CLS Working Papers,
University of Aarhus, Aarhus School of Business, Centre for Labour Market and Social Research

Abstract: This paper analyzes the costs and benefits of job rotation as a mechanism through which the firm learns about the employees' productivities and the profitability of different jobs or activities. We compare job rotation to an assignment policy where employees specialize in one job along their career. We find that rotation is more profitable than specialization the larger the prior uncertainty about employees and activities. We argue that our firm learning theory fits the existing evidence on rotation better than alternative explanations based on employee motivation and employee learning.

Keywords: Job rotation; Productivity

JEL-codes: J60

22 pages, April 1, 2000

Note: Published in: Management Science, Vol. 47, No. 10, pp. 1361-1370 (www.informs.orgs/Pubs/Mansci/)

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