We present evidence on the effect of social connections between workers and managers on productivity in the workplace … workers managed. We find that when managers are paid fixed wages, they favor workers to whom they are socially connected …

work for. We reject, however, the efficient pay hypothesis as CEO pay and the demand for managers increases in Germany in … difficult times when the typical firm size shrinks. We find further that domestic and global competition for managers has …

bonuses under a Management-by-Objectives (MBO) incentive scheme. Six years of personnel data of 177 managers in a German …

managerial incentives affect both the mean and dispersion of workers' productivity through two channels. First, managers respond … increase. Second, managers select out the least able workers, implying that the mean increases but the dispersion may decrease … of worker productivity. Analysis of individual level productivity data shows that managers target their effort towards …