Bericht

Incentive effects of bonus payments: Evidence from an international company

This study uses panel data describing about 6,500 employees in a large international company to study the incentive effects of performance related pay. The company uses two performance related remuneration mechanisms. One is an individual ''surprise'' bonus payment. The other is a more structured system, where part of the salary is determined by individual performance evaluations. We hypothesize that effort is higher in departments where(i) performance evaluation results are more spread out, (ii) person-specific performance evaluations are more flexible over time, (iii) surprise bonuses are used more frequently. These hypotheses are tested using days of absence and overtime work as effort indicators. The tests yield that hypotheses (ii) and (iii) are supported, and that (i) cannot be tested reliably due to possible simultaneity bias in our data. We investigate and confirm the robustness of these findings. They suggest that surprise bonus payments and flexibility in the evaluation of individual performances over time provide effective incentives for employee effort.

Sprache
Englisch

Erschienen in
Series: WWZ Forschungsbericht ; No. 02/04

Klassifikation
Wirtschaft
Compensation Packages; Payment Methods
Personnel Management; Executives; Executive Compensation
Human Capital; Skills; Occupational Choice; Labor Productivity
Labor Contracts
Personnel Economics: General
Single Equation Models; Single Variables: Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
Thema
bonus
merit pay
pay for performance
worker effort
social status
mobility
absenteeism
overtime

Ereignis
Geistige Schöpfung
(wer)
Engellandt, Axel
Riphahn, Regina T.
Ereignis
Veröffentlichung
(wer)
Universität Basel, Wirtschaftswissenschaftliches Zentrum (WWZ)
(wo)
Basel
(wann)
2004

Handle
Letzte Aktualisierung
10.03.2025, 11:44 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Bericht

Beteiligte

  • Engellandt, Axel
  • Riphahn, Regina T.
  • Universität Basel, Wirtschaftswissenschaftliches Zentrum (WWZ)

Entstanden

  • 2004

Ähnliche Objekte (12)