Discretion, Productivity and Work Satisfaction

Björn Bartling, Ernst Fehr and Klaus M. Schmidt

Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems from Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich

Abstract: In Bartling, Fehr and Schmidt (2012) we show theoretically and experimentally that it is optimal to grant discretion to workers if (i) discretion increases productivity, (ii) workers can be screened by past performance, (iii) some workers reciprocate high wages with high effort and (iv) employers pay high wages leaving rents to their workers. In this paper we show experimentally that the productivity increase due to discretion is not only sufficient but also necessary for the optimality of granting discretion to workers. Furthermore, we report representative survey evidence on the impact of discretion on workers’ welfare, confirming that workers earn rents.

Keywords: high-performance work systems; wages; discretion; gift exchange; job satisfaction (search for similar items in EconPapers)
JEL-codes: J3 M5 (search for similar items in EconPapers)
Date: 2012-06
New Economics Papers: this item is included in nep-cbe, nep-hap, nep-hrm, nep-lab and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Discretion, Productivity, and Work Satisfaction (2013)
Working Paper: Discretion, productivity, and work satisfaction (2013)
Working Paper: Discretion, Productivity, and Work Satisfaction (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:trf:wpaper:383

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