EconPapers    
Economics at your fingertips  
 

The Timing of Discretionary Bonuses: Effort, Signals, and Reciprocity

Luke Boosey and Sebastian Goerg ()

No 11580, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: In a real-effort experiment, we investigate how the timing of discretionary bonuses affects the relationship between workers and managers. Average output is substantially higher if bonuses are paid in the middle rather than upfront or at the end, as workers increase first-period output to signal trustworthiness. In contrast, average output does not differ when the decision is made at the beginning or end. When the decision is made upfront, output increases after receiving a bonus but decreases substantially, if the bonus is not paid. This is consistent with negative reciprocity by workers who anticipate, but do not receive a bonus.

Keywords: experiment; timing; discretionary bonuses; reciprocity (search for similar items in EconPapers)
JEL-codes: M5 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-exp and nep-hrm
Date: 2018-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://ftp.iza.org/dp11580.pdf (application/pdf)

Related works:
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:iza:izadps:dp11580

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().

 
Page updated 2019-10-22
Handle: RePEc:iza:izadps:dp11580