Becoming “We” Instead of “I”, Identity Management and Incentives in the Workplace

Jocelyn Donze () and Trude Gunnes

Working Papers of BETA from Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg

Abstract: This article studies how a firm fosters formal and informal interaction among its employees to create a collective identity and positively influence their effort. We develop an agency model, in which employees have both a personal and a social ideal for effort. The firm does not observe the personal ideals, which gives rise to an adverse selection problem, but can make its workforce more sensitive to the social ideal by allocating part of working hours to social interaction. We show that there are two reasons why the firm invests in social capital. First, it reinforces the effectiveness of monetary incentives. Second, by creating a shared identity in the workforce, the firm is able to reduce the adverse selection problem. We also show that the firm allocates more time to bonding activities when employees have low personal ideals for effort or when they are more heterogeneous as regards these ideals.

Keywords: agency theory; social interaction; social norms; norm regulation. (search for similar items in EconPapers)
JEL-codes: D2 D8 J3 M5 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-cdm, nep-cta, nep-hrm and nep-soc
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http://beta.u-strasbg.fr/WP/2013/2013-17.pdf (application/pdf)

Related works:
Journal Article: Becoming “We” instead of “I”, identity management and incentives in the workplace (2018)
Working Paper: Becoming "We" Instead of "I", Identity Management and Incentives in the Workplace (2013)
Working Paper: Becoming "We" instead of "I". Identity management and incentives in the workplace (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ulp:sbbeta:2013-17

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