Designing internal labor markets and reducing frictions in employee retention is an important challenge for human resource management (HRM). The aim of the project was twofold. The first part investigated theoretically and empirically the job search behavior of high performing workers in a setting under two sources of asymmetric information: First, the firms know a worker’s relative productivity better than the worker herself. Second, the worker does not know the number and frequency of future promotions. Two HRM instruments were in the focus: performance appraisals and gender quotas. In the second part, the analysis of the role of non-monetary match quality for the search and quit process was the matter of interest. Workers who perceive a low match quality are likely to show a high turnover intention but high search costs might reduce their actual quit rate. They finally reduce their effort and thus productivity if they remain in the firm. The aim was to analyze whether certain HRM instruments can be used to incentivize these workers to search and quit more frequently.

From 01.08.2020 onward, the project was continued solely by the Market Design research unit.