Shirking, Standards and the Probability of Detection

Publisher PD

A Bonus Given : Noise, Effort and Efficiency in a Flat Hierarchy

We thank participants at the European Association of Labour Economists (EALE) 2018 Conference, seminar participants at the University of Trier, Tim Barmby, Tor Eriksson, Laszlo Goerke and Alberto Palermo for valuable comments. We are also grateful to an anonoymous referee and the editors of this journal for helpful comments. The normal disclaimer appliesPeer reviewedPublisher PD

Shirking, Standards and the Probability of Detection

We are grateful to two anonymous referees and the editors of this journal for helpful comments. The normal disclaimer applies.Peer reviewe

Performance-related pay, efficiency wages and the shape of the tenure-earnings profile

Whilst it is well known that performance-related pay (PRP) may increase wage inequality within a firm, there is an inter-temporal lifecycle aspect that has been largely ignored in the literature. In this paper, we investigate theoretically how the introduction of PRP will influence the wage and remuneration profile over time. We develop a simple two-period model of efficiency wages that rationalizes recent empirical findings suggesting PRP flattens the pay-tenure profile. Such attenuation has important implications for the credibility of long-term employment contracts as it suggests that agency rather than human capital considerations drive the profile

Performance Related Pay, Efficiency Wages and the Shape of the Tenure-Earnings Profile

Peer reviewedPostprin