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To select and retain the best employees, managers must be aware of the
determinants of career attainment in their firm (Rosenbaum, 1989). In order to
understand better the determinants of career success, many different models
and variables have been used (Judge et al., 1995; Kirchmeyer, 1998; Rosenbaum, Personnel Review
1989; Seibert et al., 1999, 2001). Career attainment has been defined in various Vol. 32 No. 2, 2003
pp. 133-150
ways in previous research. Both external and internal variables have been used q MCB UP Limited
0048-3486
to represent career attainment. Extrinsic variables have included salary DOI 10.1108/00483480310460180
PR (Siebert et al., 2001), promotions (Wayne et al., 1999), and hierarchical level
32,2 (Hurley and Sonnenfeld, 1998), while intrinsic variables have included feelings
of accomplishment, job satisfaction and career satisfaction (London and
Stumpf, 1982; Judge and Bretz, 1994). In this paper we define career attainment
as hierarchical level attained in organization.
The tournament model of career mobility is frequently used to describe
134 managerial career attainment determinants in internal labor market (ILM)
firms. Within ILM firms potential employees encounter barriers to entry into
the firms’ workforce and are restricted to a number of low-level positions from
which they must work their way up (Scott, 1987). The tournament model of
careers contends that organizations operate similarly to sports tournaments
with a set number of rounds and only the winners of each round are allowed to
compete at the next level. In organizations employees must win each round and
earn the promotion in order to move into higher levels of management
(Rosenbaum, 1989). Rosenbaum (1989) used signaling theory to describe the
process surrounding decisions about who wins the tournament round.
Signaling theory posits that because of the difficulty of getting information
about a person’s ability, employers will use indicators of employee ability to
make promotion decisions. Studies have suggested that managers have often
used organizational experience factors as signals of an employee’s abilities
(Hurley and Sonnenfeld, 1998; Rosenbaum, 1989). Within an ILM firm, these
signals are derived from an employee’s work history within the firm.
Research indicates that in order to remain competitive, ILMs should hire
some high-level managers from the external labor market. Some researchers
suggest that hiring external labor market managers is important in order for
the organizations to avoid becoming “dinosaurs” (Lawler and Galbraith, 1994).
Dinosaur organizations are unable to respond quickly to their changing
environments. Managers are advised to hire specialists from outside their
organizations to remain competitive.
When external hires are made into managerial levels in an ILM organization,
the tournament model may have to be modified. External hires do not provide
the work history signals that managers may use when making promotion
decisions. This may be beneficial for the external management hires. These
external hires enter the firm with a “clean slate.” Information may only be
available on their past career successes while internal candidates have
information on both their past career successes and mistakes available to those
making promotion decisions.
The purpose of this paper is to contribute to tournament mobility research
on careers by examining the promotion patterns of employees within an ILM
organization, in comparison to “late entrants”, those entering managerial levels
from the external labor market. An ILM organization provides the ideal
research site within which to study management selection. However, few
organizations are willing to open up their records regarding management
promotions, limiting research on ILM organizations (Powell and Butterfield, The clean slate
1994). Also, because of firms’ reluctance to share internal organizational effect?
records, those studies that have focused on or included top managers often find
it necessary to use self-reported surveys (Tharenou et al., 1994). This study
examines the career attainment of both late entrants into an organization and
those who entered the organization at entry-level positions. Data collected from
the human resource information system of a large US-based corporation 135
enabled us to research the effects of various factors on external and internal
managerial career attainment in an ILM.
Method
Sample
The research site was a large US-based international company in the service
industry with over 200,000 personnel widely dispersed across the USA. Most
employees enter the firm at a low level and are promoted from within. The firm
has a very low turnover rate (less than 4 percent). Information on managers’ The clean slate
careers was obtained from the firm’s computerized record system. effect?
There are 251 pairs of mid-level managers (n = 502 managers of the 27,141
total managers in the firm) in our sample with one member of the pair having
entered the firm at a managerial level and one having entered at an entry-level
position. In other words, half the sample consisted of 251 mid-level managers
who entered the firm in a managerial position and had obtained one promotion
139
(late organization entrants). The other half of the sample consisted of 251 mid-
level managers who had entered the firm through entry-level positions (early
organization entrants) and had attained the same current managerial level as
the late organization entrants.
