1

1

RECRUITMENT, SELECTION, AND INTERNAL LABOUR

MARKETS – EVIDENCE FROM THREE DIVISIONS OF AN

INTERNATIONAL INVESTMENT BANK

DR CAROL ROYAL School of Industrial Relations & Organisational Behaviour

University of New South Wales SYDNEY NSW 2052

Australia

Abstract

This paper is part of a wider study that seeks to ascertain the types of internal and external labour

market practices and the extent to which labour market arrangements vary between three divisions

of the Australian and New Zealand affiliate of an international investment banking institution,

BZW/ABN AMRO. Building on earlier work of Althauser and Kalleberg (1981, 1989), this research

explores the workings of the internal and external labour market by adopting an integrative

internal labour market framework that goes beyond the three-featured model espoused by

Althauser and Kalleberg (1981, 1989) and that emphasises recruitment rather than selection

criteria. However, this paper will elaborate on the organisation’s recruitment and selection policy

and practices. More specifically, by adopting an internal labour market construct the paper will

seek to analyse the recruitment and selection practices in the three divisions of the international

investment banking affiliate and it will ascertain the importance of selection criteria for

differentiating internal labour market types. It will also highlight how these practices vary from the

perceptions held by both management and employees and from the ideal types outlined in the

typology. The paper concludes by emphasising the significance of expanding the internal labour

market typology to include selection criteria for the purpose of differentiating labour market types

in an international investment banking institution.

2

2

INTRODUCTION

Internal Labour Market Framework

Internal labour markets refer to the institutional rules and procedures such as recruitment, training

and the price of labour, which govern the employment relationship, in contrast to the external

labour market, where such decisions are controlled directly by economic variables. The internal

labour market represents, as Osterman (1984a: 19) states, a ‘structured pattern of interaction or

behaviour that persists over time and which is subject to changes’.

There have been a number of basic approaches toward the internal labour market framework.

However, Osterman (1987) suggests that none of these help to explain the variation and change in

contemporary internal labour markets. Osterman (1984b: 166) implies that it is inappropriate to

assume that a given enterprise has one internal labour market when in reality most companies have

several different internal labour markets, each of which operates with different procedures and

rules.

Althauser and Kalleberg (1981; 1989a) stress the importance of a framework that differentiates

internal labour market types. In their research (1981: 12; 1989: 151), they identify the existence of

several types of internal labour markets which they believe are unlikely to have the same origins

and consequences; therefore a definition of an internal labour market ‘specifying precisely what

features all kinds of ILMs have in common and what features are unique to each type’ is required.

They state (1981: 130) that the three basic structural features that different types of internal labour

markets have in common are, ‘firstly a job ladder, secondly entry only at the bottom and thirdly

movement up the ladder, which is associated with a progressive development of knowledge or

skill’. If there is a lack of one of the three basic characteristics then it is considered to be an

external labour market or an occupational labour market. Althauser and Kalleberg (1981: 130)

importantly distinguish between two types of internal labour markets: a firm internal labour market

(FILM) and an occupational internal labour market (OILM). Both share the three structural features

but operate in distinctive ways that reflect their fundamental difference. These will be addressed in

the next section.

Outside of Althauser and Kalleberg’s (1981) work, deficiencies in the literature suggest that other

human resources features/ indicators need to be considered in more detail when differentiating

internal labour market types. These include Selection Criteria, Rewards, Professional Identity and

Occupational Organisation. A expanded typology was developed that encompassed Althauser and

Kalleberg’s three defining structural features and also included these other human resource features

or indicators. The subject of this paper, however, is to compare the recruitment and selection

3

3

practices between three divisions of an investment bank and to determine the extent to which these

practices or arrangements vary from the ideal types specified by the Recruitment Indicator as

shown in Table 1.

Table 1 Recruitment Indicator

ILM–HR Indicator

Organisation/Firm Internal Labour Market (FILM)

Occupational Internal Labour Market (OILM)

Occupational Labour Market (OLM)

Recruitment

• Basis of Entry at the bottom, thereafter internal. Confined to a single organisation

Entry at the bottom and at higher levels, across several organisations in the same or associated occupations.

External; there are no differentiating levels.

• Criteria Dependability, loyalty and commitment to organisation’s goals. Workers are role takers and need to become thoroughly familiar with the rules, norms and work procedures.

Qualifications, experience, teamwork skills, access to networks, interpersonal skills, eg motivation, innovation, creativity.

Experience, interpersonal skills, dependability and conformity to established norms. Seniority-rights according to duration of time in the market, often govern access to jobs.

Research Methodology

A lack of detailed studies seeking to differentiate labour market types led to the examination of

internal labour market structures in three divisions – Equities, Futures and Structural Finance – of

the local affiliate of BZW/ABN AMRO.

This paper concerns itself with only one of the three of Althauser and Kalleberg’s defining

structural features, the Recruitment Indicator, and not the other two, the Training and Careers

Opportunities Indicators. Therefore it is not possible to ascertain what types of labour market

structures prevail in the three divisions of the bank. However, by examining the findings pertaining

to the Recruitment Indicator this paper will demonstrate the importance of expanding the typology

to include the selection criteria for differentiating internal labour market structures. It will also

highlight how these practices vary from the perceptions held by both management and employees

and from the ideal recruitment indicator types outlined in the typology.

Table 1 shows that the fundamental difference between the two internal labour market types is the

basis of recruitment and the specific selection criteria pertaining to these labour market types. The

typology defines the basis for recruitment for the firm internal labour market type to be entry at the

bottom, promotion thereafter being internal. Firm internal labour markets are confined to a single

employer, although they do not necessarily embrace all jobs in a firm (Althauser and Kalleberg,

4

4

1981: 131). The selection criteria include (but are not limited to) dependability, loyalty and

commitment to the organisation’s goals. Employees are generally role-takers and need to become

thoroughly familiar with the rules, norms and work procedures of the firm.

The entry point for an occupational internal labour market incumbent can be at the bottom. It is

important to note, however, that occupational internal labour markets exist for incumbents of one or

more associated occupations, and are not necessarily confined to a single employer (Althauser and

Kalleberg, 1981: 131), hence the typology has defined the basis of recruitment as entry at the

bottom and at higher levels. The selection criteria include, but are not limited to, qualifications,

experience, interpersonal skills, teamwork, creativity, tacit knowledge, motivation, loyalty, access

to networks and organisational congruence.

The external labour market or occupational labour market differentiates itself in terms of the basis

of recruitment by hiring externally. The typology indicates that there are no differentiating levels.

