Advanced Search
MyIDEAS: Login to save this article or follow this journal

Cheating in the workplace: An experimental study of the impact of bonuses and productivity

Contents:

Author Info

  • Gill, David
  • Prowse, Victoria
  • Vlassopoulos, Michael

Abstract

We use an online real-effort experiment to investigate how bonus-based pay and worker productivity interact with workplace cheating. Firms often use bonus-based compensation plans, such as group bonuses and firm-wide profit sharing, that induce considerable uncertainty in how much workers are paid. Exposing workers to a compensation scheme based on random bonuses makes them cheat more but has no effect on their productivity. We also find that more productive workers behave more dishonestly. These results are consistent with workers’ cheating behavior responding to the perceived fairness of their employer's compensation scheme.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/pii/S0167268113002436
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 96 (2013)
Issue (Month): C ()
Pages: 120-134

as in new window
Handle: RePEc:eee:jeborg:v:96:y:2013:i:c:p:120-134

Contact details of provider:
Web page: http://www.elsevier.com/locate/jebo

Related research

Keywords: Bonus; Compensation; Cheating; Dishonesty; Lying; Employee crime; Productivity; Slider task; Real effort; Experiment;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Bhattacherjee, Debashish, 2003. "The Effects of Group Incentives in an Indian Firm - Evidence from Payroll Data," Working Papers 03-14, University of Aarhus, Aarhus School of Business, Department of Economics.
  2. Abeler, Johannes & Becker, Anke & Falk, Armin, 2012. "Truth-Telling: A Representative Assessment," IZA Discussion Papers 6919, Institute for the Study of Labor (IZA).
  3. Lewis, Alan & Bardis, Alexander & Flint, Chloe & Mason, Claire & Smith, Natalya & Tickle, Charlotte & Zinser, Jennifer, 2012. "Drawing the line somewhere: An experimental study of moral compromise," Journal of Economic Psychology, Elsevier, vol. 33(4), pages 718-725.
  4. Christiane Schwieren & Doris Weichselbaumer, 2008. "Does competition enhance performance or cheating? A laboratory experiment," Economics working papers 2008-01, Department of Economics, Johannes Kepler University Linz, Austria.
  5. Giorgio Coricelli & Matteus Joffily & Claude Montmarquette & Marie Claire Villeval, 2010. "Cheating, Emotions, and Rationality: An Experiment on Tax Evasion," Post-Print halshs-00462067, HAL.
  6. Gill, David & Prowse, Victoria L., 2011. "A Novel Computerized Real Effort Task Based on Sliders," IZA Discussion Papers 5801, Institute for the Study of Labor (IZA).
  7. Conrads, Julian & Irlenbusch, Bernd & Rilke, Rainer Michael & Walkowitz, Gari, 2011. "Lying and Team Incentives," IZA Discussion Papers 5968, Institute for the Study of Labor (IZA).
  8. Gill, David & Prowse, Victoria, 2012. "Gender differences and dynamics in competition: the role of luck," MPRA Paper 38220, University Library of Munich, Germany.
  9. Daniel Nagin & James Rebitzer & Seth Sanders & Lowell Taylor, 2002. "Monitoring, Motivation and Management: The Determinants of Opportunistic Behavior in a Field Experiment," NBER Working Papers 8811, National Bureau of Economic Research, Inc.
  10. Scott M. Gilpatric, 2011. "Cheating In Contests," Economic Inquiry, Western Economic Association International, vol. 49(4), pages 1042-1053, October.
  11. Gill, David & Prowse, Victoria L., 2009. "A Structural Analysis of Disappointment Aversion in a Real Effort Competition," IZA Discussion Papers 4536, Institute for the Study of Labor (IZA).
  12. Knez, Marc & Simester, Duncan, 2001. "Firm-Wide Incentives and Mutual Monitoring at Continental Airlines," Journal of Labor Economics, University of Chicago Press, vol. 19(4), pages 743-72, October.
  13. Dreber, Anna & Johannesson, Magnus, 2008. "Gender differences in deception," Economics Letters, Elsevier, vol. 99(1), pages 197-199, April.
