Arbeitspapier
How unjust! An experimental investigation of supervisors' evaluation errors and agents' incentives
In our simple model the supervisor: i) cannot observe the agent's effort; ii) aims at inducing the agent to exert high effort; but iii) can only offer rewards based on performance. Since performance is only stochastically related to effort, evaluation errors may occur. In particular, deserving agents that have exerted high effort may not be rewarded (Type I errors) and undeserving agents that have exerted low effort may be rewarded (Type II errors). We show that, although the model predicts both errors to be equally detrimental to performance, this prediction fails with a lab experiment. In fact, failing to reward deserving agents is significantly more detrimental than rewarding undeserving agents. We discuss our result in the light of some economic and managerial theories of behavior. Our result may have interesting implications for strategic human resource management and personnel economics and may also contribute to the debate about incentives and organizational performance.
- Language
-
Englisch
- Bibliographic citation
-
Series: IZA Discussion Papers ; No. 6254
- Classification
-
Wirtschaft
Design of Experiments: Laboratory, Individual
Personnel Economics: General
Labor-Management Relations, Trade Unions, and Collective Bargaining: General
- Subject
-
agency theory
organizational justice
compensation
type I and type II errors
real effort
Vergütungssystem
Personalbeurteilung
Gerechtigkeit
Prinzipal-Agent-Theorie
Arbeitsleistung
Test
- Event
-
Geistige Schöpfung
- (who)
-
Marchegiani, Lucia
Reggiani, Tommaso
Rizzolli, Matteo
- Event
-
Veröffentlichung
- (who)
-
Institute for the Study of Labor (IZA)
- (where)
-
Bonn
- (when)
-
2011
- Handle
- URN
-
urn:nbn:de:101:1-201203016281
- Last update
-
10.03.2025, 11:41 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Marchegiani, Lucia
- Reggiani, Tommaso
- Rizzolli, Matteo
- Institute for the Study of Labor (IZA)
Time of origin
- 2011
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