Movement between jobs in the market , therefore, is how incumbents in the external market operate

(Althauser and Kalleberg, 1981: 134). The selection criteria detailed in the typology include

dependability and conformity to established norms. Seniority rights according to duration of time in

the market often govern access to jobs.

With respect to the Recruitment indicator, it is important to recognise that the work of Althauser

and Kalleberg (1981: 130, 131) is primarily concerned with the basis of recruitment, but not with

the selection criteria. In this study, evidence of key selection criteria has been found from various

sources to be extremely important in the recruitment and selection process. A two-thirds majority

weighting is required in order to consider whether the recruitment indicator pertaining to a labour

market type predominates in any of the three divisions. Whilst this figure is arbitrary, on balance it

was seen to be an appropriate measure.

Given the theoretical paradigms, it was determined that the typology was best applied by selecting

the case study approach. This study distinguishes itself from other research in this field, which

analysed the internalisation of human resource policies and practices across a wide variety of

organisations. Most of these studies used a large number of organisations spread across a variety of

industry groups, with manufacturing being over-represented (Baron, Davis-Blake and Bielby, 1986;

Bridges and Villemez, 1994; Cappelli, 1995; Osterman, 1994a, 1994b, 1994c; Pfeffer and Cohen,

1984; and Windolf, 1986) . Nearly all of them, except Pfeffer and Cohen, used employer/employee

surveys as the preferred methodology. These studies did little to differentiate internal labour market

types, suggesting that a fair degree of uncertainty remains as to how well scholars’ explanations

about the internalisation of human resource policies and practices correspond to actual

organisations.

5

5

This particular case study analyses human resource practices at the head office of the Australian

and New Zealand operation of a global investment bank, where access on the whole is denied. This

approach provides for a more detailed account of internal labour market types, particularly in the

white-collar service area, one which Osterman (1994a) and Bills (1987) stress is still in need of

further research. Hence a single case study such as this one is both explanatory and revelatory by

nature.

Research techniques used to compare the recruitment practices in the three divisions were

interviews supplemented by a survey questionnaire, human resource database information, records,

documents, and oral company histories as well as organisational and industry histories obtained

from the Human Resource department and the business library at the local affiliate. A combination

of these techniques was instrumental for understanding human resource practices such as

recruitment and selection within the Sydney operation. In particular a Career Map, comprising the

data from the Human Resource Workforce Database and the employee survey personal cover sheet,

has been used extensively through out this paper. However, sometimes the Human Resource

Workforce Database was referred to separately because it contained data that was useful to the

analysis but outside the realms of the employee survey.

At the commencement of this study, in June 1996, the head office for the Australian and New

Zealand operations of the global investment bank Barclays De Zoete Wedd (BZW), a division of

Barclays PLC was being studied. The affiliate was responsible for wholesale banking, securities

dealing and investment banking services, and employed some 550 people. By March 1998, some

eighteen months into the investigation, the British parent, Barclays PLC, sold the global investment

banking operation, with exception of its Australian and New Zealand operations, to another global

investment banking group, CS First Boston. Both the Australian and New Zealand operations were

permitted by the British parent to organise the sale of their operations, and on the 1st March 1998,

the Sydney affiliate, being the head office for both Australia and New Zealand, orchestrated a sale

of both operations to the Dutch Bank ABN AMRO. At that time ABN AMRO employed 320

people; its role was to provide integrated investment banking and wholesale banking services. As a

result of the sale, it now employs some 757 employees in the Sydney affiliate alone. Whilst

predominantly focusing on the former British investment bank, BZW Sydney, the study does

incorporate ABN AMRO Sydney in the research process; hence for the purposes of the study the

bank was called BZW/ABN AMRO.

The Three Divisions: Structured Finance, Equities and Futures

The role of an investment bank is often viewed in terms of the financial instruments and the

financial markets through which these instruments are sold. These markets are often categorised as

6

6

the primary and secondary markets. The primary market is a market ‘in which the flow of funds

between borrowers and lenders is direct. The distinguishing characteristic of primary market

transactions is that they create new financial securities’ (McGrath and Viney, 1997: 10). The

secondary market ‘deals in existing financial instruments, and the flow of funds is conducted

through a financial intermediary’ (McGrath and Viney, 1997: 10, 11). The three divisions of the

bank can be considered in terms of the categorisation described above. The Structured Finance

division belongs to the primary market. The Equities division has a dual role, providing both

primary and secondary market functions, and the Futures division belongs to the secondary market.

The Structured Finance and Project Advisory business concerns itself with ‘the financing

arrangements, where the funds are made available for a specific purpose (the project), with the loan

repayments geared to the project’s cashflow,’ (Carew, 1996: 265) ‘rather than the balance sheets

and financial positions of the project sponsors (project originators)’ (McGrath and Viney, 1997:

236). Structured Financiers are often leading arrangers and underwriters of complex transactions

across a broad spectrum of industries, including the natural resources, utilities and infrastructure

sectors. Typical projects include roads, railways, gas pipelines, processing plants, mines, oil fields,

telecommunications and power. Given the size of the undertakings, most projects are jointly owned

and controlled.

Structured Finance became a particularly prominent financing vehicle for the development of

mineral projects during the resources boom of the late 1970s and early 1980s. As economies

improved both locally and internationally there was an increasing need for innovative financing and

for highly specialised management and participation in each project:

Technical expertise is required by the lending syndicate to assess the potential productive

capacity of the project, the length of the development period before a positive cash flow

can be expected, and to establish appropriate guarantees from other participating parties

(McGrath and Viney, 1997: 239).

Staff who are specialists in engineering, accounting, business, legal and actuarial fields are

organised into team-based arrangements determined by the nature of the project concerned. Whilst

the technical expertise of the Structured Finance staff is essential for the success of the project,

other divisions of an investment bank are also required to see the project through to completion. By

way of example, the giving of advice and the structuring and funding of a power station by the

Structured Finance division would also involve teams from the Corporate Finance (primary

markets), Debt Capital Markets (primary markets), and Treasury and Fixed Income divisions. Their

technical expertise would bring a great deal to the formation and management of the project.

7

7

Overall, the increasing trend towards financing solutions that integrate project advice and finance

requires professionals with a consistent record of providing specialist services. Matrix teams that

deliver the expertise and experience are necessary to bring the projects from the ideas stage to the

completed transaction. The scale of the projects dictates the involvement of staff with proven skills

and experience and integrated product capabilities.

The Equities business of an investment bank is a place where financial assets are bought and sold.

