Bonus Payments and Reference Point Violations

Axel Ockenfels, Dirk Sliwka and Peter Werner

No 4795, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We investigate how bonus payments affect satisfaction and performance of managers in a large, multinational company. We find that falling behind a naturally occurring reference point for bonus comparisons reduces satisfaction and subsequent performance. The effects tend to be mitigated if information about one's relative standing towards the reference point is withheld.

Keywords: job performance; job satisfaction; bonus payments; incentives; reference points (search for similar items in EconPapers)
JEL-codes: D03 M52 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2010-02
New Economics Papers: this item is included in nep-bec, nep-cta and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (34)

Published - published in: Management Science, 2015, 61 (7), 1496-1513

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Journal Article: Bonus Payments and Reference Point Violations (2015)
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