Management meted out punishment to enforce rules and encourage adherence. However, the effectiveness depended on how the employees perceive and interpret the policy. Therefore, it was uncertain how to best achieve the target. The paper tested employees’ behavioral responses in two conditions,...

This study adopts behavioral contract theory through a mathematical model and clarifies the situation in which a fixed–salary contract is preferable to incentives–based one for the principal. Theoretically, the expected utility for the principal is higher under an incentives–based contract...

This paper uses matched employer-employee panel data to show that individual jobsatisfaction is higher when other workers in the same establishment are better-paid. Thisruns contrary to a large literature which has found evidence of income comparisons insubjective well-being...

Human capital and deferred compensation might explain why firms employ but do nothire older workers. Adjustments of wage-tenure profiles for older new entrants areexplored in the context of deferred compensation. From an equity theory perspective,such adjustments might lead to adverse incentive...

We investigate the observable determinants of sorting between salary and performace pay jobs, the extent to which wage functions differ between the two, and the magnitude of the unobserved ability differential between salary and performance pay workers...

We study compensation packages in family and non-family firms. Using matched employeremployeedata for a representative sample of French establishments, we first show thatfamily firms pay on average lower wages to their workers. We find that part of this wage gapis due to differences in...

We study how workers’ wages respond to TFP-driven innovations in firms’ labor productivity.Using unique data with highly reliable firm-level output prices and quantities in themanufacturing sector in Sweden, we are able to derive measures of physical (as opposed torevenue) TFP to instrument...

Incentive schemes not only influence the effort provision of workers, but might also induce sorting. As drivers of self-selection, the literature mainly focuses on measures of productivity; however, other variables, such as preferences, beliefs and personality, also play a role. With this paper,...

Die Studie analysiert die Determinanten der Inzidenz, des Umfangs und der Kompensation von Überstunden in Westdeutschland und Großbritannien in den Jahren 1991 bis 1998. Ist die Inzidenz von Überstunden in beiden Ländern noch durchaus vergleichbar, so arbeiten britische Arbeitnehmer im...

We present a model of wage contract violation that implies a possibility of multiple equilibria in the level of arrears. Positive feedback arises because each employer's arrears affect the costs of late payment faced by other employers operating in the same labor market, resulting in a network...