Internal Talent Markets, by Cowgill, Davis , Montagnes, and Perkowski

 Here's a paper that deals with the tradeoff between centralized assignment and market-like mechanisms for job assignment within a firm, 

Stable Matching on the Job? Theory and Evidence on Internal Talent Markets, by Bo Cowgill , Jonathan M. V. Davis , B. Pablo Montagnes , Patryk Perkowski, Managment Science, Published Online:6 Jun 2024https://doi.org/10.1287/mnsc.2023.01373

Abstract: "A principal often needs to match agents to perform coordinated tasks, but agents can quit or slack off if they dislike their match. We study two prevalent approaches for matching within organizations: centralized assignment by firm leaders and self-organization through market-like mechanisms. We provide a formal model of the strengths and weaknesses of both methods under different settings, incentives, and production technologies. The model highlights trade-offs between match-specific productivity and job satisfaction. We then measure these trade-offs with data from a large organization’s internal talent market. Firm-dictated matches are 33% more valuable than randomly assigned matches within job categories (using the firm’s preferred metric of quality). By contrast, preference-based matches (using deferred acceptance) are only 5% better than random but are ranked (on average) about 38 percentiles higher by the workforce. The self-organized match is positively assortative and helps workers grow new skills; the firm’s preferred match is negatively assortative and harvests existing expertise."

"In our empirical results, we find a high degree of match-specific productivity and specialization. As a result, there are large potential gains in match quality from the executive’s perspective. However, workers and managers are apathetic about these assignments. Our results suggest that these differences arise in part through differences in assortative matching. In the workforce-driven match, the firm’s best workers and managers team up together. However, from the CEO’s perspective, a good manager is more helpful in carrying the bad workers. We also find that workers prioritize opportunities for on-the-job skill development—especially in non–firm-specific skills—and the firm does not."