Subjective Evaluations: Discretionary Bonuses and Feedback Credibility

We provide a new rationale for the use of discretionary bonuses. In a setting with unknown match qualities between a worker and a firm and subjective evaluations by the principal, bonuses are useful in order to make the feedback from the firm to the workers credible. This way workers in good matches are less inclined to accept outside offers.

MoreLess

Year of publication:	2013-11
Authors:	Fuchs, William
Institutions:	Institute for the Study of Labor (IZA)
Subject:	discretionary bonuses \| feedback \| signalling

More details

Extent:	application/pdf
Series:	IZA Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	Number 7758 11 pages
Classification:	D82 - Asymmetric and Private Information ; D83 - Search, Learning, Information and Knowledge ; D86 - Economics of Contract: Theory ; M5 - Personnel Economics
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010720080