Altruism, Conformism, and Incentives in the Workplace

Doctoral thesis English OPEN
Tichem, Jan;
(2014)
  • Publisher: Thela Thesis, Amsterdam

markdownabstractPerformance pay can motivate employees, but money is not the only motivation in the workplace. Altruism, which means that someone enjoys the well-being of someone else, can also provide a powerful motivation. The first part of this thesis studies theoret... View more
  • References (57)
    57 references, page 1 of 6

    1 Introduction 1 1.1 Motivation, aim, and method . . . . . . . . . . . . . . . . . . . . . . 1 1.2 Altruism and conformism . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.3 Overview of the thesis . . . . . . . . . . . . . . . . . . . . . . . . . . 6

    2 Altruism and Relational Incentives in the Workplace 11 2.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 2.2 Related literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 2.3 The model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 2.4 Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 2.4.1 Credibility of incentives . . . . . . . . . . . . . . . . . . . . . 21 2.4.2 The optimal relational contract . . . . . . . . . . . . . . . . . 25 2.4.3 Altruism and contract selection . . . . . . . . . . . . . . . . . 29 2.5 Practical and testable implications . . . . . . . . . . . . . . . . . . . 33

    3 Leniency Bias in Long-Term Workplace Relationships 35 3.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 3.2 Related literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 3.3 The model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 3.4 Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 3.4.1 The supervisor's evaluation decision . . . . . . . . . . . . . . . 46 3.4.2 The agent's effort and participation decision . . . . . . . . . . 48 3.4.3 Optimal contracts . . . . . . . . . . . . . . . . . . . . . . . . . 49

    4 Endogenous Effort Norms in Hierarchical Firms 75 4.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 4.2 Related literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 4.3 A model of effort norms in hierarchical firms . . . . . . . . . . . . . . 82 4.4 Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 4.4.1 Contractible effort . . . . . . . . . . . . . . . . . . . . . . . . 83 4.4.2 Non-contractible effort . . . . . . . . . . . . . . . . . . . . . . 85 4.5 Implications for organizational design . . . . . . . . . . . . . . . . . . 88 4.5.1 Promotion decisions . . . . . . . . . . . . . . . . . . . . . . . 88 4.5.2 Managerial spans of control . . . . . . . . . . . . . . . . . . . 90 4.6 Concluding remarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 4.A Allowing for performance pay . . . . . . . . . . . . . . . . . . . . . . 96 Brown, M., A. Falk, and E. Fehr (2004), "Relational Contracts and the Nature of Market Interactions." Econometrica, 72(3): 747-780.

    Brown, M., A. Falk, and E. Fehr (2012), "Competition and Relational Contracts: The Role of Unemployment as a Disciplinary Device." Journal of the European Economic Association, 10(4): 887-907.

    Bull, C. (1987), "The Existence of Self-Enforcing Implicit Contracts." Quarterly Journal of Economics, 102(1): 147-159.

    Campbell, C.M. and K.S. Kamlani (1997), "The Reasons for Wage Rigidity: Evidence From a Survey of Firms." Quarterly Journal of Economics, 112(3): 759-789.

    Carlin, B.I. and S. Gervais (2009), "Work Ethic, Employment Contracts, and Firm Value." Journal of Finance, 64(2): 758-821.

    Carmichael, L. (1983), "The Agent-Agents Problem: Payment by Relative Output." Journal of Labor Economics 1(1): 50-65.

    Casadesus-Masanell, R. (2004), "Trust in Agency." Journal of Economics and Management Strategy, 13(3): 375-404.

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