The traditional picture of how shares are bought and sold changed dramatically in the 1990s. The

crowded floor full of jostling traders, frantically yelling buy and sell orders to the ‘chalkies’ who

recorded them on large boards that listed all the companies whose shares were quoted on the

exchange, has been replaced by an electronic trading system (McGrath and Viney, 1997: 101, 107).

With the advent of the Stock Exchange Automated Trading System, both the nature of work and the

way it is organised have also changed. Electronic trading systems have allowed brokers to execute

the orders of their clients from their offices. There has been a great improvement in speed,

efficiency and in the dissemination of information to market participants. The cost of trading is

substantially lower than the traditional exchanges, and electronic mechanisms have overcome the

problems associated with all brokers having to congregate in the same place (The Economist, 30

January 1999: 75). Brokers are now able to ‘constantly monitor the market in various shares, enter

bids and offers for automatic execution, and monitor any outstanding orders and adjust them if

necessary’ (McGrath and Viney, 1997: 101).

Given the increase in stock market participation, the availability of electronic information and the

increasing sophistication of main institutional market participants, the nature of the work in

Equities has now become more specialised and more complex. As a result, technical experts are

needed to provide leading-edge research, involving analysis and interpretation of statistics, events

and market movements. To be able to manage the volume of business, and to provide institutional

and private clients with leading-edge research and equity and equity-derivative execution, the role

of the equity specialist has been divided into six job categories that previously constituted one or

two categories under the traditional equities trading system. These job categories are operators,

account/sales, sales traders, private Client Advisors, equity derivatives and equity research. Staff

who are specialists in accounting, economics, business, statistics, actuarial studies and engineering

prevail in the division.

One of the major challenges for the Equities industry will be the ability to maintain market share.

There was more than $US 640 billion worth of takeovers in the world financial services industry in

the fifteen months to April 1998. Eight of the top ten Australian brokers are now foreign-owned,

and the top seven account for sixty per cent of the daily trades on the Australian Stock Exchange

8

8

(The Weekend Australian Financial Review, 11–12 April 1998: 24). A recent confidential survey

commissioned by the Financial Products Research Group, 1998 – a survey of stockbrokers –

indicates that the top five stockbrokers’ share of the Australian agency broking business increased

from forty-two to fifty per cent in the previous year alone. Seventy-three of the small brokers have

to compete for just four per cent of the Australian institutional sharemarket. Equity specialists will

need experience and increasingly sophisticated technical skills to understand the needs and

objectives of both local and, increasingly, international investors (Australian Financial Review, 8

December 1998: 5).

The concern of the Futures division of an investment bank is trading in commodity or financial

futures contracts. A futures market involves the buying and selling of contracts for delivery of a

particular commodity or asset at a specified date and price (Bennett, 1993: 160). Commodities

include such things as gold, silver, copper and zinc. Agricultural commodities include such

products as wool, cotton, wheat and coffee, although this list is not exhaustive. In addition to the

commodities, and of greater importance, are the contracts based on financial instruments, including

interest rates, bank bills and the share price index. These financial instruments have gained

prominence over some commodity contracts, which have substantially reduced in trading volume

over the past couple of decades. There are three categories of market participants in the Futures

Market: hedgers, speculators and traders. The hedgers use the market to ‘compensate in one market

for potential losses in another’ (Bennett, 1993: 160). In addition to hedgers, ‘who use futures

markets in an attempt to reduce risk’, speculators attempt to make a profit by purposely taking

risks. Traders are the third group and they are considered a special class of speculators who operate

directly on the floor of the exchange, trading on very short changes in the prices of the contracts in

their portfolio. Traders who are prepared to buy or sell when prices move intraday add liquidity to

the market. This is a valuable function in the operation of the exchange (McGrath and Viney, 1997:

434, 435).

Whilst financial futures have a recent origin, with the Sydney Futures Exchange diversifying into

financial futures in October 1979, Futures markets in a broader sense have existed for centuries. In

November 1989, technological advances led to the introduction and expansion of SYCOM (the

Sydney Computerised Market), an after-hours automated screen-dealing system to enable twenty-

four-hour global trading (Carew, 1996: 269). Despite this, day work still continues to be organised

around the Sydney Futures Exchange, where the open outcry system is still used. The Futures

division of an investment bank tries to position itself as a leading executing and clearing broker on

the Sydney Futures Exchange and on all major futures exchanges, whether open outcry or

electronic. Technical specialists, including account managers and execution staff, develop close

working relationships with clients. Fundamental requirements of the technical specialists are a high

9

9

degree of expertise, dedication, agility and speed to provide up-to-the-minute insights into the latest

developments, as well as vital intelligence and local news, all of which are essential in the fast-

moving world of global futures trading. Of more recent times, the Futures industry has attracted

agricultural, accounting, economics and business professionals. With the advent of electronic

trading in the next few years, the nature of work will require an increasing number of professionals

in order to gain competitive advantage.

FINDINGS

Recruitment Policy And Practice

BZW/ABN AMRO’s recruitment policy advocates internal recruitment before sourcing externally.

Non-executive and junior executive vacancies are advertised internally either by notice boards,

newsletter or informal networks. For internal candidates the selection process may involve a couple

of interviews. Alternatively, search and selection assignments may be used to select suitable staff.

External applicants may undergo three or more interview rounds depending on the seniority of the

position.

A range of psychological tests is an important part of the selection process, and candidates,

particularly external, go through this process before any final decisions are made. These tests assess

conceptual reasoning, numerical critical reasoning, verbal reasoning, and personality profiles. They

play some role in assisting management when selecting staff, but qualifications and experience are

considered to be much more important, especially nowadays when the culling process for most

divisions begins by weeding out those applicants without qualifications.

Equities

The Basis of Recruitment – The First Defining Structural Feature of Internal Labour Markets, and

Selection Criteria

Interviews revealed management’s perceptions of the basis of recruitment to be that about seventy

percent of Equity recruits typically have a few years’ experience, working for other organisations in

the industry. External recruitment occurs at higher levels if no suitable candidate can be found

internally, and also when ‘new blood’ needs to be injected into the division; this occurs in about

thirty per cent of cases. There is a preference for recruiting internally at junior levels as a means of

ensuring the future commitment of employees.

The Career Map findings were quite consistent with management’s perceptions, indicating that

seventy per cent of Equities staff have joined the organisation after having had previous experience

10

10

with two to three organisations in the same profession. The Career Map also reveals that another

group, accounting for fifteen per cent, have entered the division at the bottom, essentially joining

the organisation as junior trainees and progressing up the career ladder. For the remaining fifteen

per cent entry is external; there are no differentiating levels.

