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Evaluating Competing Promotion Systems
A mid-sized software company is experiencing high turnover among its developers. To improve motivation and retention, management is considering two different promotion systems.
System A (Tournament Model): Once a year, all developers at a given level are ranked based on a combination of project outcomes and manager reviews. Only the top 15% of performers are promoted to the next level.
System B (Milestone Model): The company establishes a clear, public list of technical skills, completed training modules, and successful project leadership experiences required for advancement. Any developer who verifiably achieves all milestones for the next level is promoted at a quarterly review, regardless of how many others also qualify.
As an economic consultant, which system would you recommend to the company? Justify your recommendation by evaluating the likely effects of each system on individual employee effort, teamwork, and overall retention.
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Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
Evaluation in Bloom's Taxonomy
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