Performance vs. lottery: department transfer system desired by employees

Abstract

Purpose Among the nonfinancial rewards for employees are career development opportunities, for which an important measure is department transfers. This is because departments are unevenly popular, and assigning everyone to their desired department is difficult. However, research on department transfers is limited to improving the efficiency of human resources utilization from a management perspective, with employee perspectives being lacking. This study aims to fill this gap in the literature. Design/methodology/approach The authors conducted a randomized controlled trial in an online survey environment with 2,000 full-time employees in Japan. Through the lens of self-determination theory, the authors hypothesized that employees seek department transfers based on performance rather than department transfers based on luck (lottery). Findings The results supported the hypothesis. For performance-based department transfers, an acceptance probability of 30% was found to be appropriate. Furthermore, mid-career, male, staff-level employees, those with experience of changing jobs and those who are more satisfied with their current job were more likely to seek this system. Practical implications Corporate managers should note that employees emphasize self-determination regarding their careers, dislike relying based on luck and seek department transfers relying on merit-based performance. Originality/value To the best of the authors’ knowledge, this is the first study to determine the desirable system design for department transfers from the employee’s perspective and extend self-determination theory.