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Design and Implementation of Pay for Performance

Gibbs, Michael - Institute for the Study of Labor (IZA) - 2012

A large, mature and robust economic literature on pay for performance now exists, which provides a useful framework for thinking about pay for performance systems. I use the lessons of the literature to discuss how to design and implement pay for performance in practice.

Persistent link: https://www.econbiz.de/10009646325

Optimizing Incentive Plan Design: A Case Study

Levenson, Alec; Zoghi, Cindy; Gibbs, Michael; Benson, George - Institute for the Study of Labor (IZA) - 2011

We study effects of a firm's attempt to optimize an existing incentive scheme to increase sales growth for direct store delivery workers. Before optimization workers reported Ratchet Effects that lowered productivity. The altered incentive plan offered higher compensation for increased sales...

Persistent link: https://www.econbiz.de/10009323407

Can Higher Bonuses Lead to Less Effort? Incentive Reversal in Teams

Klor, Esteban F.; Kube, Sebastian; Winter, Eyal; … - Institute for the Study of Labor (IZA) - 2011

Conventional wisdom suggests that an increase in monetary incentives should induce agents to exert higher effort. In … with positive externalities between agents, incentive reversal might occur: an increase in monetary incentives (either …

Persistent link: https://www.econbiz.de/10008839289

Base Salaries, Bonus Payments, and Work Absence among Managers in a German Company

Pfeifer, Christian - Institute for the Study of Labor (IZA) - 2012

Questions about compensation structures and incentive effects of pay-for-performance components are important for firms' Human Resource Management as well as for economics in general and labor economics in particular. This paper provides scarce insider econometric evidence on the structure and...

Persistent link: https://www.econbiz.de/10010675505

Performance Pay and Risk Aversion

Grund, Christian; Sliwka, Dirk - Institute for the Study of Labor (IZA) - 2006

A main prediction of agency theory is the well known risk-incentive trade-off. Incentive contracts should be found in …

Persistent link: https://www.econbiz.de/10005822413

Employee Stock Purchase Plans: Gift or Incentive? Evidence from a Multinational Corporation

Bryson, Alex; Freeman, Richard B. - Institute for the Study of Labor (IZA) - 2014

Many large listed firms offer workers the opportunity to buy shares in the firm at discounted rates through employee stock purchase plans (ESPP). The discounted rate creates a gift exchange, where the firm hopes that workers who accept the gift reciprocate with greater loyalty and effort. But...

Persistent link: https://www.econbiz.de/10010959665

Self-Selection and the Efficiency of Tournaments

Eriksson, Tor; Teyssier, Sabrina; Villeval, Marie-Claire - Institute for the Study of Labor (IZA) - 2006

When exogenously imposed, rank-order tournaments have incentive properties but their overall efficiency is reduced by a high variance in performance (Bull, Schotter, and Weigelt 1987). However, since the efficiency of performance-related pay is attributable both to its incentive effect and to...

Persistent link: https://www.econbiz.de/10005763542

Other-Regarding Preferences and Performance Pay – An Experiment on Incentives and Sorting

Eriksson, Tor; Villeval, Marie-Claire - Institute for the Study of Labor (IZA) - 2004

experiment that analyzes the influence of other-regarding preferences on sorting and incentives. Experimental evidence shows that … the provision of incentives and their sorting effect. …

Persistent link: https://www.econbiz.de/10005763609

Trust as a Signal of a Social Norm and the Hidden Costs of Incentive Schemes

Sliwka, Dirk - Institute for the Study of Labor (IZA) - 2006

. High-powered incentives may crowd out motivation as pessimism about the norm is conveyed. But by choosing fixed wages or …

Persistent link: https://www.econbiz.de/10005761807

Performance Measure Properties and Incentives

Gibbs, Michael; Merchant, Kenneth A.; Stede, Wim A. Van der - Institute for the Study of Labor (IZA) - 2004

multitask incentives relative to the primary performance measure. Specifically, we find evidence that second and third bonuses … are used to provide better incentives for cooperation and to reduce incentives for manipulation. Fourth, we present … implicit incentives for promotions and other rewards, also appear to play the same roles. …

Persistent link: https://www.econbiz.de/10005762158