The importance of the selection criteria, as indicated by the Recruitment indicator in the typology,

was also stressed by the Human Resource department. There is a general tendency to adopt internal

recruitment strategies at the junior entry level. Jobs in Equities, particularly at the junior level,

attract many prospective candidates both internally, for example from the back office, and, more

significantly, externally. Every effort is made to offer positions internally first. If a vacancy is not

filled internally, an external candidate is sought.

Although the organisation placed a great deal of importance on qualifications and experience, other

key criteria were interpersonal skills, organisational congruence, creativity, commitment,

dependability and cultural fit. It is still possible for a person with no formal qualifications to work

his or her way up from the back room into Equities, but this is much rarer than it once was. The

Director of Equities and the Human Resources Consultant both confirmed the selection criteria,

stating that experience and good people skills were central to all positions in the Equities division.

Data from the Human Resource Department Workforce Databases confirmed just how important

qualifications are as a selection criterion. The data indicated that seventy per cent of all core

positions across the five different job categories in Equities have occupants with at least one formal

qualification. The minimum acceptable qualification is an industry certificate in applied finance

offered by the industry body. Those people who are recruited without formal qualifications are

required to enrol in this certificate within six months of joining the organisation. Nineteen per cent

of the Equities staff are educated only to the end of secondary school. They occupy junior level

positions, and it is becoming harder to enter the occupation with only this level of education.

Approximately seventeen per cent of people in Equities have postgraduate degrees, and around

thirteen per cent have a postgraduate diploma qualification. The Research division employees are

seen to be the elite of the Equities business in terms of status, knowledge base and intellect, with

ninety-three per cent of the people there having an undergraduate qualification, and thirty-six per

cent a postgraduate degree. Close to fifteen per cent of the Equities research people have other

postgraduate qualifications. Company evidence indicates that over the last three to four years,

relevant postgraduate qualifications of some kind have become standard criteria for ninety-five per

cent of new Equities research positions.

11

11

Interestingly, employees’ perceptions as to the importance of various selection criteria were quite

different from those used by the Human Resource division in the selection process outlined above.

In answering question 2(c) of the employee survey questionnaire, which asked ‘What do you regard

as the most important selection criteria for your job?’, thirty-five per cent of respondents from

Equities saw experience to be the single most important criterion, and the second, third and fourth

most important were intellectual knowledge, twenty-four per cent, interpersonal skills, fifteen per

cent, and motivation, eleven per cent. Contrary to the management and human resource interview

data on selection criteria, respondents in Equities did not perceive qualifications to be an important

selection criterion. Only three per cent of respondents marked it as number one in order of

importance, and only eight per cent ranked it to be number two in importance. However, there was

some consistency between the occupational personality tests used by management in the selection

process and the third and fourth-ranked criteria by employees, that is, interpersonal skills and

motivation.

Analysis of the finding suggests that there is agreement between the Director of Equities and the

Career Map regarding the basis of recruitment. The Director of Equities believed, and the Career

Map indicated, that about seventy per cent of people who are recruited in Equities have spent a

number of years working with other organisations in the industry before joining BZW/ABN

AMRO, and that external recruitment occurs at higher levels if there is no suitable person or if

there is a need to inject ‘new blood’. As noted earlier in this paper, it was determined in terms of

the recruitment indicator that the weighting for any one particular labour market type is a two-

thirds majority. Hence, the evidence suggests that the basis of recruitment is consistent with the

definition of an occupational internal labour market type posited by Althauser and Kalleberg (1981:

130) and depicted in Table 1.

However, unlike the management interview data, the Career Map reveals that the two smaller

groups, constituting fifteen per cent each, show differences in the basis of recruitment. For one of

these groups, and the basis of recruitment is consistent with the firm internal labour market type,

whilst that for the other group is consistent with the occupational labour market (refer Table 1).

In terms of the first of Althauser and Kalleberg’s (1981) defining structural features, strong

evidence suggests that for seventy per cent of the people in Equities the basis for recruitment

reflects the occupational internal labour market highlighted in the typology. However, both the

Director of Equities and the Human Resource Management Consultant have increasingly adopted

internal recruitment strategies similar to those characteristic of the firm internal labour market type

whereby more positions have been made available at the junior level as a means of ensuring the

12

12

future commitment of key employees. This represents a variation from the ideal occupational

internal labour market recruitment strategies that have tended to predominate.

Although the selection criteria are not crucial to Althauser and Kalleberg’s (1981: 130, 131)

analysis, it has been established that they have been valuable in identifying various labour market

types. Interview data with management and the human resource staff as well as data obtained from

the Human Resource Workforce Database indicate that qualifications have been extremely

important in the recruitment and selection process. The importance of qualifications is evident from

the Human Resource Databases, which show that seventy per cent of respondents, or fifty-two out

of seventy people from Equities, have degree-level qualifications, and thirty-six per cent have a

postgraduate degree or postgraduate diploma. Only nineteen per cent of respondents’ highest level

of formal education is the Higher School Certificate. These people occupy very junior positions and

it is becoming harder to enter the field with this level of attainment. The data collected from

interviews with management and the Human Resource division indicates that other key criteria in

the selection process are experience, interpersonal skills, teamwork, tacit knowledge, creativity,

motivation and organisational congruence. Turning to the typology, these criteria are more closely

aligned with the characteristics of the occupational internal labour market type (refer Table 1).

Structured Finance

The Basis of Recruitment – the First Defining Structural Feature of Internal Labour Markets and

the Selection Criteria

The Director of Structured Finance perceived that the basis of recruitment in his division is

predominantly at the bottom of the ladder, with internal promotion after that. In 1995 two thirds of

the people in Structured Finance had come from the former Barclays banking operation in Sydney,

and although the bank was small, two thirds of the Structured Finance group had been together for

fifteen years and had only worked for the Barclays organisation.

The Director of Structured Finance supported this approach to recruitment because it had been

successful in delivering the type of person who is comfortable working in a team. He did, however,

acknowledge that there were some people in his unit who had been recruited at higher levels to fill

middle to upper management positions after having worked in one or two other companies in the

same or similar occupations.

The Career Map findings are only consistent in part with these management perceptions, revealing

that seventy-six per cent of people in Structured Finance had joined the organisation after having

had previous experience with two to three organisations in the same profession. It also revealed that

13

13

a much smaller group than management had assumed – twenty-four per cent of people in Structured

Finance – entered the division at the bottom of the ladder, essentially joining the organisation as

trainees and gradually progressing to more senior positions. They have therefore only worked for

the one organisation, the current one.

