Reciprocity and Incentive Pay in the Workplace

Robert Dur, Arjan Non and Hein Roelfsema ()

No 4782, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We study optimal incentive contracts for workers who are reciprocal to management attention. When neither worker's effort nor manager's attention can be contracted, a double moral-hazard problem arises, implying that reciprocal workers should be given weak financial incentives. In a multiple-agent setting, this problem can be resolved using promotion incentives. We empirically examine these predictions using data from the German Socio-Economic Panel. We find that workers who are more reciprocal are significantly more likely to receive promotion incentives, while there is no such relation for individual bonus pay.

Keywords: double moral hazard; GSOEP; social exchange; reciprocity; incentive contracts (search for similar items in EconPapers)
JEL-codes: D86 J41 M51 M52 M54 M55 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2010-02
New Economics Papers: this item is included in nep-bec, nep-cta, nep-lab and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (56)

Published - published in: Journal of Economic Psychology, 2010, 31 (4), 676-686

Downloads: (external link)
https://docs.iza.org/dp4782.pdf (application/pdf)

Related works:
Journal Article: Reciprocity and incentive pay in the workplace (2010)
Working Paper: Reciprocity and Incentive Pay in the Workplace (2009)
Working Paper: Reciprocity and Incentive Pay in the Workplace (2008)
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:dp4782

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 ().