Empirical Analysis of Up-or-Out Rules for Promotion Policies
Washburn University. School of Business
Kaw Valley Bank
Results suggest that certain up-or-out models are valid even when the firm does not have such a policy, and shows that using this procedure as a basis for the estimation procedure predicts the promotion and exit survival rates as well as a Cox regression. Using data from a single firm, survival rates are computed using both a Cox regression and an up-or-out regression model. Since the firm does not have an explicit nor implicit up-or-out policy, Cox regression would typically be estimated to determine the survival rates. The results suggest that a model general technique may be appropriate.