Incentive pay and performance: Insider econometrics in a multi-unit firm

Hein Bogaard and Jan Svejnar

Labour Economics, 2018, vol. 54, issue C, 100-115

Abstract: Exploiting organizational reforms in a foreign-owned bank in Central-East Europe, we carry out an insider econometrics study of the implementation of modern human resource management reforms giving some employees high-powered incentives. We use branch-level panel data and particular features of the reform process to implement two estimators that address endogeneity bias (an outstanding issue in this literature) in a complementary fashion: an IV approach and Generalized Propensity Score estimation. In line with theory we show that some reforms had a positive impact on productivity. We also underscore the risks of introducing quantity-based incentives where quality is important.

Keywords: Insider econometrics; Endogeneity of HRM policies; Incentives; Foreign ownership; Banking; Central and Eastern Europe (search for similar items in EconPapers)
JEL-codes: F23 G21 M52 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0927537117300386
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Incentive Pay and Performance: Insider Econometrics in a Multi-Unit Firm (2014)
Working Paper: Incentive Pay and Performance: Insider Econometrics in a Multi-Unit Firm (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:54:y:2018:i:c:p:100-115

DOI: 10.1016/j.labeco.2018.07.001

Access Statistics for this article

Labour Economics is currently edited by A. Ichino

More articles in Labour Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().