The tenuous relationship between effort and performance pay

A-Tier
Journal: Journal of Public Economics
Year: 2015
Volume: 121
Issue: C
Pages: 32-39

Score contribution per author:

2.011 = (α=2.01 / 2 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

When an agent is offered performance related pay, the incentive effect is not only determined by the shape of the incentive contract, but also by the probability of contract enforcement. We show that weaker enforcement may reduce the agent's effort, but lead to higher-powered incentive contracts. This creates a seemingly negative relationship between effort and performance pay.

Technical Details

RePEc Handle
repec:eee:pubeco:v:121:y:2015:i:c:p:32-39
Journal Field
Public
Author Count
2
Added to Database
2026-01-25