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Performance pay, sorting and social motivation
[journal article]
Abstract "Variable pay links pay and performance but may also help firms to attract more productive employees. Our experiment investigates the impact of performance-pay on both incentives and sorting and analyzes the influence of repeated interactions between firms and employees on these effects. We show tha... view more
"Variable pay links pay and performance but may also help firms to attract more productive employees. Our experiment investigates the impact of performance-pay on both incentives and sorting and analyzes the influence of repeated interactions between firms and employees on these effects. We show that (i) the opportunity to switch from a fixed wage to variable pay scheme increases the average effort level and its variance, and (ii) high skill employees concentrate under the variable pay scheme; (iii) however, in repeated interactions, efficiency wages reduce the attraction of performance-pay. Social motivation and reputation influence both the provision of incentives and their sorting effect." [author's abstract]... view less
Classification
Human Resources Management
Document language
English
Publication Year
2008
Page/Pages
p. 412-421
Journal
Journal of Economic Behavior & Organization, 68 (2008) 2
DOI
https://doi.org/10.1016/j.jebo.2007.10.003
Status
Postprint; peer reviewed
Licence
PEER Licence Agreement (applicable only to documents from PEER project)