Dur, Robert

Non, Arjan

Roelfsema, Hein

English

We study optimal incentive contracts for workers who are reciprocal to management attention. When neither worker's effort nor manager's attention can be contracted, a double moral-hazard problem arises, implying that reciprocal workers should be given weak financial incentives. In a multiple-agent setting, this problem can be resolved using promotion incentives. We test these predictions using German Socio-Economic Panel data. We find that workers who are more reciprocal are significantly more likely to receive promotion incentives, while there is no such relation for individual bonus pay

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Reciprocity and Incentive Pay in the Workplace

https://research.vu.nl/ws/files/73350657/08080

Reciprocity and Incentive Pay in the Workplace

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