Yes, managers should be paid like bureaucrats

Arbeitspapier

Corporate scandals, reflected in excessive management compensation and fraudulent accounts, cause considerable damage. Agency theory's insistence on linking the compensation of managers and directors as closely as possible to firm performance is a major reason for these scandals. They cannot be overcome by improving variable pay for performance, as selfish extrinsic motivation is reinforced. Based on the common pool approach to the firm, institutions are proposed which serve to raise intrinsically motivated corporate virtue. More importance is to be attributed to fixed pay and strengthening the legitimacy of authorities by procedural fairness, relational contracts and organizational citizenship behavior.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 1379

Classification and Topics

• Classification: Wirtschaft ; Organizational Behavior; Transaction Costs; Property Rights ; Firm Behavior: Theory ; Firm Objectives, Organization, and Behavior: General ; Compensation Packages; Payment Methods
• Subject: agency theory ; intrinsic motivation ; crowding theory ; management compensation ; pay for performance ; organizational citizenship ; Führungskräfte ; Leistungsorientierte Vergütung ; Agency Theory ; Motivation ; Anreizvertrag ; Unternehmenskultur ; Theorie ; intrinsic motivation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Frey, Bruno S. ; Osterloh, Margit
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2005

Further information

• Handle: http://hdl.handle.net/10419/18743
• Last update: 10.03.2025, 11:44 AM CET