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US universities seem to have assistant professors go through a reappointment process before tenure. It seems like a similar review, complete with letters. Except unlike tenure, almost 100% of people get reappointed. In fact I do not know of a case in which a professor failed to have their contract renewed at reappointment.

Since it seems pro-forma, why do it at all?

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It is not totally pro-forma; I do know of examples where the contract was not renewed, though it certainly does happen less often than a tenure denial. I think the standard is basically "is it reasonable to hope this person gets tenure?"

I think the purpose is to try to get people ready for their tenure review by having a look at their case early, and trying point out where they are doing OK and where they could do better. If nothing else, it focuses the minds of people in the department who might have let things slide otherwise. It seems pretty logical to me.

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As Ben Webster points out, it is not entirely pro forma (I know a couple of people who did not get their contracts renewed). I agree with his points, but here's another aspect:

In departments where tenure denials are common, it's extremely valuable to get a preview of how strong the letters will be. If they aren't compelling enough, the department will probably still renew your contract, but they'll warn you that tenure isn't likely. This gives you several years to find another job, which is valuable because job hunting is more difficult after a tenure denial: universities that might have been interested when they thought they were competing with University X may not be as excited about taking what they perceive as University X's rejects. So the information from the reappointment process may be very useful in ways that are intentionally invisible from the outside.

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    P.S. You might think the initial hiring would give a good preview of the letters, but it doesn't necessarily, since there are substantially fewer letters and they are all from people chosen by the applicant. – Anonymous Mathematician Sep 14 '13 at 23:51

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