Rewarding Carrots & Crippling Sticks: Eliciting Employee Preferences for the Optimal Incentive Mix in Europe

Konstantinos Pouliakas and Ioannis Theodossiou

MPRA Paper from University Library of Munich, Germany

Abstract: A ranking of a variety of incentive devices used by firms according to their perceived effectiveness by employees is identified. The determinants of employee incentive preferences are also investigated, suggesting a ‘menu’ of conditions under which an organization’s personnel policies will have maximum motivational impact on its workforce. Based on the beliefs of a unique sample of workers from seven European countries, the results suggest that (a) the primary determinant of the level of employee effort is the amount of discretion offered at work; (b) pay incentives and ‘gift exchanges’ are the most important motivators; (c) the use of monitoring and Taylor-type assembly lines are the least effective incentives; and (d) the optimal design of incentive strategies by firms is strongly shaped by a host of contextual factors. The expressed desire for autonomy, and distaste for control, by employees gives credibility to the “participative” management approach.

Keywords: Incentives; effectiveness; effort; attitudes; employees (search for similar items in EconPapers)
JEL-codes: C14 J33 M52 M54 (search for similar items in EconPapers)
Date: 2009-03-19
New Economics Papers: this item is included in nep-bec and nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:14167

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