The Determinants of Salary and Bonus for Rank and File Employees

Arbeitspapier

The current study integrates the repeated game approach to implicit contracts and the analysis of explicit bonus rules based on subjective performance evaluation to determine the optimal structure of the compensation scheme for the average white- collar employee. In contrast to previous contributions we assume that the agent is risk-neutral but liquidity constrained. The salary reflects the maximum reward associated with contractual compliance which can be implicitly agreed. If the probability that the employee remains within the firm increases, the principal can reduce the rent captured by the agent. Hence, the optimal salary increases and the bonus decreases. Nevertheless, the optimal effort supply unambiguously increases.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Diskussionsbeiträge - Serie I ; No. 327

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Personnel Economics: Compensation and Compensation Methods and Their Effects
• Thema: White-Collar Employees ; Implicit Contract ; Explicit Bonus ; Reputational Equilibrium ; Anreizvertrag ; Leistungsanreiz ; Vertrag ; Agency Theory ; Wiederholte Spiele ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Demougin, Dominique M. ; Fabel, Oliver
• Ereignis: Veröffentlichung
• (wer): Universität Konstanz, Fachbereich Wirtschaftswissenschaften
• (wo): Konstanz
• (wann): 2004

Weitere Informationen

• Handle: http://hdl.handle.net/10419/23023
• URN: urn:nbn:de:bsz:352-opus-13044
• Letzte Aktualisierung: 10.03.2025, 11:41 MEZ