Incentives and Promotion in Wage Hierarchies
AbstractMost of the large firms organization schemes consist in hierarchical structures of tiers with different wage levels. Traditionally the existence of this kind of organizations has been associated to the separation of productive and managerial or supervision tasks and to differences in the skills of the workers. However, many firms now employ workers with similar skills, and then the hierarchical structure can be related to an incentive scheme to ensure that workers supply effort. The model we present investigates how firm owners should determine the optimal wage distribution in order to maximize profits.
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Bibliographic InfoPaper provided by Universitat de Barcelona. Espai de Recerca en Economia in its series Working Papers in Economics with number 185.
Length: 22 pages
Date of creation: 2007
Date of revision:
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Find related papers by JEL classification:
- M11 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Production Management
- L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
- M51 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Firm Employment Decisions; Promotions
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-11-24 (All new papers)
- NEP-BEC-2007-11-24 (Business Economics)
- NEP-LAB-2007-11-24 (Labour Economics)
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