Using Job Rotation to Extract Employee Information

Abstract

Job rotation refers to the practice of routinely transferring employees between jobs. The explanations provided for job rotation are as varied as its uses.Some posit that complementarities and learning across tasks allow increased productive efficiency, while others speculate that employees' inherent craving for variety drives the use of job rotation. This paper provides another explanation. When agents privately learn about the productivity of tasks on which they work, job rotation can be an efficient means of eliciting their information. Each agent freely communicates his information since the switch in tasks guarantees his report will not subsequently be used against him; the report is used primarily in evaluating the new agent who moves into the task.Job rotation also comes with a cost -- agents have to be compensated for the added disutility associated with working on new tasks. We study this tradeoff and identify conditions under which job rotation and specialization are each optimal.