Tenure, Wage Profiles and Monitoring

John G. Sessions and Nikolaos Theodoropoulos

A chapter in New Analyses of Worker Well-Being, 2014, vol. 38, pp 105-162 from Emerald Group Publishing Limited

Abstract: Efficiency wage theory predicts that firms can induce worker effort by the carrot of high wages and/or the stick of monitoring worker performance. Another option available to firms is totiltthe remuneration package over time such that the lure of high future earnings acts as a deterrent to current shirking. On the assumption that firms strive for the optimal trade-off between these various instruments, we develop a two-period model of efficiency wages in which increased monitoring attenuates the gradient of the wage-tenure profile. Our empirical analysis, using two cross sections of matched employer-employee British data, provides robust support for this prediction.

Keywords: Monitoring; tenure; efficiency wages; J33; J41; J54 (search for similar items in EconPapers)
Date: 2014
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Related works:
Working Paper: Tenure, Wage Profiles and Monitoring (2009)
Working Paper: Tenure, Wage Profiles and Monitoring (2009)
Working Paper: Tenure, Wage Profiles and Monitoring (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:eme:rleczz:s0147-9121(2013)0000038004

DOI: 10.1108/S0147-9121(2013)0000038004

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