Subjective Evaluations: Discretionary Bonuses and Feedback Credibility

William Fuchs

American Economic Journal: Microeconomics, 2015, vol. 7, issue 1, 99-108

Abstract: 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. (JEL D82, J33, M12, M52)

JEL-codes: D82 J33 M12 M52 (search for similar items in EconPapers)
Date: 2015
Note: DOI: 10.1257/mic.20130250
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Citations: View citations in EconPapers (17)

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Working Paper: Subjective Evaluations: Discretionary Bonuses and Feedback Credibility (2013)
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