Any opinions expressed here are those of the author(s) and not those of IZA. Research published inthis series may include views on policy, but the institute itself takes no institutional policy positions.The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international...

We empirically investigate possible distortions in subjective performance evaluations. A keyhypothesis is that evaluations are more upward biased the closer the social ties betweensupervisor and appraised employee. We test this hypothesis with a company data set from acall center organization...

We empirically investigate the impact of incentive scheme structure on the degree ofcooperation in firms using a unique and representative data set. Combining employee surveydata with detailed firm level information on the relative importance of individual, team, andcompany performance for...

We investigate the use of performance appraisal (PA) in German Firms. First, we derivehypotheses on individual and job based determinants of PA usage. Based on arepresentative German data set on individual employees, we test these hypotheses and alsoexplore the impact of PA on performance pay...

We provide an explanation for peer pressure in teams based on inequity aversion. Analyzinga two-period model with two agents, we find that the effect of inequity aversion stronglydepends on the information structure. When contributions are unobservable, agents act as ifthey were purely selfish....

A model is analyzed in which agents exert effort to create innovations within an organization. When payments are infeasible, the decision on the implementation of a proposal is shown to bemadeby simplemonotonic decision rules. A trade-off arises between the use of information and the incentives...

Die vorliegende Studie beleuchtet das Problem der Motivationsverdrängung bei Anreizsetzung durch Stücklöhne. Modelliert wird eine einfache experimentelle Prinzipal-Agenten-Beziehung. In einer ersten Bedingung kann der Prinzipal einen fixen Transfer an einen Agenten leisten. In einer zweiten...

A theory of responsibility is provided in a simple model where agents care for their career prospects. First, two agents with uncertain abilities work on a task. Second, a principal decides to promote one of them. Three types of equilibria occur. One in which no agent is responsible for the task...

The connection between strategic change and managerial turnover is studied within a model where managers decide on a firm's strategy. Managers as well as firm owners care for the long-term success of a company. But managers are also interested in their own reputation. Due to reputational...

If a manager stays in office for a long time he will have learned much about his subordinates. Thus competition among them will be weak as the manager has made up his mind who is suited best for which position. With a new manager the "race" for favorable tasks is restarted leading subordinates...