Advanced Search
MyIDEAS: Login to save this paper or follow this series

Peer Evaluation: Incentives and Co-Worker Relations

Contents:

Author Info

  • Joeri Sol

    (Erasmus University Rotterdam)

Registered author(s):

    Abstract

    In many workplaces co-workers have the best information about each other's effort. Managers may attempt to exploit this information through peer evaluation. I study peer evaluation in a pure moral hazard model of production by two limitedly liable agents. Agents receive a signal about their colleague's effort level, and are asked to report it to the principal. The principal may give an individual bonus for the receipt of a positive evaluation by a colleague, which stimulates effort as long as signals are revealed truthfully. A cost of lying ascertains that there can be truthful revelation. I show that interpersonal relations between colleagues constrain the bonus for receiving a positive evaluation in order to keep evaluations truthful. Still, the principal will always include such a bonus in the optimal contract, and possibly complement it with a team bonus. Co-worker relations have non-monotic effects on profits in the optimal contract.

    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://papers.tinbergen.nl/10055.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 10-055/1.

    as in new window
    Length:
    Date of creation: 28 May 2010
    Date of revision:
    Handle: RePEc:dgr:uvatin:20100055

    Contact details of provider:
    Web page: http://www.tinbergen.nl

    Related research

    Keywords: peer evaluation; peer appraisal; incentive contracts; co-worker relations; likeability bias;

    Find related papers by JEL classification:

    This paper has been announced in the following NEP Reports:

    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. Sjaak Hurkens & Navin Kartik, 2009. "Would I lie to you? On social preferences and lying aversion," Experimental Economics, Springer, Springer, vol. 12(2), pages 180-192, June.
    2. Robert Dur & Joeri Sol, 2008. "Social Interaction, Co-Worker Altruism, and Incentives," CESifo Working Paper Series 2476, CESifo Group Munich.
    3. Jeffrey Carpenter & Peter Hans Matthews & John Schirm, 2007. "TOURNAMENTS AND OFFICE POLITICS: Evidence from a real effort experiment," Middlebury College Working Paper Series 0709, Middlebury College, Department of Economics.
    4. Navin Kartik, 2009. "Strategic Communication with Lying Costs," Review of Economic Studies, Oxford University Press, vol. 76(4), pages 1359-1395.
    5. Carmichael, H Lorne, 1988. "Incentives in Academics: Why Is There Tenure?," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 96(3), pages 453-72, June.
    6. Leslie M. Marx & Francesco Squintani, 2002. "Individual Accountability in Teams," RCER Working Papers 494, University of Rochester - Center for Economic Research (RCER).
    7. Ma, Ching-To, 1988. "Unique Implementation of Incentive Contracts with Many Agents," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 55(4), pages 555-72, October.
    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. Arjan Non, 2010. "Gift-Exchange, Incentives, and Heterogeneous Workers," Tinbergen Institute Discussion Papers 10-008/1, Tinbergen Institute, revised 31 May 2011.

    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:dgr:uvatin:20100055. 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: (Antoine Maartens (+31 626 - 160 892)).

    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.