This paper studies how pay transparency affects organizations that reward employees based on their efforts (i.e., using … "subjective performance evaluation"). First, we show that transparency triggers social comparisons that require the organization …, we show that transparency enables the employees to collectively sanction the organization for reneging on subjective …

This paper studies how pay transparency affects organizations that reward employees based on their efforts (i.e., using … "subjective performance evaluation"). First, we show that transparency triggers social comparisons that require the organization …, we show that transparency enables the employees to collectively sanction the organization for reneging on subjective …

, i.e. they have heterogeneous unobservable intrinsic motivation levels. I derive the optimal mechanism (allocation rule …

agents have unobservable intrinsic motivation levels. I show that the non-contractibility of effort (asymmetric information …