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When Galatea cares about her Reputation: How having Faith in your Workers reduces their Motivation to shine

Jurjen Kamphorst () and Otto Swank ()

No 10-123/1, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: This discussion paper led to a publication in the European Economic Review (2013). Vol. 60, pp. 91-104.

We develop a theory of leadership that focuses on the role managers play in motivating employees through their attitude towards employees. We model a manager's attitude as her perception about employees' abilities of successfully completing challenging tasks. We show that a positive attitude motivates employees who are driven by monetary rewards. A negative attitude may motivate employees who are driven by concerns about their reputation for being able. When employees are driven by monetary rewards and care about their reputations, an increase in the reward for successfully completing challenging tasks may lead employees to shy away from these tasks.

Keywords: reputation; worker motivation; task choice; principle-agent; Giffen goods (search for similar items in EconPapers)
JEL-codes: D82 M59 (search for similar items in EconPapers)
Date: 2010-12-07
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