Why is there fast-track promotion?

This thesis seeks an explanation for the existence of corporate "fast tracks". Part One surveys four existing fast track models from the literature. In tournament theory, fast tracks have been viewed as a response to the adverse selection problem. In models where the firm uses junior positions for on-the-job screening, they may be a possibility permitted by a particular technology. Alternatively, they may arise from the signalling engaged in by workers when there is asymmetric information. Finally, they can be used as a way of overcoming a lack of precise information on worker ability.In the second part of the thesis an alternative explanation is proposed. A firm is considered to consist of two levels: production workers and managerial workers. If a worker is an able manager, the firm will lose valuable production time by slow promotion. However, slower promotion allows more information to be revealed for a given expenditure. Different track lengths are created depending on the firm's initial assessment of managerial competence