On Take-Off Bonus Rate

Shigetaka Yamakawa

Working Papers from Rochester, Business - Quantitative Methods Working Paper Series

Abstract: A bonus scheme for tenure systems in which the total wage consists of the base wage and the bonus proportional to the excess production more than the minimum requirement is considered. The existence of the take-off bonus rate below which the employee does not response to the increase of the bonus rate is pointed out in this paper. Other characteristics of the take-off rate and the optimal effort level of the employee are observed and impications for tenured workers of Japanese life-time employment system are provided.

Keywords: INCENTIVES; WAGES (search for similar items in EconPapers)
JEL-codes: J31 J33 (search for similar items in EconPapers)
Pages: 17 pages
Date: 1996
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Persistent link: https://EconPapers.repec.org/RePEc:fth:robuqm:96-01

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