Managing wages: Fairness norms of low- and high-performing team members

Martin Fochmann, Florian Sachs and Joachim Weimann

No 238, arqus Discussion Papers in Quantitative Tax Research from arqus - Arbeitskreis Quantitative Steuerlehre

Abstract: Services are often provided by groups. The question of remuneration arises both at the group level and for each individual group member. We examine the question of how relative pay should be designed within the group if all group members are to regard the payment scheme as fair. We use a three-step laboratory experiment to compare which fairness norms are chosen by high-performing and low-performing group members. It turns out that both types of group members prefer the performance pay principle. Support for equal pay is negligible. However, the low performers use their bargaining power to improve their position, but without deviating from the performance principle substantially. A random influence on the performance of the players does not change the results.

Keywords: performance principle; fairness norms; relative remuneration (search for similar items in EconPapers)
JEL-codes: C91 C92 D31 D90 J31 M52 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-cdm, nep-exp and nep-hrm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:arqudp:238

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