Strategic Shirking in Promotion Tournaments

We provide a theoretical analysis of multitask promotion tournaments in which workers increase their promotion chances by under-performing (over-performing) on tasks that are de-emphasized (emphasized) in a promotion rule. In some settings the firm can mitigate such "strategic shirking" by committing to a promotion rule that requires more balance in the performances across job tasks than would be justified on productivity grounds. The model can explain "Putt’s Law", which states that competent workers are sometimes passed over for promotion in favor of incompetent ones. (JEL J24, M53).