A number of key selection criteria are used when selecting candidates for Structured Finance

positions, and it is important to view these in light of those criteria highlighted in the typology.

Fifteen years ago, extensive qualifications were not necessary to enter this division. Essentially the

entry point was at the bottom as a junior; nowadays qualifications, experience, the ability to work

in teams, and tacit knowledge are all important.

The Director of Structured Finance had some other interesting insights about the criteria used in the

selection process. The Structured Finance division, whilst an integral part of the organisation,

belongs to the elite origination side or primary markets side of the investment bank. The origination

side is based on fee-for-service rather than commission-based business. Fee-for-service business

requires people who have a reputation in the industry and preferably able to access networks. Two

of the most important attributes are good client relationships and the ability to offer innovative

advice and products, both of which are considered very important selection criteria for generating

deals.

The Human Resource Director stated that the foremost selection criterion was qualifications,

particularly from the best academic institutions. Structured Finance is less rigorous about this

criterion than other origination divisions are, but still considers it important to try to obtain highly

credentialed people from the best academic institutions. Applicants without qualifications are

culled out of the process. Other key selection criteria include experience and the ability to work in

teams because that is how most work is conducted. Outstanding people, who are highly motivated,

creative, and able to apply tacit knowledge to complex business deals, fit well with the Structured

Finance culture and work ethic. Psychometric testing is often seen as a valuable indicator of a

candidate’s orientation in this regard.

Once again, as with the Equities division, the Human Resource Department Workforce Database

confirmed just how important qualifications are as selection criteria in the recruitment process for

positions in Structured Finance. The database indicates that eighty-eight per cent of people have at

least one formal qualification. Approximately forty-four per cent of people have a Masters Degree,

and seventeen per cent have a postgraduate qualification, the Graduate Diploma of Applied

Finance, from the Securities Institute of Australia. A further six per cent have other types of

postgraduate qualifications.

14

14

Again, employees’ perceptions as to the importance of various selection criteria were quite

different from those used by management and the Human Resource division in the selection

process outlined above. As with Equities, responses to question 2(c) of the employee survey

questionnaire, ‘What do you regard as the most important selection criteria for your job?’,

indicated that fifty-six per cent saw experience to be the single most important criterion; the

second and third most important were interpersonal skills (twenty-two per cent), and intellectual

knowledge (seventeen per cent). Contrary to the management interview data and data extracted

from the Human Resource Workforce Database, six per cent of people saw qualifications to be

only the fourth most important criterion.

Here, analysis of the data suggests some differences between the Director of Structured Finance

and the Career Map in terms of the basis of recruitment. With reference to the basis of recruitment,

a detailed interview with the Director of Structured Finance (October 1997) reveals management’s

perception that two thirds of the people in the division have been recruited at the bottom of the

ladder, initially occupying junior level positions, and have been internally promoted thereafter. The

same percentage of people in the division have worked for only the one organisation, Barclays

(BZW). The Director of Structured Finance did, however, acknowledge that there were some

employees with experience from one or more organisations in the same or similar fields, who had

entered the division at higher levels, occupying middle to upper management positions.

Contrary to management’s beliefs, the Career Map reveals that seventy-six per cent of the people

had joined Structured Finance after having had previous experience with two to three organisations

in the same profession. The Career Map also revealed that another group, comprising twenty-four

per cent of people in Structured Finance, entered the division at the bottom of the ladder, occupying

junior entry level positions. These people exhibit firm internal labour market tendencies as shown

in Table 1. It is clear that for seventy-six per cent of Structured Finance, well above the two-thirds

majority needed to determine the existence of a labour market type, the basis for recruitment is

consistent with the occupational internal labour market type as defined by the typology and shown

in Table 1.

However, as with Equities, the Director of Structured Finance has increasingly adopted internal

recruitment strategies similar to those characteristic of the firm internal labour market type,

whereby more positions have been made available at the junior level as a means of ensuring the

future commitment of key employees. This represents a variation form the ideal occupational

internal labour market recruitment strategies that have tended to predominate.

Interviews with management and the Human Resource Director (August 1997) indicate that

qualifications, experience, the ability to work in teams, interpersonal skills, access to networks,

15

15

tacit knowledge and creativity are used as selection tools in the process. Highlighting the

importance of qualifications as a selection criterion, the Human Resource Department Database

shows that eighty-eight per cent of people have a one-degree qualification. Approximately forty-

four per cent of people have a postgraduate qualification. Given the amount of degree-qualified

people, it suggests that management and the Human Resource division do in fact extensively use

qualifications as a selection tool in the culling process. Turning to the typology, it can be said that

these criteria are closely aligned with the characteristics of the occupational internal labour market

type also shown in Table 1.

In summary, the findings were similar to those in Equities: in terms of Althauser and Kalleberg’s

(1981) first defining structural feature, the basis of recruitment, whilst there is evidence of a

smaller group (twenty-four per cent) of people in Structured Finance who exhibit firm internal

labour market practices, there is much stronger evidence indicating that for seventy-six per cent of

people in Structured Finance the basis of recruitment reflects the occupational internal labour

market type detailed in the typology. Finally it is important to note that selection criteria are

significant in the process of labour market differentiation.

Futures

The Basis of Recruitment – The First Defining Structural Feature of Internal Labour Markets and

the Selection Criteria

The Chief Executive of Futures indicated that the basis of recruitment is predominantly at the

junior level entry point, which has traditionally involved candidates initially being chosen to work

in the mail room or the back office area and then transferring to the Futures unit, where they

receive considerable on-the-job training. Armed with the necessary experience, there is the

potential for these recruits to become successful traders and dealers in a two to three-year period.

They also need to complete a small certification exam accredited by the Futures Exchange. The

other basis for entry is externally, through the trading floor of the Futures Exchange. Periodically, a

Futures trader or dealer from another firm would be tapped on the shoulder on the trading floor, to

determine whether they would consider moving to rival competitor. People entering in this manner

usually have some experience in a particular product, be it commodities or financial instruments; as

a result of their experience, they occupy middle to senior level positions when joining the company.

The Futures division rarely needs to advertise for new recruits.

The Chief Executive of Futures stressed his preference to continue with the internal recruitment

strategy, because junior level recruits are generally comparatively cheap and often have a better

16

16

psychological approach to the profession, viewing their positions as an entry to an interesting and

rewarding career.

The Career Map is only partly consistent with these management perceptions. In terms of the basis

of recruitment, the Career Map revealed that sixty-seven per cent of people in Futures have joined

the organisation having worked for an average of three, four or five organisations in the same

occupation over an eleven-year period. Entry is external and there are no differentiating levels.

