What are the Relationships Between Job and Organizational Tenure, and Job Performance?

Abstract

A pressing issue for companies with a strong focus on internal development is maximizing employee performance within a given role before the employee moves into a new position. Further, companies may seek to understand when the performance impact of firm-specific skills is greatest. Job and organizational tenure are some of the most readily available metrics organizations have for their employees. Yet the relationship between tenure and performance is not always clear. Two contrasting theoretical approaches underpin this relationship. Human capital theory suggests that performance should improve over time, because employees accumulate job experience, which provides them with more knowledge, skills, and abilities to apply to their work. In contrast, motivation and job design theories suggest that greater time in a role reduces employee motivation and engagement, resulting in poorer performance. Here, we will examine some findings on the connection between tenure and performance, with an emphasis on job tenure, and apply these conclusions to the unique circumstances of the oil and gas industry.