Labor markets and organizations: A screening theory of hiring networks and racially homogeneous employment

Abstract

This theoretical analysis uses three relationships between individual and organizational performance to help explain when organizations will use different labor markets to organize employment and when they will use different hiring networks. Granovetter's [Granovetter, M. (1973). The Strength of Weak Ties. American Journal of Sociology, 78, 1360–1381] distinctions about job seekers’ networks are combined with Jacobs’ [Jacobs, D. (1981). Towards a theory of mobility and behavior in organizations: An inquiry into the consequences of relationships between individual performance and organizational success. American Journal of Sociology, 87, 684–707] and Marsden and Campbell's [Marsden, P. V., & Campbell, K. E. (1990). Recruitment and selection processes: The organizational side of job searches. In R. Breiger (Ed.), Social mobility and social structures (pp. 59–79). New York: Cambridge University Press] work on employers’ recruitment and screening strategies to develop insights about when weak or strong ties will be used in the hiring process. Strong ties between a job seeker and an intermediary and between the intermediary and an employer are possible without also assuming a tie between the job seeker and the employer. This is possible because the tie between the job seeker and the intermediary exists in a different kind of network than the tie between the intermediary and the employer. When employees can only hurt collective efforts and employers are concerned about the quality of information about job seekers, administrators will prefer strong ties. These ideas also explain when ethnic homogeneity in hiring will be most prevalent.