Redesigning Teams and Incentives:A Real Effort Experiment with Managers of a Merged Company

Claude Montmarquette, Jean-Louis Rullière (), Marie Claire Villeval and Romain Zeiliger
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Romain Zeiliger: GATE - Groupe d'analyse et de théorie économique - UL2 - Université Lumière - Lyon 2 - ENS LSH - Ecole Normale Supérieure Lettres et Sciences Humaines - CNRS - Centre National de la Recherche Scientifique

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Abstract: After a merger, company officials face the challenge to uniform compensation schemes and to redesign teams with managers originating from different incentives and working habits. In this paper, we offer a new way to investigate in post-merger the relationship between executive pay and performance, allowing to dissociate the respective influence of shifts occurring both in compensation incentives and in team composition. The results of a real effort experiment conducted with managers within a large pharmaceutical company show that not only changes in compensation incentives affect performance but also that both managers' past compensation schemes and company cultures matter for cooperation. The efficiency of a new compensation package is conditional on the reshuffling of teams and the past of incentives within the new teams.

Keywords: executive compensation; real effort experiments; team-based compensation; expérience à effort réel; rémunération d'équipe; rémunération des cadres (search for similar items in EconPapers)
Date: 2002-12
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00178471
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Published in 2002

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Related works:
Working Paper: Redesigning Teams and Incentives: A Real Effort Experiment with Managers of a Merged Company (2003)
Working Paper: Redesigning Teams and Incentives: A Real Effort Experiment with Managers of a Merged Company (2003)
Working Paper: Redesigning Teams and Incentives: A Real Effort Experiment with Managers of a Merged Company (2003)
Working Paper: Redesigning Teams and Incentives: A Real Effort Experiment with Managers of a Merged Company (2003)
Working Paper: Redesigning Teams and Incentives: A Real Effort Experiment with Managers of a Merged Company (2003)
Working Paper: Redesigning Teams and Incentives: A Real Effort Experiment with Managers of a Merged Company (2002)
Working Paper: Redesigning Teams and Incentives: A Real Effort Experiment with Managers of a Merged Company (2002)
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