Using Optional Job Rotation Programs to Gauge On-the-Job Learning

This paper presents one reason for adopting diverse work assignments, rooted in a desire to match employees' pay with the skills they have cultivated on the job. When on-the-job learning parlays into attractive external opportunities, employees may threaten to seek a different and higher paying job elsewhere. By instituting an optional job rotation program, a firm can offer such an opportunity internally. Since new tasks are difficult for employees to undertake, compensation arrangements can be structured to guarantee that only a truly skilled (versatile) employee wants to take on such a challenge.