They joined the organisation, therefore, as experienced traders, dealers or advisors. The Career

Map also revealed that there were two other groups. One accounted for fourteen per cent of the

people in Futures; these people had originally entered the division at the junior entry level. The

other accounted for nineteen per cent, who joined the organisation after having had previous

experience with two or three organisations in the same or associated occupations.

Once again, as for Equities and Structured Finance, it is important to view the selection criteria in

light of those specified in the typology. Whilst, historically, the need for qualifications was not seen

to be essential, of more recent times, the Futures industry is seeking to establish a minimum

standard of professionalism, that is, an undergraduate degree, especially given the advent of on-line

trading. The more technologically advanced the Futures industry becomes the greater the need to

update and also acquire new skill sets in order to do the job.

Other important selection criteria include experience, dependability and conformity to the rules and

regulations imposed by the Sydney Futures Exchange, which are becoming more stringent as to

norms within the industry. Interpersonal skills and team competencies are all necessary

prerequisites in making sure the work is carried out effectively.

The Chief Executive of Futures indicated that all positions require candidates to demonstrate an

identification with the Futures culture. Cultural fit, amongst other things, involves having a certain

amount of mental agility and physical stamina associated with being a trader or dealer. On trading

floors and in electronic dealing rooms, shouting, gesticulating and physical exuberance are

considered to be the normal way to behave and interact. Cultural fit requires more than possessing

the right skill set or personality traits; it requires an ability to be able to perform well in such an

environment. The trading floor provides the BZW/ABN AMRO organisation with the opportunity

to see first hand how effective other traders and dealers are. This assists in making an informed

decision about the suitability of the person they wish to approach.

The Human Resource Consultant confirmed that these selection criteria are the ones used in the

selection process. The relevant selection criteria are well known and are considered to be an

industry standard. However, the Human Resource Consultant states that the networks in the Futures

17

17

industry are extensive and deep, involving people who are all connected in some way, through

private school ties and/or sporting clubs. Given the networking opportunity made available to the

organisation by the open outcry trading floor system, a recruitment campaign is never a long drawn

out process, and there is little need for advertisements or recruitment agencies, making the

campaign inexpensive to run.

Data from the Human Resource Department Workforce Database confirmed the extent of degree-

qualified people. In terms of the main source and the nature of training, it showed that thirty-five

per cent of the people in Futures have an undergraduate degree. Ten per cent of people have

acquired a Technical and Further Education qualification in administration. The highest

qualification for the remaining fifty-five per cent was six years of secondary school (thirty-five per

cent) and four years of secondary school (twenty per cent). There were no postgraduate qualified

people in Futures. More recently, the minimum qualification has become the Certificate in

Financial Markets offered by the Securities Institute of Australia. The data sourced from the

Human Resource Workforce Database (1998) indicated that in the last ten years potential

candidates required a degree qualification (thirty-five per cent) to enter the Futures division.

However, the database also indicated that experience has been an important selection criterion,

with eighty-six per cent of people having worked at between two and five other futures brokers,

with the length of service at other organisations ranging from three to nine years, prior to joining

BZW/ABN AMRO. For the other fourteen per cent of people in Futures, experience was not an

important selection tool used in the process as they had joined the organisation at the junior entry

level.

Unlike the findings for Equities and the Structured Finance divisions, in general the perceptions of

Futures employees as to the importance of various selection criteria were consistent with those of

management and the Human Resource division and also with those used in the selection process.

Question 2(c) of the employee survey questionnaire asked respondents the following: ‘What do you

regard as the most important selection criteria, in order of importance?’. The findings in Futures

indicated that fifty-eight per cent of respondents believed experience to be the most important

criterion, and the second, third and fourth most important were interpersonal skills, sixteen per

cent, intellectual knowledge, eleven per cent, and motivation, five per cent. There were only five

per cent of respondents who ranked qualifications as second, not first, in order of importance.

Interestingly, respondents had not been aware of the change in more recent times to using

qualifications as a selection tool in Futures.

Hence, analysis of the findings presented here suggests that there are some differences between the

Chief Executive of Futures and the Career Map in terms of the basis of recruitment. An interview

18

18

with the Chief Executive of Futures highlighted management’s perceptions. According to him, the

basis for recruitment is predominantly at the junior entry level point. Historically, this has involved

recruiting juniors from the mailroom or back office area. The other basis for recruitment is external,

through extensive network arrangements made available through the trading floor of the Futures

Exchange. The Career Map, however, revealed that sixty-seven per cent of people in Futures (just

over a two-thirds majority) have joined the organisation having worked for an average of two to

five other futures brokers, with the length of service at other organisations ranging from three to

nineteen years. Entry is external and there are no differentiating levels. They have therefore joined

the organisation as experienced traders, dealers or advisors. In terms of the basis of recruitment

specified by the typology and shown in Table 1, this group is consistent with the occupational

labour market type. The Career Map also revealed two other groups. One of these groups accounted

for fourteen per cent of the people in Futures; these people had entered the division at the junior

entry level. The basis of recruitment closely mirrors the firm internal labour market type detailed in

the typology and also shown in Table 1. The other group accounted for nineteen per cent of the

people in Futures; they joined the organisation after having had previous experience with two to

three organisations in the same or associated occupations. Hence, the basis of recruitment for this

group is consistent with an occupational internal labour market, shown in Table 1.

Although the selection criteria are not recognised as being important to Althauser and Kalleberg’s

(1981: 130, 131) analysis, a triangulation of the data has been valuable in ascertaining whether

selection criteria can be associated with identification of various types. Findings from senior

management and the Human Resource Department indicated the importance of experience and

interpersonal skills in the selection process. In terms of experience, eighty-six per cent of people in

Futures had worked for two to five other futures brokers, with the length of service at other

organisations ranging from three to nineteen years. Thirty-five per cent of people have an

undergraduate degree, and this represents a change over the last ten years. The interview data

collected from management and the Human Resource division indicates that other key criteria in

the selection process include dependability, conformity to norms and regulations, and cultural fit.

This appears consistent with the occupational labour market (refer Table 1).

In summary, Futures differs from Equities and Structured Finance in terms of Althauser and

Kalleberg’s (1981) first defining feature, the basis of recruitment. There is much stronger evidence

which indicates that for sixty-seven per cent of people in Futures the basis of recruitment is

external and therefore reflects the occupational labour market.