Pairing managers who had obtained similar career attainment (except only
half had entered in entry level positions) allowed us to compare early and late
entrants. The entire sample did not have the same managerial level, but each
individual pair had attained the same managerial level. Because of the small
number of women and minority top managers we could not also match on race
and gender. The sample was 6 percent female and 87 percent white. Table I
lists demographic data for both the early and late entrants.
Measures
Career attainment. The company’s organizational structure has the shape of a
pyramid with a reasonably wide base, and there are ten career levels in the firm
with levels four to ten representing managerial levels. These seven levels were
used to indicate a manager’s current level of career attainment. Levels 5
through 8 are considered mid-level management. Salary information was not
Entered
Entered entry- Entered management
level management (early and late-
(early entrants) (late entrants) total entrants)
Variables Means Std dev. Means Std dev. Means Std dev.
Number of years to mid management 2.65*** 5.48 1.13 3.39 1.89 4.62
Gender (female) 0.09** 0.29 0.02 0.15 0.06 0.23
Non-white 0.16 0.36 0.10 0.30 0.13 0.33
Number years in corporate 0.33 1.39 0.55 2.61 0.44 2.09
Most recent job in corporate 0.07 0.25 0.07 0.26 0.07 0.25
Performance ratings 4.20 0.76 4.23 0.80 4.21 0.78
Number of years of line experience 11.42* 7.46 13.28 10.59 12.35 9.19
Number of different jobs 9.01* 4.03 8.15 5.6 8.58 4.89 Table I.
Number of different departments 2.57** 1.12 2.22 1.33 2.40 1.24 Means, standard
Education 2.06 1.82** 1.16 1.68 1.62 1.81 deviations and
Tenure 17.01 6.27*** 21.08 7.42 19.05 7.16 t-tests for
Notes: T-tests preformed comparing early entrants to late entrants demographic
* p , 0.05; ** p , 0.01; *** p , 0.001 variables
PR available for these managers. However, the salary system is a grade system,
32,2 and salary is highly correlated with level.
Entering managerial level. A dichotomous variable was used to represent
whether the manager had entered in a managerial position. A value of one
indicated the manager entered the firm in a managerial position (level 4-8) and
a value of zero indicated the employee entered through an entry-level position
140 (level 1-3). This allowed us to test our hypotheses regarding those who entered
the organization through entry-level positions versus those who entered
through managerial positions.
Number of years to middle management. The number of years it took the
manager to reach middle management (level 5) was used to measure the
tournament mobility effect which indicates that the longer it takes for a
manager to reach middle management, the lower the career attainment
(Rosenbaum, 1984).
Gender and race. A dichotomous variable with a value of one assigned to
female was created for this study. For race, a dichotomous variable was created
having a value of zero assigned to white which represented the majority of the
managers in the organization, and a value of one was assigned if the manager
was AfricanAmerican, American Indian, AsianAmerican or Hispanic
(nonwhite).
Number of years in corporate headquarters. This variable indicates how
many total years the employee had worked in corporate headquarters in their
career with this firm. This information was obtained from company records.
Most recent job in corporate headquarters. This variable indicates whether
the employee’s most recent job prior to their current position was in corporate
headquarters. This dichotomous variable was included in the model with a
value of one indicating that the manager’s most recent job prior to their current
position was in the corporate headquarters.
Entering managerial level interaction effects. To examine potential
moderating effects of entering at a managerial level on corporate experience,
race, and gender, interaction terms were created. A total of four interaction
variables were computed. The interaction of entering managerial level with
number of years in corporate headquarters, most recent job in corporate
headquarters, gender and race were computed.
Control variables
Career success research predicts that experience and performance evaluations
will affect employees’ career attainment (Kirchmeyer, 1998; Rosenbaum, 1989).
Therefore these variables were controlled for in the analyses.
