Compensation and Intrinsic Motivation in Nonprofit and For-Profit Organizations

Jed DeVaro, Nan Maxwell and Hodaka Morita

No 2015-10, CEI Working Paper Series from Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University

Abstract: We develop a theoretical model in which for-profit and nonprofit employers compete to hire a worker who derives intrinsic motivation from the nonprofit’s social mission. We also use a unique data set of California establishments to provide new evidence on sectoral differences in pay and HRM systems, finding a greater incidence of training and benefits in nonprofits, lower wages (with the wage gap increasing in skill level), and less incentive pay than in for-profits. The model is used to interpret both this new evidence and other empirical results from the literature, including the inconclusive sign of the FP-NP wage differential.

Keywords: nonprofits; incentive pay; intrinsic motivation; compensating differentials; fringe benefits; training (search for similar items in EconPapers)
JEL-codes: J33 L29 L30 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2016-03
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Persistent link: https://EconPapers.repec.org/RePEc:hit:hitcei:2015-10

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