Pay for performance with motivated employees

Cerrone, Claudia ORCID: https://orcid.org/0000-0003-1551-6723 and Manna, Ester (2018) Pay for performance with motivated employees. The B.E. Journal of Economic Analysis & Policy, 18 (1) , 20170190. ISSN 1935-1682 [Article] (doi:10.1515/bejeap-2017-0190)

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Abstract

Heterogeneity in intrinsic motivation affects the optimal contract offered to employees in teams. Under individual incentives, the effort exerted by both motivated and selfish employees is distorted. This distortion is mitigated if employees receive a wage based on team performance. As a result, the principal prefers to use team incentives, while motivated employees are better off with individual incentives.

Item Type: Article
Keywords (uncontrolled): adverse selection, intrinsic motivation, individual and team incentives, D03, D82, D86
Research Areas: A. > Business School > Economics
Item ID: 30774
Notes on copyright: © 2018 Walter de Gruyter GmbH, Berlin/Boston.
The final publication is available at www.degruyter.com - https://doi.org/10.1515/bejeap-2017-0190
The published article is made available in this repository in accordance with the publisher's policy - https://www.degruyter.com/page/repository-policy
Useful Links:
Depositing User: Claudia Cerrone
Date Deposited: 03 Aug 2020 08:35
Last Modified: 09 Feb 2022 10:38
URI: https://eprints.mdx.ac.uk/id/eprint/30774

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