Performance ratings. This is an overall effectiveness rating for the
employee that is a combination of a performance and skill appraisal. This
rating is taken from the most recent performance evaluation done by the
employee’s direct manager. The scale used in the evaluations is 1 to 6 with
6 being the highest possible rating. The performance evaluations are done The clean slate
once a year. effect?
Line experience. Functional area may play an important role in a manager’s
career attainment. Some functional areas are associated with greater centrality
in a firm’s networks, therefore leading to greater availability of information
about the firm. Functional area has often been investigated in terms of line
versus staff departments. In many firms the functional areas leading to
141
greatest centrality are the line departments. Research has found that gaining
line experience early in one’s career enhances career success and is necessary to
move into upper management levels (Cox and Harquail, 1991; Larwood and
Gattiker, 1987; McCauley et al., 1994). Rosenbaum (1984) found that those with
line experience had higher rates of promotions than those without line
experience. The number of years an employee had spent in line departments is
included in the model.
Job and department experience. There is considerable debate as to whether
top managers need a corporate-wide operating knowledge base or a core
function expertise (Michel and Hambrick, 1992). Research suggests that in
firms where departments must cooperate for maximum performance, top
managers must have knowledge of all corporate-wide operating activities (Hill
and Hoskisson, 1987). The implication for managerial careers in such
organizations is that managers must gain this knowledge and experience
through transfers between different departments (i.e. lateral career movement).
This breadth of experience in the firm helps them develop firm-specific human
capital (Williamson, 1975). Breadth of experience as human capital allows top
managers to have an organization-wide perspective.
Managers’ breadth of experience in the firm was represented by two
variables in the present study. First, the number of different jobs they have
held in the firm, including both lateral and upward moves, was included.
Second, the number of jobs held in a firm does not take into account their
departmental affiliation. Two people may have held the same number of
different jobs, but one had a career in only one department while the other
person moved from department to department. Managers also need experience
in many departments before moving into top management. The second
variable to illustrate breadth of experience is the number of different
departments in which a manager had held positions.
Data analysis
Correlation coefficients between all variables were computed. To examine
multivariate effects, multiple hierarchical (moderated) regression analysis was
conducted, entering the control variables into the equation, followed by the
predictor variables indicated in H1 through H6 (Cohen and Cohen, 1983). The
interaction variables to explore the moderating effects of late entry were
entered in step 3. Career attainment was regressed on the control variables, the
PR hypothesized predictor variables (late entry, number of years before reaching
32,2 middle management, gender, race, years in corporate headquarters and
previous job in corporate), and the interaction or moderating variables. As a
follow up analysis, post hoc t-tests were performed, comparing late entrants
into the organization to those who had been with the firm their entire careers to
examine the direction of the effects on the control and predictor variables.
142
Results
Means and standard deviations for early entrants, late entrants and the total
sample are presented in Table I. Bivariate correlations, means and standard
deviations for all variables are presented in Table II. There were two high
correlations which required examination: number of years spent in the
corporate region and whether the employee was in the corporate region prior to
their current position (0.67); and number of different departments and number
of different jobs (0.65). Each of the above high correlations is due to two items
being used to represent the variables of breadth of experience and time in
corporate headquarters. Although they are both under 0.8 (Lewis-Beck, 1980),
we looked at the variance inflation factors (VIF) for these four variables, and
their low values indicate that these four variables did not pose a problem in the
statistical analysis. Therefore the four variables were included in the regression
equation. Variables should be excluded from an equation if their VIF is over 10
(Yu, 2002), however the highest VIF was 1.9 for job count. Since, it was
important to examine the relative contributions of these variables, hierarchical
regression analysis was performed.
The results of the regression analyses testing the direct and interaction
influences on career attainment are presented in Table III. The overall
regression equation was significant and accounted for 33 percent of the
variance in managers’ career attainment. As indicated, late entry into the ILM
was significantly and positively related to career attainment supporting H1 or
the clean slate effect. However, the tournament mobility results, although
significant, were in the opposite direction as expected (H2); the number of years
to middle management was significantly and positively related to career
attainment. Gender was found to be a significant predictor of career attainment
(H3). Specifically being female was negatively related to career attainment.
