- Firm-specific skills, or those skills acquired through working at a specific organization, are often necessary for succeeding at certain jobs; and internal employees possess higher levels of these skills than do people outside the firm. But, managers either fail to recognize the importance of firm-specific skills or discount their importance, as managers are just as likely to fill jobs requiring high levels of firm-specific skills with external hires as they are with internal candidates.
- Organizations frequently hire “star performers” into jobs where they are unable to demonstrate their superior performance.
- For some jobs, particularly those with many junior positions per senior position, managers have a strong mandate to fill those jobs internally rather than hire from outside.
- Some managers are aware that routinely selecting external rather than internal candidates for certain jobs can degrade employees’ morale, and tend to fill these positions internally rather than externally.
- Jobs in which specific employees are able to exhibit a wider range of performance quality tend to be filled more by internally promoted or transferred workers, rather than by external hires.