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@article{ Eriksson2008, title = {Performance pay, sorting and social motivation}, author = {Eriksson, Tor and Villeval, Marie Claire}, journal = {Journal of Economic Behavior & Organization}, number = {2}, pages = {412-421}, volume = {68}, year = {2008}, doi = {https://doi.org/10.1016/j.jebo.2007.10.003}, urn = {https://nbn-resolving.org/urn:nbn:de:0168-ssoar-268278}, 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 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]}, }