Awards are a Special Kind of Signal

Arbeitspapier

Awards appear in various forms, ranging from the title "Employee of the Month" to prizes, decorations, and other honors. This contribution develops a theory designed to analyze the widely-observed phenomenon of award giving. We use signaling theory as a basis for our discussion. The perspectives of the giver, and of (potential) recipients, of awards are studied in a principal-agent framework. The analysis highlights conditions under which signaling failures are likely to arise and compares awards with monetary compensation. The paper informs management practice by presenting a systematic appraisal of the signaling functions of awards. It proposes under which conditions awards tend to raise performance, and when monetary compensation proves to be superior.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CREMA Working Paper ; No. 2014-04

Classification and Topics

• Classification: Wirtschaft
• Subject: Awards ; prizes ; incentives ; signaling theory ; principal-agent framework

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Frey, Bruno S. ; Gallus, Jana
• Event: Veröffentlichung
• (who): Center for Research in Economics, Management and the Arts (CREMA)
• (where): Zürich
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/214550
• Last update: 10.03.2025, 11:41 AM CET