Promotion Tournaments and Individual Performance Pay

We analyze the optimal combination of promotion tournaments and individual performance pay in an employment relationship. An agent's effort is non-observable and he has private information about his suitability for promotion. We find that the principal does not provide individual incentives if it is sufficiently important to promote the most suitable candidate. Thus, we give a possible explanation for why individual performance schemes are less often observed in practice than predicted by theory. Furthermore, optimally trading off incentive and selection issues causes a form of the Peter Principle: The less suitable agent has an inefficiently high probability of promotion.Promotion Tournaments, Piece Rates, Hidden Characteristics, Hidden Action

The rise of individual performance pay

xRelational contracts; Multiagent Moral Hazard; Indispensable human capital

The Rise of Individual Performance Pay

Why does individual performance pay seem to prevail in human capital intensive industries? We present a model that may explain this. In a repeated game model of relational contracting, we analyze the conditions for implementing peer dependent incentive regimes when agents possess indispensable human capital. We show that the larger the share of values that the agents can hold-up, the lower is the implementable degree of peer dependent incentives. In a setting with team effects — complementary tasks and peer pressure, respectively — we show that while team-based incentives are optimal if agents are dispensable, it may be costly, and in fact suboptimal, to provide team incentives once the agents become indispensable.relational contracts, multiagent moral hazard, indispensable human capital

Relationship between organizational career management and individual performance

This paper looks at organizational career management and individual performance among insurance salespeople in Kedah. The objective of the paper is to determine whether there is a relationship between organizational career management and comprised measure of career management policies,career development, and career information while individual performance is measured in terms of the output performance. The Questionnaire was developed and distributed to the sample. The sample comprised insurance salespeople working at an insurance company in Alor Setar. A total of 169 questionnaires were sent but only 57 were returned, thereby achieving a response rate of 33.7%. The result found that there was a significant relationship between organizational career management and individual performance. Therefore, it could be inferred that organizational career management is strongly associated to individual performance

The social network's influences on individual performance

--

From social context and resilience to performance through job satisfaction: A multilevel study over time

Giving the crucial role of organizational context in shaping individual attitudes and behaviors at work, in this research we studied the effects of collective work-unit Perceptions of Social Context (PoSC) on individual work resilience and two key individual outcomes: job satisfaction and job performance as rated by the supervisor. We theorized that collective PoSC act as antecedents of individual variables, and that individual job satisfaction mediates the relationship between collective PoSC and job performance, and between work resilience and job performance over time. A sample of 305 white-collar employees, clustered in 67 work-units, participated in the study. Hierarchical linear modeling highlighted that collective PoSC are significant related to individual work resilience. Moreover, results showed that individual job satisfaction fully mediates the relationship between collective PoSC and individual job performance and the relationship between individual work resilience and individual job performance. At a practical level, results suggest that interventions on collective PoSC may increase work resilience, job satisfaction and job performance over time at the individual level