  14. Daniel Houser & Stefan Vetter & Joachim Winter, 2011. "Fairness and Cheating," Working Papers 1019, George Mason University, Interdisciplinary Center for Economic Science.
  15. Gerald Eisenkopf & Ruslan Gurtoviy & Verena Utikal, 2011. "Size matters - when it comes to lies," TWI Research Paper Series 66, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
  16. Oyer, Paul, 2001. "Why Do Firms Use Incentives That Have No Incentive Effects?," Research Papers 1686, Stanford University, Graduate School of Business.
  17. Joseph Tao-yi Wang & Michael Spezio & Colin F. Camerer, 2010. "Pinocchio's Pupil: Using Eyetracking and Pupil Dilation to Understand Truth Telling and Deception in Sender-Receiver Games," American Economic Review, American Economic Association, vol. 100(3), pages 984-1007, June.
  18. Urs Fischbacher & Franziska Föllmi-Heusi, 2013. "Lies In Disguise—An Experimental Study On Cheating," Journal of the European Economic Association, European Economic Association, vol. 11(3), pages 525-547, 06.
  19. Croson, Rachel & Boles, Terry & Murnighan, J. Keith, 2003. "Cheap talk in bargaining experiments: lying and threats in ultimatum games," Journal of Economic Behavior & Organization, Elsevier, vol. 51(2), pages 143-159, June.
  20. Efendi, Jap & Srivastava, Anup & Swanson, Edward P., 2007. "Why do corporate managers misstate financial statements? The role of option compensation and other factors," Journal of Financial Economics, Elsevier, vol. 85(3), pages 667-708, September.
  21. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-64, October.
  22. Dickens, William T, et al, 1989. "Employee Crime and the Monitoring Puzzle," Journal of Labor Economics, University of Chicago Press, vol. 7(3), pages 331-47, July.
  23. Brian J. Hall & Jeffrey B. Liebman, 1998. "Are CEOs Really Paid Like Bureaucrats?," The Quarterly Journal of Economics, MIT Press, vol. 113(3), pages 653-691, August.
  24. Gino, Francesca & Schweitzer, Maurice E. & Mead, Nicole L. & Ariely, Dan, 2011. "Unable to resist temptation: How self-control depletion promotes unethical behavior," Organizational Behavior and Human Decision Processes, Elsevier, vol. 115(2), pages 191-203, July.
  25. Moers, Frank, 2005. "Discretion and bias in performance evaluation: the impact of diversity and subjectivity," Accounting, Organizations and Society, Elsevier, vol. 30(1), pages 67-80, January.
  26. Charness, Gary & Dufwenberg, Martin, 2003. "Promises & Partnership," Research Papers in Economics 2003:3, Stockholm University, Department of Economics.
  27. Gary Charness & Martin Dufwenberg, 2004. "Promises and Partnership," Levine's Bibliography 122247000000000001, UCLA Department of Economics.
  28. Brian A. Jacob & Steven D. Levitt, 2003. "Rotten Apples: An Investigation Of The Prevalence And Predictors Of Teacher Cheating," The Quarterly Journal of Economics, MIT Press, vol. 118(3), pages 843-877, August.
  29. Li Hao & Daniel Houser, 2011. "Honest Lies," Working Papers 1021, George Mason University, Interdisciplinary Center for Economic Science.
  30. Mead, N.L. & Baumeister, R.F. & Gino, F. & Schweitzer, M.E. & Ariely, D., 2009. "Too tired to tell the truth: Self-control resource depletion and dishonesty," Open Access publications from Tilburg University urn:nbn:nl:ui:12-3557352, Tilburg University.
  31. Urs Fischbacher & Verena Utikal, 2011. "Disadvantageous lies in individual decisions," TWI Research Paper Series 71, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
  32. James Konow, 2003. "Which Is the Fairest One of All? A Positive Analysis of Justice Theories," Journal of Economic Literature, American Economic Association, vol. 41(4), pages 1188-1239, December.
  33. Gerhard Riener & Simon Wiederhold, 2011. "On Social Identity, Subjective Expectations, and the Costs of Control," Jena Economic Research Papers 2011-035, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  34. Michael C. Jensen, 2003. "Paying People to Lie: the Truth about the Budgeting Process," European Financial Management, European Financial Management Association, vol. 9(3), pages 379-406.
