A firm that fills its vacancies in the upper levels of the hierarchy with its own employees:

Question

Quizplus · Accepted Answer

A firm that fills its vacancies in the upper levels of the hierarchy with its own employees uses an internal labor market. This can have several benefits, such as avoiding the costs of external recruiting and onboarding, promoting employee loyalty and motivation, and facilitating knowledge sharing and organizational learning. However, it may also create some drawbacks, such as limiting diversity and creativity, perpetuating existing power structures and norms, and causing resentment and frustration among those who are not promoted. The other options - avoiding opportunistic behavior by employees, avoiding the difficult tasks of measuring and comparing the productivities of individual workers, and paying them according to their performance rather than seniority - are not necessary outcomes of using an internal labor market, but could be related to other HR practices or policies.

A Firm That Fills Its Vacancies in the Upper Levels