Rosenbaum Tournament Theory
Attracting, retaining and motivating the right people is crucial for the success of any organization. There are several theories about the dynamics behind this process, particularly where it concerns career advancement in corporate settings. James E. Rosenbaum's tournament theory, first published in 1979, remains influential among those academics and executives who want to know why some people stagnate while others skyrocket into the top positions.
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In a Nutshell
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Rosenbaum's tournament theory was first used to explain the large difference between CEO salaries and those of the executives at the next level within the hierarchy. The conclusion was that the large CEO salary was a top prize at the end of a long tournament, and it was not really meant as a reward, but as motivation for all the other competitors that would keep trying to reach the top prize.
The Rules
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The unwritten rules of the tournament, Rosenbaum theorized, are simple: A person entering an organization must compete in periodical invisible tournaments. Winners of the first round get a promotion, and the right to participate in a second round where they will only compete against other winners of the first round.The winner will get another promotion, the right to participate on a third tournament and so on, with those who keep winning the tournaments rising to the top. In order to keep motivation high, those who lose a round do not drop altogether from the race, but get to compete in smaller sub-tournaments.
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Motivation
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Rosenbaum's tournament toes not necessarily take place as a conscious decision from those in charge of promotions, but it comes as a consequence of the partially conflicting functions of the system: selection and motivation. Tournaments are used by decision-makers in order to get the right people into the right position, selecting and supporting the talent within the organization. Simultaneously, tournaments provide incentives, with the possibility of advancement motivating employees to give their best.
Consequences
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Because decision-makers do not have complete information about a person's ability, they must rely in several social attributes and accomplishments as signals of this ability, and said signals may or may not be accurate. Because early promotions lead to more favorable career prospects, with the promoted employee being labeled as a "fast tracker", an early promotion granted on inaccurate signals may in fact amplify these signals, creating a self-fulfilling prophecy where an employee rises through the ranks even if there are no actual abilities behind this advance.
Restrictions
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Rosenbaum's tournament model is based on several crucial assumptions, some of which have lost some validity since 1979. For example, he posits that after an initial "company-shopping period" most employees will settle into relatively stable employment, pursuing their career within a single organization. The model also presumes a large and hierarchically structured organization. While some companies and some employees will follow these patterns, many organizations have more agile or more unstable dynamics that may affect the applicability of the model.
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References
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