The impact of budget cuts and incentive wages on academic work
AbstractRecent university reforms tend to mean budget cuts, economic incentives at all levels and a more powerful management, in the spirit of the new public management. Performance-based pay is often motivated through the principal-agent theory where agents would provide inadequate efforts under a fixed-wage regime. We amend the principal-agent model by introducing intrinsic motivation as one side of a multiple self. It turns out that the fixed regime can lead to higher creative efforts and a higher output per employee under reasonable circumstances. Performance-based pay leads to motivation crowding out if the wage approaches the threshold level for quitting.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal International Review of Applied Economics.
Volume (Year): 23 (2009)
Issue (Month): 6 ()
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- Johan Willner, 2013. "The welfare impact of a managerial oligopoly with an altruistic firm," Journal of Economics, Springer, vol. 109(2), pages 97-115, June.
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