One of the main issues of the reform regarding a professor’s remuneration at German universities is the introduction of a performance-dependent salary. This paper applies relative rank order tournaments to special performance benefits at university level. It turns out that the awarding...

Die vor rund zehn Jahren eingeführte W-Besoldung weist gegenüber der vorhergehenden C-Besoldung einige Vor- und Nachteile auf. Nach ökonomischen Vorüberlegungen und einer kurzen Vorstellung der beiden Besoldungssysteme werden diese Unterschiede betrachtet und Empfehlungen formuliert.

This paper experimentally investigates the impact of different pay and relative performance information policies on employee effort. We explore three information policies: No feedback about relative performance, feedback given halfway through the production period, and continuously updated...

When exogenously imposed, rank-order tournaments have incentive properties but their overall efficiency is reduced by a high variance in performance (Bull, Schotter, and Weigelt 1987). However, since the efficiency of performance-related pay is attributable both to its incentive effect and to...

We demonstrate that effectiveness of performance-contingent incentives is inversely related to individual risk-aversion levels through two mechanisms: 1) rational optimizing decisions about the amount of effort to supply when effort is positively correlated with risk exposure and 2) the possibly...

We present a sorting model in which workers with greater ability and greater risk tolerance move into performance pay jobs and contrast it with the classic agency model of performance pay. Estimates from the German Socio-Economic Panel confirm testable implications drawn from our sorting model....

This paper experimentally investigates the impact of different pay and relative performance information policies on employee effort. We explore three information policies: No feedback about relative performance, feedback given halfway through the production period, and continuously updated...