We conducted a randomized field experiment to examine how workers respond to wage cuts, and whether their response depends on the wages paid to coworkers. Workers were assigned to teams of two, performed identical individual tasks, and received the same performance – independent hourly wage....

Conventional wisdom suggests that an increase in monetary incentives should induce agents to exert higher effort. In this paper, however, we demonstrate that this may not hold in team settings. In the context of sequential team production with positive externalities between agents, incentive...

While intuition suggests that empowering workers to have some say in the control of the firm is likely to have beneficial incentive effects, empirical evidence of such an effect is hard to come by because of numerous confounding factors in the naturally occurring data. We report evidence from a...

In this paper, we estimate tenure-performance profiles using unique panel data that contain detailed information on individual workers' performance. We find that a 10 percent increase in tenure leads to an increase in performance of 5.5 percent of a standard deviation. This translates to an...

We conduct a framed field experiment with 245 employed persons (no students) as subjects and a real tax, which is levied on the subjects' income from working in our real effort task. In our first three treatments, the net wage is constant but gross wages are subject to different constant...

Team success relies on assigning team members to the right tasks. We use controlled experiments to study how roles are assigned within teams and how this affects team performance. Subjects play the takeover game in pairs consisting of a buyer and a seller. Understanding optimal play is very...

This paper uses matched employee-employer data from the British Workplace Employment Relations Survey (WERS) 2004 to examine the determinants of employee job anxiety and work-related psychological illness. Job anxiety is found to be strongly related to the demands of the job as measured by...

This paper studies the impact of diversity in cognitive ability among members of a team on their performance. We conduct a large field experiment in which teams start up and manage real companies under identical circumstances. Exogenous variation in – otherwise random – team composition is...

When a key responsibility of a manager is to allocate more or less attractive tasks to subordinates, these subordinates have an incentive to work hard and demonstrate their talents. As a new manager is less well acquainted with these talents this incentive mechanism is reinvigorated after a...

One of the most salient and relevant dimensions of team heterogeneity is ethnicity. We measure the causal impact of ethnic diversity on the performance of business teams using a randomized field experiment. We follow 550 students who set up 45 real companies as part of their curriculum in an...