EconPapers    
Economics at your fingertips  
 

Yes, Managers Should Be Paid Like Bureaucrats

Bruno Frey and Margit Osterloh

No 1379, CESifo Working Paper Series from CESifo

Abstract: Corporate scandals, reflected in excessive management compensation and fraudulent accounts, cause considerable damage. Agency theory’s insistence on linking the compensation of managers and directors as closely as possible to firm performance is a major reason for these scandals. They cannot be overcome by improving variable pay for performance, as selfish extrinsic motivation is reinforced. Based on the common pool approach to the firm, institutions are proposed which serve to raise intrinsically motivated corporate virtue. More importance is to be attributed to fixed pay and strengthening the legitimacy of authorities by procedural fairness, relational contracts and organizational citizenship behavior.

Keywords: agency theory; intrinsic motivation; crowding theory; management compensation; pay for performance; organizational citizenship (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-acc, nep-bec and nep-ltv
References: Add references at CitEc
Citations: View citations in EconPapers (61) Track citations by RSS feed

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp1379.pdf (application/pdf)

Related works:
Working Paper: Yes, Managers Should Be Paid Like Bureaucrats (2004) Downloads
Working Paper: Yes, Managers Should be Paid Like Bureaucrats Downloads
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:ces:ceswps:_1379

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().

 
Page updated 2024-02-17
Handle: RePEc:ces:ceswps:_1379