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Performance pay, sorting and social motivation

[journal article]

Eriksson, Tor; Villeval, Marie Claire

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Please use the following Persistent Identifier (PID) to cite this document:http://nbn-resolving.de/urn:nbn:de:0168-ssoar-268278

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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]
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 http://dx.doi.org/10.1016/j.jebo.2007.10.003
Status Postprint; peer reviewed
Licence PEER Licence Agreement (applicable only to documents from PEER project)