19

19

An Analysis of the Findings: The Importance of Selection Criteria for Differentiating Internal

Labour Market Types, Recruitment and Selection Practices, and the Reasons why Management and

Employee Perceptions Vary from the Ideal Labour Market Types

Althauser and Kalleberg's (1981) first defining feature, the basis of recruitment, does not

necessarily make a clear distinction between those groups of employees where the basis of

recruitment predominantly reflects the occupational internal labour market, evident in the Equities

and Structured Finance divisions, from those who mirror the recruitment practices of the

occupational labour market or external labour market, evident in the Futures division, since both

markets (the OILM to a lesser extent) rely on the external labour market to fill positions. What is

clear from Althauser and Kalleberg's (1981) definition is that those groups that are closely aligned

to the occupational internal labour market recruitment practices found in both the Equities and

Structured Finance divisions have also climbed ladders across several organisations in the same or

associated occupations, whilst the data suggests that in Futures the dominant group are reflective of

the occupational labour market where there are no differentiation levels in organisations and hence

no opportunity to climb careers ladders.

Expanding the typology to include selection criteria has been fundamental in differentiating

internal labour market types, as this case has shown. An analysis of the findings suggests that

selection criteria heavily mirror different job characteristics of the predominant groups in the three

divisions.

Those job characteristics pertaining to the occupational internal labour market to which the

predominant groups from Equities and Structured Finance reflect require the application of

complex theoretical knowledge often associated with knowledge work. Knowledge and skills are

transferable, and are imparted through specialised institutions responsible for maintaining

standards. Learning and mastery of new skills are necessary and status and prestige are important.

These employees have a large amount of discretion over work processes and goal-setting. The work

is predominantly team-based, involving co-operation and the development of shared understandings

between specialists. The social context is important for realising employees’ intrinsic work. In

essence these people are occupational specialists.

Therefore, given the job characteristics highlighted above, the question remains how best to

distinguish between labour market types rather than to expand the typology to include selection

criteria, which are essentially modelled around different job characteristics necessary to perform

the work. When reflecting back on the Equities and Structured Finance divisions it was ascertained

that for those groups whose recruitment practices were reflective of the occupational internal

labour market there was heavy emphasis placed on qualifications from tertiary institutions (and in

20

20

the case of the Structured Finance group the best academic institutions) which strongly links with

the knowledge based, complex theoretical skills to needed to perform the job. The data also

indicated that previous experience is necessary to apply tacit knowledge, and that interpersonal

skills, cultural fit, organisational congruence, commitment and dependability were also important

for the way work is organised which as highlighted above is essentially along team-based lines.

However, this is quite different for the main group in the Futures division where the recruitment

practices are reflective of the occupational or external labour market. Referring to the job

characteristics pertaining to the occupational labour market which the predominant group in

Futures reflects, one finds that the occupation is defined by labour market requirements. A higher

level of conceptual rather than theoretical knowledge is required and a wide repertoire of social

skills, is necessary in undertaking work. Employees having mastered the competencies in the

Futures division, find that work often becomes routinised and competencies become transferable

across organisations. Occupational discretion over work processes is evident. Work is

individualised and not team-based. Complex relations with the client and the manager, are

fundamental to the nature of the work and employee performance. Hence, it is not surprising given

the job characteristics that prevail in Futures to find that the data highlighted experience, rather

than qualifications as a key selection criterion and seniority rights according to duration of time in

the market, often govern access to jobs. Other important criteria modelled around the job

characteristics required to perform the job, include, dependability and conformity to established

norms imposed by regulatory bodies, often leading to the routinisation of the nature of work that

prevails in the Futures division. Interpersonal and social skills are important in managing often

complex work relations.

Linking selection criteria with job characteristics has also been useful in differentiating those small

pockets within the three divisions where the recruitment practices have been reflective of the firm

internal labour market. The data indicated that there was evidence of positions that were well

defined and hierarchically ranked. Mainly contextual job-specific knowledge was required and

work was often seen to be routinised and uncreative accompanied by management guidelines which

circumscribe employee discretion. There was also evidence of a strong amount of technical control

and skills and knowledge were generally accrued informally and tended to be firm specific. Work

was often individualised and there was little co-worker or customer relations until an employee had

reached a more senior level. Unlike the Occupational Internal and the Occupational Labour

markets, the basis of recruitment was at the bottom or junior level which is reflective of the firm

internal labour market. As the data indicated, it was not surprising then that selection criteria

specified to perform work of this type in each of the three divisions emphasised dependability and

commitment to the organisation's goals more than qualifications and experience. Creativity,

21

21

innovation and teamwork are not particularly important since employees are essentially role takers

and the emphasis is more on becoming familiar with work procedures and norms.

Now we turn to the ideal recruitment indicator types and why the recruitment and selection

practices and the selection criteria adopted in the three divisions vary from the perceptions and

beliefs held by both management and employees. The data presented indicated that differing

perceptions are likely to occur because an organisation such as BZW/ABN AMRO does not operate

in a vacuum and is therefore affected by recurring interrelated factors, such as changing internal

and external pressures. External pressures include the economic environment particularly the

resources and the supply and demand for skilled labour, as well as institutional, product market,

technological change and search, recruitment and salary costs. Whilst the internal pressures include

such elements as cultural factors, employment relations, costs associated with training and

development and career, performance management and reward systems, as well as workforce skills,

the need to secure commitment and insider- outsider relations.

Together these changing internal and external pressures influence managerial beliefs and

perceptions and those of employees with respeect to the exact nature of the recruitment and

selection practices and the way these practices are conducted. The data presented here indicated

that recurring interrelated factors, such as internal and external pressures and managerial and

employee beliefs and perceptions, mutually interact to shape management strategy, ultimately

resulting in the adoption of internalised labour market structures that continue to be appropriate to

BZW/ABN AMRO within its industry. However, given the nature and speed of change in the

investment banking industry in recent years, there was strong evidence that actual recruitment and

selection practices, and the selection criteria can vary often (though not always substantially) from

both managerial and employee beliefs and perceptions about these same practices and from those

specified by the ideal labour market types. A realignment tends to occur periodically when there are

detrimental external or internal pressures, such as the dramatic technological changes affecting the

Futures industry with the advent of screen trading necessitating the increasing importance of

tertiary qualifications as a selection criteria for those entering the industry.

