Many employees have been in the position of applying for an internal position, only to see the job go to someone from outside the company. But the latest research research by a management professor at the Wharton school at the University of Pennsylvania could add insult to injury.
Matthew Bidwell has found that although outside hires receive a significantly lower performance evaluation in the first two years of their new job compared with internal workers who are promoted into similar jobs, they still earn considerably more, sometimes as much as 20 per cent more than internal hires in similar positions.
The spur for Prof Bidwell’s research has been the increased mobility of workers in recent years. In comparing the pay and performance of internal and external hires Prof Bidwell hopes to help employees understand more “about the consequences of their career decisions” and whether pursuing an internal promotion or perhaps looking for a job in another company is the way forward.
Prof Bidwell says that external hires take about two years to “get up to speed” because he suggests they need that amount of time to build networks and become effective in their new role. During this period he adds, external hires run a significant risk of failure if they do not perform as well as expected.
External hires also tend to have more experience and have better qualifications than internal hires adds Prof Bidwell which might well account for their higher remuneration.
“When you know less about the person you are hiring, you tend to be more rigorous about the things you can see,” he says. Education and experience can be seen on a CV and verified he adds, although the Prof Bidwell adds a note of caution.
“Education and experience are reasonably weak signals of how good somebody will be on the job.”
So faced with this research should employees forego their job security and look for a promotion to another company where they could hopefully earn significantly more, or should they try for an internal promotion?
Prof Bidwell advises employees that if they like where they are working, then they should stay there. Although staying put may mean less remuneration, an employee’s performance will be better and there will be more job security.
His paper Paying more to get less: the effect of external hiring versus internal mobility is published in Knowledge@Wharton.
● With women comprising 50 per cent of the workforce in some countries, attitudes to working women in the west have changed dramatically. However, intrigued by what they describe as a “resistance to the gender revolution in the workplace” a group of academics have looked at married male employees whose wives stay at home, what they describe as traditional marriages.
The academics wanted to discover how the attitudes of these men were similar to or different from those of male employees in modern marriages, ie men whose wives work full time.
Sreedhari Desai, an assistant professor of organisational behaviour at Kenan-Flagler Business School at the University of North Carolina, Dolly Chugh an assistant professor in the department of management and organisations at NYU Stern and Arthur Brief a professor in the department of management at the University of Utah questioned 718 married men, some whose wives were at home full time, some whose wives worked part time and also those whose wives worked full time.
They discovered that those men with traditional marriages were more likely to countenance behaviour and attitudes that were harmful to women in the workplace. From their findings the authors suggest that men in traditional marriages are more likely to consider companies that have women leaders to be relatively unattractive and are also more likely to deny qualified female employees opportunities for promotion. They are also more likely to view the presence of women in the workplace unfavourably and to see those companies with large numbers of female employees as working less smoothly.
The paper Marriage structure and resistance to the gender revolution in the workplace is published on the Social Science Research Network.