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Incentives and individual motivation in supervised work groups

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  • Dal Forno, Arianna
  • Merlone, Ugo

Abstract

This paper introduces and analyzes a model of supervised work group where subordinates decide how to exert their effort in complementary tasks while the supervisors decide incentives. Incentives may be a combination of individual and group-based ones. The optimality of incentives is analyzed when considering two different cost functions for subordinates. The two cost functions describe different individual motivations; comparing the resulting effort allocations and production optimality, we can relate them to different organizational theories. Our results provide a measure of how motivation among subordinates may affect production and incentives. Furthermore, the optimal incentives schemes are examined in terms of Adams' equity theory.

Suggested Citation

  • Dal Forno, Arianna & Merlone, Ugo, 2010. "Incentives and individual motivation in supervised work groups," European Journal of Operational Research, Elsevier, vol. 207(2), pages 878-885, December.
    • Handle: RePEc:eee:ejores:v:207:y:2010:i:2:p:878-885
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    1. Dal Forno, Arianna & Merlone, Ugo, 2010. "Effort dynamics in supervised work groups," Journal of Economic Behavior & Organization, Elsevier, vol. 75(3), pages 413-425, September.
    2. Wu, Zhengping & Crama, Pascale & Zhu, Wanshan, 2012. "The newsvendor’s optimal incentive contracts for multiple advertisers," European Journal of Operational Research, Elsevier, vol. 220(1), pages 171-181.
    3. Arianna Dal Forno & Ugo Merlone, 2021. "Envy effects on conflict dynamics in supervised work groups," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 44(2), pages 755-779, December.
    4. Han, Jinhui & Ma, Guiyuan & Yam, Sheung Chi Phillip, 2022. "Relative performance evaluation for dynamic contracts in a large competitive market," European Journal of Operational Research, Elsevier, vol. 302(2), pages 768-780.
    5. Berr, Fabian, 2011. "Stackelberg equilibria in managerial delegation games," European Journal of Operational Research, Elsevier, vol. 212(2), pages 251-262, July.
    6. Enrico Rinaldi & Setyo Riyanto, 2021. "The effect of work motivation, work environment, and job satisfaction on organizational citizenship behavior and their impact on employees performance of RSU Menteng Mitra Afia during the Covid-19 pan," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 10(6), pages 101-110, September.

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