Signaling and Screening of Workers' motivation

This paper develops a model in which workers to a certain extent enjoy working. We examine the implications of workers’ intrinsic motivation for optimal monetary incentive schemes. We show that motivated workers work harder and, for a given level of e.ort, are willing to work for a lower wage. When people di.er in their motivation to work at a particular firm, the profits of the firm depend on its capability to attract and select highly motivated workers. We show that when the firm has all the bargaining power and workers face application cost, the firm needs to commit to a minimum wage o.er in order to attract workers. A higher minimum wage increases the probability to fill the vacancy, but decreases the expected average quality of job applicants, as it induces lower motivated workers to apply. The optimal level of the minimum wage depends on whether or not the firm can observe the motivation of the applicants. If applicants can credibly signal their motivation, a minimum wage not only helps to attract workers, but also to select the best-motivated worker among the job applicants.signaling and screening models, intrinsic motivation, monetary incentive schemes, wage posting, minimum wage, worker selection

Managerial Talent, Motivation, and Self-Selection into Public Management

The quality of public management is a recurrent concern in many countries. Calls to attract the economy’s best and brightest managers to the public sector abound. This paper studies self-selection into managerial positions in the public and private sector, using a model of a perfectly competitive economy where people differ in managerial ability and in public service motivation. We find that, if demand for public sector output is not too high, the equilibrium return to managerial ability is always higher in the private sector. As a result, relatively many of the more able managers self-select into the private sector. Since this outcome is efficient, our analysis implies that attracting a more able managerial workforce to the public sector by increasing remuneration to private-sector levels is not cost-efficient.public management, public service motivation, managerial ability, self-selection

Incentives and Workers’ Motivation in the Public Sector

Civil servants have a bad reputation of being lazy. However, citizens' personal experiences with civil servants appear to be significantly better. We develop a model of an economy in which workers differ in laziness and in public service motivation, and characterise optimal incentive contracts for public sector workers under different informational assumptions. When civil servants' effort is unverifiable, lazy workers find working in the public sector highly attractive and may crowd out workers with a public service motivation. When effort is verifiable, the government optimally attracts motivated workers as well as the economy's laziest workers by offering separating contracts, which are both distorted. Even though contract distortions reduce aggregate welfare, a majority of society may be better off as public goods come at a lower cost.public sector labour markets, incentive contracts, work ethics, public service motivation

Managerial Talent, Motivation, and Self-Selection into Public Management

The quality of public management is a recurrent concern in many countries. Calls to attract the economy’s best and brightest managers to the public sector abound. This paper studies self-selection into managerial and non-managerial positions in the public and private sector,using a model of a perfectly competitive economy where people differ in managerial ability and in public service motivation. We find that, if demand for public sector output is not too high, the equilibrium return to managerial ability is always highest in the private sector. As aresult, relatively many of the more able managers self-select into the private sector. Since this outcome is efficient, our analysis implies that attracting a more able managerial workforce to the public sector by increasing remuneration to private-sector levels is not cost-efficient.public management, public service motivation, managerial ability, self-selection

Competitiedrang op de werkvloer

Recent onderzoek laat zien dat vrouwen minder snel voor een competitieve omgeving kiezen dan mannen, en soms ook minder goed presteren onder competitie. In een veldexperiment zijn de gevolgen hiervan voor gedrag op de werkvloer onderzocht. Teamsamenstelling blijkt cruciaal

The Effect of Job Satisfaction on Job Search: Not just whether, but also where

Using survey data of public sector employees in the Netherlands, this paper shows that workers' satisfaction with various job domains not only affects whether but also where workers search for another job. An intuitive pattern emerges. Workers try to leave their current employer when their job search is instigated by dissatisfaction with an organisation-specific job domain, like management. Conversely, more job-specific problems, like a lack of autonomy, lead workers to opt for another position within their current organisation. Dissatisfaction with job domains which may have an industry-specific component, such as job duties, drives workers out of their industry. These findings suggest that on-the-job experience provides workers with information about the quality of their own job as well as of other jobs in their organisation and industry

Dedicated Doctors: Public and Private Provision of Health Care with Altruistic Physicians

Physicians are supposed to serve patients' interests, but some are more inclined to do so than others. This paper studies how the system of health care provision affects the allocation of patients to physicians when physicians differ in altruism. We show that allowing for private provision of health care, parallel to (free) treatment in a National Health Service, benefits all patients. It enables rich patients to obtain higher quality treatment in the private sector. Because the altruistic physicians infer that in their absence, NHS patients receive lower treatment quality than private sector patients, they optimally decide to work in the NHS. Hence, after allowing for private provision, the remaining (relatively poor) NHS patients are more likely to receive the superior treatment provided by altruistic physicians. We also show, however, that allowing physicians to moonlight, i.e. to operate in both the NHS and the private sector simultaneously, nullifies part of these beneficial effects for the poorest patients

Management practices: Are not-for-profits different?

Recent studies have demonstrated the importance of good management for firm performance. Here, we focus on management in not-for-profits (NFPs). We present a model predicting that management quality will be lower in NFPs compared to for-profits (FPs), but that outputs may not be worse if managers are altruistic. Using a tried and tested survey of management practices, we find that NFPs score lower than FPs but also that, while the relationship between management scores and outputs holds for FPs, the same is not true for NFPs. One implication is that management practices that work for FPs may be less effective in driving performance in NFPs.Not-for-profits, management, impure altruism

Tournament Incentives in the Field: Gender Differences in the Workplace

We ran a field experiment in a Dutch retail chain consisting of 128 stores. In a random sample of these stores, we introduced short-term sales competitions among subsets of stores. We find that sales competitions have a large effect on sales growth, but only in stores where the store's manager and a large fraction of the employees have the same gender. Remarkably, results are alike for sales competitions with and without monetary rewards, suggesting a high symbolic value of winning a tournament. Lastly, despite the substantial variation in team size, we find no evidence for free-riding.sales contests, field experiment, gender differences, competition, awards

Signaling and Screening of Workers' Motivation

This paper develops a model in which workers to a certain extent like to exert effort at the workplace. We examine the implications of workers' motivation for optimal monetary incentive schemes. We show that in the optimum motivated workers work harder and are willing to work for a lower wage. In addition, we examine whether job seekers have an incentive to be truthful about their motivation in a job interview. When the firm has sufficient bargaining power, workers hide their motivation so as to increase the firm's wage offer. As a result, an inefficient allocation of workers over firms may arise. We show that a commitment to a minimum wage may help to restore allocational efficiency and may be in the interest of the firm