Retracting a Gift: How Does Employee Effort Respond to Wage Reductions?
AbstractSince the days of Henry Ford, employers have argued that higher pay induces employees to provide additional effort. While the converse is also thought to be true, there is little empirical evidence testing this hypothesis. Not only are significant company-wide pay cuts rarely observed in practice but measures of employee effort are typically difficult to quantify. This article examines the effort responses of U.S. commercial airline pilots following a recent series of large, permanent pay cuts. Using airline on-time performance as proxy for unobservable pilot effort, we find only limited support for the hypothesis that pay cuts lower employee effort.
Download InfoIf 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.
Bibliographic InfoArticle provided by University of Chicago Press in its journal Journal of Labor Economics.
Volume (Year): 25 (2007)
Issue (Month): ()
Contact details of provider:
Web page: http://www.journals.uchicago.edu/JOLE/
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Brandes, Leif & Franck, Egon, 2012.
"Social preferences or personal career concerns? Field evidence on positive and negative reciprocity in the workplace,"
Journal of Economic Psychology,
Elsevier, vol. 33(5), pages 925-939.
- Leif Brandes & Egon Franck, . "Social Preferences or Personal Career Concerns? Field Evidence on Positive and Negative Reciprocity in the Workplace," Working Papers 0134, University of Zurich, Institute for Strategy and Business Economics (ISU).
- Yang, Sheng-Ping & DeBeaumont, Ronald, 2010. "Pay as incentive or pay as reward? The case of Taiwan," Journal of Asian Economics, Elsevier, vol. 21(1), pages 76-86, February.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division).
If references are entirely missing, you can add them using this form.