The two key predictions of hedonic wage theory are that there is a trade-o¤ between wages and nonmonetary rewards and that the latter can be used as a sorting device by …rms to attract and retain the kind of employees they desire. Empirical analysis of these topics are scarce as they require...

This paper describes the spread of new work and pay practices in Danish private sector firms during the last two decades. The data source is two surveys directed at firms and carried out ten years apart. The descriptive analysis shows that large changes in the way work is organized in firms have...

Variable pay creates a link between pay and performance but may also help firms in attracting more productive employees. Our experiment investigates the impact of performance pay on both incentives and sorting and analyzes the influence of repeated interactions between firms and employees on...

Variable pay not only creates a link between pay and performance but may also help firms in attracting the more productive employees (Lazear 1986, 2000). However, due to lack of natural data, empirical analyses of the relative importance of the selection and incentive effects of pay schemes are...

Earlier studies of the impact of performance pay on individuals’ behavior have primarily been concerned with the effects on their earnings and productivity. The productivity increases associated with the adoption of performance pay practices may, however, come at the expense of quality of life...