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Fixed Salary or Incentive Contract? The Effect of Stickiness of Compensation Contracts
Wakabayashi, Toshiaki - 2022
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...
Persistent link: https://www.econbiz.de/10013296794
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The efficacy of tournaments for non-routine team tasks
Englmaier, Florian; Grimm, Stefan; Grothe, Dominik; … - 2021
also render teams’ identity and social-image concerns salient. We study the effects of tournaments on team performance in a …,700 participants), we vary the salience of team identity, social-image concerns, and whether teams face monetary incentives. Increased … salience of team identity does not improve performance. Social-image motivates mainly the top-performing teams. Additional …
Persistent link: https://www.econbiz.de/10012597694
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The efficacy of tournaments for non-routine team tasks
Englmaier, Florian; Grimm, Stefan; Grothe, Dominik; … - 2023
also render teams' identity and image concerns salient. We study the effects of tournaments on team performance in a non … salience of team identity, social image concerns, and whether teams face monetary incentives. Increased salience of team … identity does not improve performance. Social image motivates the top performers. Additional monetary incentives improve all …
Persistent link: https://www.econbiz.de/10014495030
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Subjective evaluations : discretionary bonuses and feedback credibility
Fuchs, William - 2013
We provide a new rationale for the use of discretionary bonuses. In a setting with unknown match qualities between a worker and a firm and subjective evaluations by the principal, bonuses are useful in order to make the feedback from the firm to the workers credible. This way workers in good...
Persistent link: https://www.econbiz.de/10010221557
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Uncertainty, Pay for Performance, and Asymmetric Information
Balmaceda, Felipe - 2010
This article develops a new rationale for the emergence of pay-for-performance contracts where the labor market is competitive, workers are risk averse, and firms are risk neutral and unaware of workers' productivities. The article shows that the prevalence of pay for performance rises and the...
Persistent link: https://www.econbiz.de/10013150889
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Does group-based incentive pay lead to higher productivity? : evidence from a complex and interdependent industrial production process
Frederiksen, Anders; Hansen, Daniel Baltzer Schjødt; … - 2022
. Features of the design and implementation process created trust, a common goal, and a shared identity, which limited freeriding. …
Persistent link: https://www.econbiz.de/10012804137
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Complementarity of performance pay and task allocation
Hong, Bryan; Küng, Lorenz; Yang, Mu-Jeung - 2016
Complementarity between performance pay and other organizational design elements has been argued to be one potential explanation for stark differences in the observed productivity gains from performance pay adoption. Using detailed data on internal organization for a nationally representative...
Persistent link: https://www.econbiz.de/10012219318
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The Relationship between Delegation and Incentives across Occupations : Evidence and Theory
DeVaro, Jed; Prasad, Suraj - 2023
A large literature suggests that incentive pay and delegation of worker authority are positively related. Using data from a large cross section of British establishments, we show that the positive relationship found in the empirical literature masks a stark difference across jobs. Classifying...
Persistent link: https://www.econbiz.de/10014255607
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When high-powered incentive contracts reduce performance : choking under pressure as a screening device
Bannier, Christina E.; Feess, Eberhard - 2010
Empirical and experimental papers find that high-powered incentives may reduce performance rather than improve it; a phenomenon referred to as "choking under pressure". We show that competition for high ability workers nevertheless leads firms to offer high bonus payments, thereby deliberately...
Persistent link: https://www.econbiz.de/10003939534
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Bonus culture : competitive pay, screening, and multitasking
Bénabou, Roland; Tirole, Jean - 2013
This paper analyzes the impact of labor market competition and skill-biased technical change on the structure of compensation. The model combines multitasking and screening, embedded into a Hotelling-like framework. Competition for the most talented workers leads to an escalating reliance on...
Persistent link: https://www.econbiz.de/10009729417