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Promotion Systems and Organizational Performance: A ...

Computational & Mathematical Organization Theory 7, 207 232, 2001 Kluwer Academic Publishers. Manufactured in The Systems and Organizational Performance: A Contingency ModelSTEVEN E. PHELAN AND ZHIANG LINS chool of Management, University of Texas at Dallas, Richardson, TX 75083-0688email: study explores the Organizational impact of a variety of important Promotion Systems commonly practicedin organizations including up-or-out Systems , absolute merit-based Systems , relative merit-based Systems , andseniority-based Systems . Through the computer simulation of organizations in a distributed decision making setting,the results indicate that the effectiveness of any Promotion system is dependent on a range of factors including thenature of the task environment, the design of the Organizational structure, the frequency of monitoring, the criteriaof performance , and the transferability of task knowledge.

PROMOTION SYSTEMS AND ORGANIZATIONAL PERFORMANCE 211 Let us assume that performance in a population of promotion candidates for a given level is normally distributed with a mean of zero and a standard deviation of s.A candidate

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