Workplace Incentives and Organizational Learning

Francesco Amodio and Miguel Martinez-Carrasco

No 13898, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper studies learning within organizations when incentives change. We use a simple principal-agent model to show how, in the presence of imperfect information over the shape of the production function, worker's effort choice changes over time as information is disclosed and processed. We also show that changes in workers compensation can trigger such learning process. We test this hypothesis using personnel records from a Peruvian egg production plant. Exploiting a sudden change in the compensation schedule, we find that workers learn from each other over the shape of the production function. This adjustment process is costly for the firm.

Keywords: organizational learning; workplace incentives; inputs (search for similar items in EconPapers)
JEL-codes: D22 D24 J24 J33 M11 M52 M54 O12 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2020-11
New Economics Papers: this item is included in nep-hrm, nep-lma and nep-ore
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Published - published in: Journal of Labor Economics 2023, 41 (2), 453-478

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Related works:
Journal Article: Workplace Incentives and Organizational Learning (2023)
Working Paper: Workplace Incentives and Organizational Learning (2020)
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