Teaching to the Top and Searching for Superstars

Abstract

We consider the impact of recruitment and training policies for the incentives of agents with career concerns. Training can be targeted, that is it has (or is chosen to have) more of an impact on particular types of agents and recruitment techniques can focus on finding superstars or weeding out poor performers. We highlight that different ways to improve average ability can have exactly opposite implications for career concerns. While teaching to the top (training which is complimentary to skill) or identifying star performers increases agents' reputational concerns, teaching to the bottom has the opposite effect.

Keywords: reputation, career concern, recruitment policies, training policies

JEL Classification: C73, D82, M53