Arbeitspapier

Differentiation and performance: An empirical investigation on the incentive effects of bonus plans

It is often claimed that supervisors do not differentiate enough between high and low performing employees when evaluating performance. The purpose of this paper is to study the incentive effects of this behavior empirically. We first show in a simple model that the perceived degree of past differentiation affects future incentives. We then study the impact of differentiation empirically with a large panel data set spanning many firms in one industry. On average, stronger differentiation has a substantial positive effect on performance. This effect is larger on higher hierarchical levels. But differentiation may become harmful at the lowest levels.

Sprache
Englisch

Erschienen in
Series: IZA Discussion Papers ; No. 6070

Klassifikation
Wirtschaft
Personnel Economics: Compensation and Compensation Methods and Their Effects
Organizational Behavior; Transaction Costs; Property Rights
Thema
bonus payments
differentiation
subjective performance evaluation
incentives
Leistungsentgelt
Lohnstruktur
Ökonomischer Anreiz
Arbeitsleistung
Theorie
Schätzung
Finanzsektor
Deutschland

Ereignis
Geistige Schöpfung
(wer)
Kampkötter, Patrick
Sliwka, Dirk
Ereignis
Veröffentlichung
(wer)
Institute for the Study of Labor (IZA)
(wo)
Bonn
(wann)
2011

Handle
URN
urn:nbn:de:101:1-201111072844
Letzte Aktualisierung
10.03.2025, 11:44 MEZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Kampkötter, Patrick
  • Sliwka, Dirk
  • Institute for the Study of Labor (IZA)

Entstanden

  • 2011

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