It's more than wages: Analysis of the impact of internal labour markets on the quality of jobs

Abstract

paper reports on a study of how internal labor markets, operating in a multi-national hotel chain, may impact on workers in traditionally low paid jobs. The quality of jobs has been linked to pay, with lower paid jobs tending to be regarded as being of lower quality. The study examines the effect of three main dimensions of internal labor markets: job security, training, and opportunities for advancement; on the key organizational outcomes of job satisfaction, organizational commitment and intention to leave. A range of human resource management actions in the operation of the hotel's internal labor market are discussed. Data from a world-wide organizational survey are analyzed in order to examine the links between the internal labor market variables and the key organizational outcomes. The paper concludes that the operation of an internal labor market, underpinned by effective human resource policies and actions, leads to improved quality of jobs as measured by increased job satisfaction and organizational commitment, together with reduced intention to leave.