How the Data in Human Resource Information Systems Can Be Used to Help Organizations Gain Competitive Advantage

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CAHRS / Cornell University 187 Ives Hall Ithaca, NY 14853-3901 USA Tel. 607 255-9358 www.ilr.cornell.edu/CAHRS/

WORKING PAPER SERIES
Predicting Potential For Promotion: How The Data In Human Resource Information Systems Can Be Used To Help Organizations Gain Competitive Advantage Gary S. Fields
Working Paper 02 - 14

Predicting Potential for Promotion:

CAHRS WP02-14

Predicting Potential For Promotion: How The Data In Human Resource Information Systems Can Be Used To Help Organizations Gain Competitive Advantage

Gary S. Fields Cornell University School of Industrial and Labor Relations 250 Ives Hall Ithaca, NY 14853-3901 Tel: (607) 255-4561 Fax: (607) 255-4496 e-mail: gsf2@cornell.edu

July 2002

http://www.ilr.cornell.edu/cahrs This paper has not undergone formal review or approval of the faculty of the ILR School. It is intended to make results of Center research available to others interested in preliminary form to encourage discussion and suggestions.

Page 2

Predicting Potential for Promotion: Abstract

CAHRS WP02-14

This paper utilizes the data contained in the Human Resources Information System (HRIS) of a company, called here “Engineering Solutions,” and analyzes the drivers of potential for promotion among a sample of engineers. The methods used consist of basic statistical procedures, multiple regressions, ordered logits, and decompositions. The results show which variables are the main drivers of potential for promotion in this organization, which are minor drivers, and which do not matter at all.

Statement of Confidentiality: This manuscript is unpublished copyrighted work. It is for research purposes only and cannot be used for commercial purposes without the express written consent of the author, Gary S. Fields.  Gary S. Fields, 2002

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Predicting Potential for Promotion:

CAHRS WP02-14

Predicting Potential For Promotion: How The Data In Human Resource Information Systems Can Be Used To Help Organizations Gain Competitive Advantage This paper starts with a simple value proposition: that companies can gain competitive advantage by more fully utilizing the data in their internal human resource information systems (HRIS). By analyzing what has worked to produce top people within their own individual organizations, managers can seek out and develop those competencies in current employees and new hires. Equally importantly, by knowing what makes little or no difference in their particular context, managers can avoid wasting their time on the factors that are unimportant for them. The data found in human resource information systems complement the data that can be obtained from benchmarking and learning from the best practices of successful organizations (Rynes and Milkovich, 1986; Glanz and Dailey, 1992; Hammer and Champy, 1993; Pfeffer, 1998). When organizations benchmark, they study what has produced the best outcomes elsewhere and seek to act similarly. Certainly, there are many contexts in which learning from one’s competitors and peers and imitating their successes (and failures) makes a great deal of sense. However, in other situations, a more valuable source of information is the company’s own experience. This paper presents a detailed study of the potential for promotion for engineers in one particular company, here called “Engineering Solutions.” Numerous prior studies have been conducted of human resource variables in individual organizations (e.g., Medoff and Abraham, 1980, 1981; Caldwell and Spivey, 1983; Kirman, et al., 1989; Lazear, 1992; Baker, Gibbs, and Holmstrom, 1994a, 1994b; Batt, 1999, 2001). What these and other studies have in common is that they report which explanatory variables are statistically significant determinants of the dependent variable and, in the regression studies, the amount by which a one-unit increase in each explanatory variable affects the dependent variable. What they do not deliver, however, Page 4

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