (MIT)

Ben A. Rissing

Cornell University - School of Industrial and Labor Relations

Date Written: December 13, 2019

Abstract

We develop and test a theoretically informed and generalizable empirical framework for evaluating the performance gap between internally and externally hired workers. First, human capital theory predicts that internal hires will be immediately more productive than external hires. Second, contextual learning predicts that internal hires will be more productive with time. Finally, theories of commitment, which are rarely applied to this literature, predict that internal advancement enhances retention among high performers (“positive retention”). Applying a general empirical framework for quantifying the relative contributions of these mechanisms to a retailer with 109,063 commissioned salespeople and their 12,931 managers, we find that the gap in our setting is primarily driven by positive retention: high performers and internal hires are less likely to quit, and crucially, high performing internal hires are especially unlikely to quit. When high performing internal hires do quit, they tend to cite reasons unrelated to work rather than advancement opportunities. By typically examining performance and retention in isolation, researchers and organizations may be underestimating the importance of internal advancement as a means of retaining of high performers.

Keywords: Hiring, careers, promotion, productivity, internal labor markets, turnover, rm-speci c skills, learning, commitment

JEL Classification: M51, J31, J62, J63

Suggested Citation

Benson, Alan and Rissing, Ben A., Strength from Within: Internal Mobility and the Retention of High Performers (December 13, 2019). Benson, Alan, and Ben A. Rissing. 2020. "Strength from Within: Internal Mobility and the Retention of High Performers." Organization Science, 31(6): 1313-1620., Available at SSRN: https://ssrn.com/abstract=3503708 or http://dx.doi.org/10.2139/ssrn.3503708

Alan Benson (Contact Author)

University of Minnesota - Twin Cities - Carlson School of Management ( email )

19th Avenue South
Minneapolis, MN 55455
United States

HOME PAGE: http://https://sites.google.com/site/amb263/

Massachusetts Institute of Technology (MIT) ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

HOME PAGE: http://web.mit.edu/alanmb/www/index.htm

Ben A. Rissing

Cornell University - School of Industrial and Labor Relations ( email )

Ithaca, NY 14853-3901
United States

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