However, in this study race was not a (H4) significant predictor of career
attainment. This was perhaps due to the small number of minorities in the
sample. The number of years spent in the corporate headquarters was
positively related to career attainment supporting H5. Finally, a positive
relationship was found for the relationship between the manager’s previous job
being in the corporate region and his or her career attainment supporting H6.
None of the individual interaction terms involving late entry was a significant
unique predictor of career attainment.
Variable 1 2 3 4 5 6 7 8 9 10
Descriptive
effect?
correlations
statistics and
The clean slate
Table II.
143
PR
Variables b b T Adj R 2
32,2
Control variables
Line years 2 0.007 20.111 2 2.809*
No. of different departments 0.009 0.018 0.370
No. of different jobs 0.018 0.142 2.831*
144 Previous performance appraisal 0.072 0.093 2.469*
0.119
Predictor variables
Non-white 2 0.003 20.002 2 0.043
Previously corporate 0.965 0.408 8.233**
No. of corporate years 0.048 0.166 3.401**
Female 2 0.202 20.078 2 2.109*
Years to mid management 0.046 0.348 9.072**
Table III. Entered as manager 0.092 0.077 2.046*
Results of Adj R 2 0.357
regression analysis F 36.247**
model 1 Notes: * p , 0.05; ** p , 0.001
The results of the t-tests (Table I) indicated that there were some significant
differences between those who entered management and those who entered the
company at the entry level. Those who had spent their entire career in the
organization had held more jobs and had been in more departments (i.e. more
breadth of managerial experience). However, these early entrant managers had
fewer line years and had taken longer to reach middle management. More men
had entered the firm at the managerial levels (late entrants) than women.
Managerial implications
For individuals who are stuck in seemingly dead-end positions or for those who
have tarnished reputations due to their organizational mistakes, the clean slate
effect demonstrated in this research indicates that in some cases managers are
able to create a better impression and have greater career attainment through a
fresh start with a new organization. In addition, when these managers change
organizations, it may help to keep the firm from becoming “stale” due to new
ideas being infused into the organization by the new external labor market
hires.
Interestingly, the tournament model, which indicates that early career
success is critical for future career success, was not supported. Length of time
to reach middle management in years was not related to career attainment.
This gives hope to individuals who do not attain early career success indicating
that persistence over time also plays a role in achieving higher-level
management positions.
Being male was positively related to career attainment and late entrants into
the organization were more likely to be male. This is reflective of the fact that
worldwide organizations are still dominated at the upper levels by males.
Firms could take the extra step to develop talented females and other minorities
by providing them more opportunities for advancement, additional career
training and mentoring opportunities. In addition targeted recruiting could
PR locate talented minorities who may typically be overlooked. Having more
32,2 women and minorities in top management could ultimately be beneficial to
organization by providing diverse perspectives and solutions to problems.
The results of this study indicate that it is important for lower-level
managers to gain experience working in the corporate region of organizations
before they are considered for top-level managerial positions, and that the
148 number of years in the corporate headquarters and the recency of corporate
experience are both important to career attainment. It appears that it is helpful
to be personally known by corporate decision makers prior to being promoted
to top management positions from middle management. Being aware of this
research finding can be helpful to managers in planning their careers. A
manager who is located far from corporate headquarters and wants to advance
to the top ranks of the organization should probably try to be relocated in order
to obtain more exposure to upper management.
Conclusion
This study attempts to elucidate some of the factors related to career
attainment as indicated by number of promotions. It draws to the forefront the
possibility of the clean slate effect occurring in which late entrants into an
internal labor market achieve greater career attainment. It also provides
evidence that the tournament model of promotions is not always applicable and
with perseverance managers who do not attain early career success can still
ultimately make it to the top levels of management. Career attainment was not
equal for males and females in this study indicating a need to delve into this
issue to understand the causes of these inequities and potential solutions.
Finally, this research indicated that exposure in corporate headquarters can be
an important factor in career attainment.
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