Arbeitspapier
Non-linear Incentives, Worker Productivity, and Firm Profits: Evidence from a Quasi-Experiment
Using administrative data from a major Chinese insurance firm that raised its sales targets and rewards for insurance agents in a highly non-linear incentive system, we find that the improvement in productivity far outweighed the costs associated with bunching distortions and other gaming behaviors. Labor turnover decreased, which suggests that the extra pay for workers exceeded the non-pecuniary cost of extra effort by workers, and thus improved their well-being. The firm gained about two-thirds of the higher net output, making the reform profitable. Analysis of non-linear incentive systems should accordingly focus more on the productivity-enhancing than on the distortionary effects.
- Sprache
-
Englisch
- Erschienen in
-
Series: IZA Discussion Papers ; No. 14125
- Klassifikation
-
Wirtschaft
Compensation Packages; Payment Methods
Personnel Economics: Compensation and Compensation Methods and Their Effects
- Thema
-
non-linear incentives
insurance commission
strategic gaming behavior
productivity
turnover rates
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Freeman, Richard B.
Huang, Wei
Li, Teng
- Ereignis
-
Veröffentlichung
- (wer)
-
Institute of Labor Economics (IZA)
- (wo)
-
Bonn
- (wann)
-
2021
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:44 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Freeman, Richard B.
- Huang, Wei
- Li, Teng
- Institute of Labor Economics (IZA)
Entstanden
- 2021
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