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Consider managers evaluating their employees\' performances. Should managers justify their subjective evaluations? Suppose a manager\'s evaluation is private information. Justifying her evaluation is costly but limits the principal\'s scope for distorting her evaluation of the employee. I show...
Persistent link: https://www.econbiz.de/10011932985
I study when a firm prefers to be transparent about pay using a simple multidimensional signaling model. Pay transparency within the firm means that a worker can learn about his own worker-firm match from another worker's pay. This can either encourage or discourage workers – which affects...
Persistent link: https://www.econbiz.de/10014467792
This paper addresses the question, what metrics should be used for performance evaluation and in particular how they should be weighted and combined in the presence of technological interdependencies when the agents exhibit variedly strong developed rivalry. We find that the principal reacts to...
Persistent link: https://www.econbiz.de/10010427754
This paper analyzes the impact of heterogeneous (social) preferences on the weighting and combination of performance measures as well as on a firm’s profitability. We consider rivalry, egoism and altruism as extreme forms within the continuum of possible preferences and show that the principal...
Persistent link: https://www.econbiz.de/10010427755
under-compensation region. Ambiguity also causes a disconnect between the current effort cost and the strength of incentives …. That is, even when the agent is under-compensated, his incentives are as strong as in the over-compensation region, since … the worst-case. analyze the agent's incentives for this case, and show that the possibility of firing is detrimental to …
Persistent link: https://www.econbiz.de/10010282917
When designing incentives for a manager, the trade-off between insuranceand a “good” allocation of effort across …
Persistent link: https://www.econbiz.de/10005868463
work, agents usually make their effort choice in response to competition and monetary incentives. At the same time, they … also allow for variations in incentives in one work period, in order to analyze spillover effects to the work periods … experimental data. A short-term increase in incentives in one period should lead to higher effort in that period, and, due to …
Persistent link: https://www.econbiz.de/10011985278
Despite the prevalence of non-routine analytical team tasks in modern economies, little is known about how incentives … bonus incentives on the probability of completion of such a task. Bonus incentives increase performance due to the reward … minor role. Incentives improve performance also in an additional sample of presumably less motivated workers. However …
Persistent link: https://www.econbiz.de/10011932936
Promotions serve two purposes. They ought to provide incentives for employees and to select the best employee for a … benefit as a manager has the strongest incentives to work hard to get promoted. This article shows how the interplay of …
Persistent link: https://www.econbiz.de/10012290340
incentives influence performance in these tasks. In a series of field experiments involving more than 5,000 participants, we … investigate how incentives alter behavior in teams working on such a task. We document a positive effect of bonus incentives on … those seen with bonus incentives, rendering it as a likely mediator of incentive effects. …
Persistent link: https://www.econbiz.de/10014467847