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Task difficulty, performance measure characteristics, and the trade-off between insurance and well-allocated effort

Schnedler, Wendelin (contributor) - 2006

When designing incentives for a manager, the trade-off between insurance and a "good" allocation of effort across various tasks is often identified with a trade-off between the responsiveness (sensitivity, precision, signal-noise ratio) of the performance measure and its similarity (congruity,...

Persistent link: https://www.econbiz.de/10003323166

Strive to be first or avoid being last : an experiment on relative performance incentives

Dutcher, E. Glenn; Balafoutas, Loukas; Lindner, Florian; … - 2015

We utilize a laboratory experiment to compare effort provision under optimal tournament contracts with different distributions of prizes which motivate agents to compete to be first, avoid being last, or both. We find that the combined tournament contract incorporating both incentives at the top...

Persistent link: https://www.econbiz.de/10011337036

Exploitation aversion : when financial incentives fail to motivate agents

Carpenter, Jeffrey P.; Dolifka, David - 2013

Empirical studies of the principal-agent relationship find that extrinsic incentives work in many instances, linking rewards to performance increases effort, but that they can also backfire, reducing effort. Intrinsic motivation, the internal drive to work to master a skill or to improve one's...

Persistent link: https://www.econbiz.de/10009771729

Measuring ratchet effects within a firm : evidence from a field experiment varying contractual commitment

Bellemare, Charles; Shearer, Bruce S. - 2014

We present results from a field experiment designed to measure the importance of managerial commitment to a contract within a firm that pays its workers piece rates. In the tree planting industry the piece rate paid to workers is determined as a function of the difficulty of the terrain to be...

Persistent link: https://www.econbiz.de/10010359307

Motivating agents : how much does the mission matter?

Carpenter, Jeffrey P.; Gong, Erick - 2013

Economic theory predicts that agents will work harder if they believe in the "mission" of the organization. Well-identified estimates of exactly how much harder they will work have been elusive, however, because agents select into jobs. We conduct a real effort experiment with participants who...

Persistent link: https://www.econbiz.de/10010125806

Dynamic incentive effects of heterogeneity in multi-stage promotion contests

Stracke, Rudi; Sunde, Uwe - 2014

This paper shows that the incentive effects of heterogeneity may be positive rather than negative in dynamic contests with multiple stages. In particular, the well-studied adverse effects of heterogeneity in static interactions are compensated by positive continuation-value and selection...

Persistent link: https://www.econbiz.de/10010394022

High-powered performance pay and crowding out of non-monetary motives

Huffman, David; Bognanno, Michael Leonard - 2018

A previous literature cautions that paying workers for performance might crowd out non-monetary motives to work hard. Empirical evidence from the field, however, has been based on between-subjects designs that are best suited for detecting crowding out due to low-powered incentives. High-powered...

Persistent link: https://www.econbiz.de/10011946785

Multi-rater performance evaluations and incentives

Ockenfels, Axel; Sliwka, Dirk; Werner, Peter - 2024

We compare evaluations of employee performance by individuals and groups of supervisors, analyzing a formal model and running a laboratory experiment. The model predicts that multi-rater evaluations are more precise than single-rater evaluations if groups rationally aggregate their signals about...

Persistent link: https://www.econbiz.de/10014493793

Gift exchange and workers' fairness concerns : when equality is unfair

Abeler, Johannes; Altmann, Steffen; Kube, Sebastian; … - 2009

We study how different payment modes influence the effectiveness of gift exchange as a contract enforcement device. In particular, we analyze how horizontal fairness concerns affect performance and efficiency in an environment characterized by contractual incompleteness. In our experiment, one...

Persistent link: https://www.econbiz.de/10003863658

Preemptive behavior in sequential tournaments

Jost, Peter-J.; Kräkel, Matthias - 2000

Rank-order tournaments are usually modeled simultaneously. However, real tournaments are often sequentially. We show … that agents' strategic behavior significantly differs in sequential tournaments compared to simultaneous tournaments. In a … agent gives up. In general, the principal will prefer simultaneous tournaments in which preemptive behavior is impossible. …

Persistent link: https://www.econbiz.de/10011335241