Treating Equals Unequally: Incentives in Teams, Workers' Motivation and Production Technology

Sebastian Goerg, Sebastian Kube and Ro'i Zultan

No 3959, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The importance of fair and equal treatment of workers is at the heart of the debate in organizational management. In this regard, we study how reward mechanisms and production technologies affect effort provision in teams. Our experimental results demonstrate that unequal rewards can potentially increase productivity by facilitating coordination, and that the effect strongly interacts with the exact shape of the production function. Taken together, our data highlight the relevance of the production function for organization construction and suggest that equal treatment of equals is neither a necessary nor a sufficient prerequisite for eliciting high performance in teams.

Keywords: discriminating mechanism; laboratory experiment; social preferences; production function; equity; team incentives; mechanism desig (search for similar items in EconPapers)
JEL-codes: C92 D23 D63 J31 J33 J41 M12 M52 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2009-01
New Economics Papers: this item is included in nep-bec, nep-cta and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published - published in: Journal of Labor Economics, 2010, 28 (4), 747 - 772

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Related works:
Journal Article: Treating Equals Unequally: Incentives in Teams, Workers' Motivation, and Production Technology (2010)
Working Paper: Treating Equals Unequally - Incentives in Teams, Workers' Motivation and Production Technology (2007)
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