Arbeitspapier

The perils of altering incentive plans: A case study

This paper studies a retail chain that introduced a sales incentive plan that rewarded for exceeding a sales target and subsequently cut the incentive intensity in addition to increasing the target. Utilizing monthly panel data for 54 months for all 53 units of the chain the paper shows that the introduction of the sales incentive plan increased sales and profitability, while the changes in the plan lead to a marked drop in sales and profitability. Thus, modifying the incentive plan proved costly for the firm. The results are consistent with the gift-exchange model of labor contracts.

Sprache
Englisch

Erschienen in
Series: ETLA Discussion Papers ; No. 1247

Klassifikation
Wirtschaft
Personnel Economics: Compensation and Compensation Methods and Their Effects
Compensation Packages; Payment Methods
Personnel Economics: Labor Management
Labor-Management Relations; Industrial Jurisprudence
Thema
incentive pay
gift exchange
panel data
Leistungsentgelt
Austauschtheorie (Soziologie)
Panel
Finnland

Ereignis
Geistige Schöpfung
(wer)
Kauhanen, Antti
Ereignis
Veröffentlichung
(wer)
The Research Institute of the Finnish Economy (ETLA)
(wo)
Helsinki
(wann)
2011

Handle
Letzte Aktualisierung
20.09.2024, 08:25 MESZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Kauhanen, Antti
  • The Research Institute of the Finnish Economy (ETLA)

Entstanden

  • 2011

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