Wage Delegation in the Field

Sabrina Jeworrek and Vanessa Mertins

No 201408, IAAEU Discussion Papers from Institute of Labour Law and Industrial Relations in the European Union (IAAEU)

Abstract: By conducting a natural field experiment, we test whether a managerial policy of allowing employees to self-determine their wages is as successful as recently suggested by laboratory evidence. We find that this policy indeed enhances performance. However, our data is clearly at odds with the conjecture of Pareto improvements, since labor costs grow even faster. Admittedly, the performance change is remarkable given that a considerable pay increase has no effect at all. Surprisingly, the data suggests that explicitly denying parts of the workforce this choice boosts performance, too. Additional experimental and survey data provides important insights into employees' underlying motivations.

Keywords: Field experiment; Delegation; Reciprocity; Responsibility alleviation; Compensation; Worker empowerment; Workplace democracy (search for similar items in EconPapers)
JEL-codes: C91 C93 J33 M52 M54 (search for similar items in EconPapers)
Date: 2014-05
New Economics Papers: this item is included in nep-exp, nep-hrm, nep-lab and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.iaaeg.de/images/DiscussionPaper/2014_08.pdf First version, 2014 (application/pdf)

Related works:
Journal Article: Wage delegation in the field (2019)
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:iaa:dpaper:201408

Access Statistics for this paper

More papers in IAAEU Discussion Papers from Institute of Labour Law and Industrial Relations in the European Union (IAAEU) Contact information at EDIRC.
Bibliographic data for series maintained by Adrian Chadi ().