The Tenuous Relationship between Effort and Performance Pay

When a worker is offered performance related pay, the incentive effect is not only determined by the shape of the incentive contract, but also by the probability of contract enforcement. We show that weaker enforcement may reduce the worker's effort, but lead to higher-powered incentive contracts. This creates a seemingly negative relationship between effort and performance pay.

MoreLess

Year of publication:	2012-06-01
Authors:	Kvaløy, Ola ; Olsen, Trond
Institutions:	Handelshøgskolen, Universitetet i Stavanger

More details

Extent:	application/pdf
Series:	UiS Working Papers in Economics and Finance.
Type of publication:	Book / Working Paper
Notes:	The text is part of a series UiS Working Papers in Economics and Finance Number 2012/11 28 pages
Classification:	A10 - General Economics. General
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010550860