SEARCH

SEARCH BY CITATION

Recruiting high-ability workers and implementing optimal efforts are among the key objectives of a firm's personnel policy. We show that, if the firm applies a tournament scheme—that is, a competitive career system—selection and incentive issues are strictly interrelated, thus leading to a fundamental conflict: if the firm is primarily interested in balanced worker competition, there will be a rationale for hiring low-ability workers (‘lemons’). Copyright © 2012 John Wiley & Sons, Ltd.