CONCLUSION

In terms of Althauser and Kalleberg’s (1981: 130) first defining structural definition, ‘entry at the

bottom’, indicated as the basis for recruitment in the typology, it can be seen that a triangulation of

all data sources indicates that for the majority of people in both the Equities and Structured Finance

divisions the basis of recruitment is consistent with the definition of an occupational internal labour

market (refer Table 1). However, there is evidence of two smaller groups. In Equities, one of these

groups is consistent with the definition of a firm internal labour market, whilst the other is

22

22

consistent with the definition of an occupational labour market. There is also evidence of a small

group in Structured Finance, where the basis for recruitment is consistent with the definition of a

firm internal labour market. In contrast to both Equities and Structured Finance the combined data

sources indicate that the basis for recruitment in Futures is consistent with the occupational or

external labour market (shown in Table 1 above). There are also two other small groups in Futures.

For one of these groups the basis for recruitment is consistent with the firm internal labour market,

and for the other it is consistent with the occupational internal labour market type.

It is important to note that in all these divisions there has been the tendency to adopt recruitment

strategies characteristic of the firm internal labour market type whereby more positions have been

made available at the junior level as a means of ensuring the future commitment of employees. This

represents a variation from the recruitment strategies that have tended to predominate in these two

divisions.

An analysis of the findings suggests that expanding the typology to include selection criteria has

been fundamental in the process of differentiating internal labour market types. The evidence

presented in this paper indicates that selection criteria mirror different job characteristics of the

work performed in the three labour market types, and makes a clearer distinction between them,

particularly the occupational internal labour market and the occupational labour market types.

However, as mentioned on several occasions throughout this chapter, the selection criteria are not

one of the three defining structural features used to establish the existence of either a firm or

occupational internal labour market type or an occupational labour market type (Althauser and

Kalleberg, 1981: 130, 131). Therefore the selection criteria can be associated with each labour

market type, but not as a matter of definition. These criteria are highlighted in the typology. The

occupational internal labour market selection criteria espoused by the typology are the dominant

selection criteria used for all candidates in both Equities and Structured Finance, irrespective of the

labour market break-up in each of the divisions. The selection criteria for the Futures division have

been consistent with those of the dominant labour market type, the occupational labour market.

Unlike the findings for both the Equities and Structured Finance divisions, the employee survey

data for the Futures divisions is consistent with the other combined data sources, which indicate

that formal degree qualifications have not been an important selection criterion in the selection

process in the Futures division. This is consistent with the external or occupational labour market.

However, the combined data sources have also indicated an increasing trend towards formal degree

qualifications as a selection criterion in the recruitment process, and this is also indicative of the

broader changes to the Futures industry experienced in the last ten years. These changes were the

subject of discussion earlier in this paper.

23

23

Furthermore, it was ascertained that recruitment and selection practices and the selection criteria

adopted vary from the perceptions held by both management and employees about how such

criteria and practices evolve and change over time. They were also shown sometimes to vary

(though not always substantially) from those outlined in the typology. The data presented indicated

that the reason for this was changing and recurring interrelated factors, such as internal and external

pressures that influence managerial and employee perceptions, beliefs and strategies, ultimately

resulting in the adoption of internalised labour market structures that continue to be appropriate to

BZW/ABN AMRO within its industry.

Future in-depth case study research examining the workings of the internal labour market construct

is required in order to confirm the significance of recruitment and selection practices and in

particular selection criteria for differentiating labour market types in the investment banking

industry.

24

24

REFERENCES

Althauser, R. P. (1989a), ‘Internal Labour Markets’, Annual Review of Sociology 15: 143–161.

Althauser, R. P. and Kalleberg, A. L. (1981), ‘Firms, Occupations, and the Structure of Labor Markets: A Conceptual Analysis’, in I. Berg (ed), Sociological Perspectives on Labor Markets, Academic Press, New York, 119–149.

Baron, J., Davis–Blake, A. and Bielby, W. (1986), ‘The structure of opportunity: How promotion ladders vary within and among organizations’, Administrative Science Quarterly 31: 248–273.

Bennett, R. (1993), Applied Economics and Australian Business, 16th edition, M. M. and B. Book Company, Chatswood, Australia.

Bills, D. B. (1987), ‘Costs, Commitment and Rewards: Factors Influencing the Design and Implementation of Internal Labour Markets’, Administrative Science Quarterly 32: 2: 202–221.

Bridges, W. P. and Villemez, W. P. (1994), The Employment Relationship: Causes and Consequences of Modern Personnel Administration, Plenum Press, New York.

Cappelli, P. (1995), ‘Rethinking Employment’, British Journal of Industrial Relations 33: 4, December: 563-602.

Carew, E. (1996), The Language of Money 3, Allen & Unwin, Sydney.

McGrath, M. and Viney, C. (1997), Financial Institutions Instruments and Markets, McGraw–Hill, Australia.

Osterman, P. (1984a), ‘Introduction: The Nature and Importance of International Labour Markets’ in P. Osterman, ed., Internal Labor Markets, MIT Press, Cambridge, Mass.

Osterman, P., (1984b), ‘White Collar Internal Labour Markets’ in P. Osterman, ed., Internal Labor Markets, MIT Press, Cambridge, Mass.

Osterman, P. (1987), ‘Choice of Employment Systems in Internal Labor Markets’, Industrial Relations 26: 1: 46–67.

Osterman, P. (1994a), ‘How common is workplace transformation and how can we explain who does it?’, Industrial and Labor Relations Review 47: 2: 173–188.

Osterman, P. (1994b), ‘Supervision, Discretion, and Work Organization’ (Papers and Proceedings of the American Economic Association, Boston, MA, January 3–5, 1994),The American Economic Review, May, Vol. 84, No. 2, 380–384.

Osterman, P. (1994c), ‘Internal labor markets: Theory and change’, in C. Kerr and P. D. Stadohar (eds), Labor Economics and Industrial Relations: Markets and Institutions, Harvard University Press, Cambridge, Mass., 303–309.

Pfeffer, J. and Cohen, Y. (1984), ‘Determinants of Internal Labour Markets in Organisations’, Administrative Science Quarterly 29: 550–72.

25

25

Royal, C. (2000), ‘Internal Labour Markets and Human Resource Management in an International Investment Banking Institution: Deal Makers in the Global Economy”, PhD thesis, University of New South Wales.

Royal, C. (2000), ‘Internal Labour Markets – The Current Debate and a Theoretical Framework’, Working Paper Series, School of Industrial Relations & Organisational Behaviour, University of New South Wales.

The Australian Financial Review, Weekend, 11–12 April 1998: 24.

The Australian Financial Review, Tuesday 8 December 1998: 5.

Windolf, P. (1986), ‘Recruitment, Selection, and Internal Labour Markets in Britain and Germany’, Organization Studies, 7/Issue 3, Walter de Gruyter, New York, 235–254.