Performance Pay and Applicant Screening

Uwe Jirjahn and Jens Mohrenweiser

No 2015-11, Research Papers in Economics from University of Trier, Department of Economics

Abstract: Using German establishment data, we show that the relationship between performance pay and intensity of applicant screening depends on the nature of production. In establishments with increased multitasking, performance pay is associated with a greater intensity of applicant screening. In establishments without increased multitasking, it is associated with a reduced intensity. The findings fit the hypothesis that performance pay induces a positive self-sorting of employees if jobs are less multifaceted. In this case, employers using performance pay need no intense applicant screening to ensure a high quality of matches between workers and jobs. However, if jobs are more multifaceted, performance pay can entail problems of adverse self-sorting. In order to mitigate or overcome these problems, employers tying pay to performance screen applicants more intensely.

Keywords: Performance pay; multitasking; self-sorting; applicant screening; non-managerial employees; managerial employees (search for similar items in EconPapers)
JEL-codes: J33 J60 M51 M52 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2015
New Economics Papers: this item is included in nep-eur and nep-hrm
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http://www.uni-trier.de/fileadmin/fb4/prof/VWL/EWF/Research_Papers/2015-11.pdf First version, 2015 (application/pdf)

Related works:
Journal Article: Performance Pay and Applicant Screening (2019)
Working Paper: Performance Pay and Applicant Screening (2017)
Working Paper: Performance Pay and Applicant Screening (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:trr:wpaper:201511

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