  35. Paul Oyer & Scott Schaefer, 2004. "Why Do Some Firms Give Stock Options to All Employees?: An Empirical Examination of Alternative Theories," NBER Working Papers 10222, National Bureau of Economic Research, Inc.
  36. Marianne Bertrand & Sendhil Mullainathan, 2001. "Are Ceos Rewarded For Luck? The Ones Without Principals Are," The Quarterly Journal of Economics, MIT Press, vol. 116(3), pages 901-932, August.
  37. Philip A. Curry & Steeve Mongrain, 2007. "Deterrence in Rank-Order Tournaments," Discussion Papers dp07-04, Department of Economics, Simon Fraser University.
  38. Core, John E. & Guay, Wayne R., 2001. "Stock option plans for non-executive employees," Journal of Financial Economics, Elsevier, vol. 61(2), pages 253-287, August.
  39. Gary Charness & Nuno Garoupa, 2000. "Reputation, Honesty, and Efficiency with Insider Information: an Experiment," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 9(3), pages 425-451, 06.
  40. Trautmann, Stefan T., 2009. "A tractable model of process fairness under risk," Journal of Economic Psychology, Elsevier, vol. 30(5), pages 803-813, October.
  41. Lundquist, Tobias & Ellingsen, Tore & Gribbe, Erik & Johannesson, Magnus, 2009. "The aversion to lying," Journal of Economic Behavior & Organization, Elsevier, vol. 70(1-2), pages 81-92, May.
  42. Bucciol, Alessandro & Piovesan, Marco, 2011. "Luck or cheating? A field experiment on honesty with children," Journal of Economic Psychology, Elsevier, vol. 32(1), pages 73-78, February.
  43. Cadsby C. Bram & Song Fei & Tapon Francis, 2010. "Are You Paying Your Employees to Cheat? An Experimental Investigation," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-32, April.
  44. Sanjiv Erat & Uri Gneezy, 2012. "White Lies," Management Science, INFORMS, vol. 58(4), pages 723-733, April.
  45. Gary Charness & David I. Levine, 2007. "Intention and Stochastic Outcomes: An Experimental study," Economic Journal, Royal Economic Society, vol. 117(522), pages 1051-1072, 07.
  46. Hammermann, Andrea & Mohnen, Alwine & Nieken, Petra, 2012. "Whom to Choose as a Team Mate? A Lab Experiment about In-Group Favouritism," IZA Discussion Papers 6286, Institute for the Study of Labor (IZA).
  47. Shalvi, Shaul & Dana, Jason & Handgraaf, Michel J.J. & De Dreu, Carsten K.W., 2011. "Justified ethicality: Observing desired counterfactuals modifies ethical perceptions and behavior," Organizational Behavior and Human Decision Processes, Elsevier, vol. 115(2), pages 181-190, July.
  48. Uri Gneezy, 2005. "Deception: The Role of Consequences," American Economic Review, American Economic Association, vol. 95(1), pages 384-394, March.
  49. Burns, Natasha & Kedia, Simi, 2006. "The impact of performance-based compensation on misreporting," Journal of Financial Economics, Elsevier, vol. 79(1), pages 35-67, January.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Axel Ockenfels & Dirk Sliwka & Peter Werner, 2014. "Timing of Kindness - Evidence from a Field Experiment," CESifo Working Paper Series 4885, CESifo Group Munich.
  2. Matteo Bassi & Marco Pagnozzi & Salvatore Piccolo, 2013. "Optimal Contracting with Altruism and Reciprocity," CSEF Working Papers 342, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  3. Gill, David & Prowse, Victoria, 2011. "A novel computerized real effort task based on sliders," Discussion Paper Series In Economics And Econometrics 1101, Economics Division, School of Social Sciences, University of Southampton.
  4. Doerrenberg, Philipp & Duncan, Denvil, 2014. "Experimental evidence on the relationship between tax evasion opportunities and labor supply," European Economic Review, Elsevier, vol. 68(C), pages 48-70.
  5. David Cooper & David Johnson, 2013. "Ambiguity in Performance Pay: An Online Experiment," Working Papers 2013-27, Department of Economics, University of Calgary, revised 14 Nov 2013.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:jeborg:v:96:y:2013:i:c:p:120-134. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.