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Cheating in the Workplace: An Experimental Study of the Impact of Bonuses and Productivity

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Author Info

  • Gill, David

    ()
    (University of Oxford)

  • Prowse, Victoria L.

    ()
    (Cornell University)

  • Vlassopoulos, Michael

    ()
    (University of Southampton)

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. We explain how these results suggest that workers' cheating behavior responds to the perceived fairness of their employer's compensation scheme.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6725.

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Length: 23 pages
Date of creation: Jul 2012
Date of revision:
Publication status: published in: Journal of Economic Behavior and Organization, 2013, 96 (December), 120-134
Handle: RePEc:iza:izadps:dp6725

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Keywords: real effort; compensation; cheating; dishonesty; lying; employee crime; productivity; bonus; slider task; experiment;

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References

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Citations

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Cited by:
  1. Janna Ter Meer, 2014. "The indirect effect of monetary incentives on deception," Cologne Graduate School Working Paper Series 05-04, Cologne Graduate School in Management, Economics and Social Sciences.
  2. 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.
  3. Victoria Prowse & David Gill, 2009. "A Novel Computerized Real Effort Task Based on Sliders," Economics Series Working Papers 435, University of Oxford, Department of Economics.
  4. Matthias Efing & Harald Hau & Patrick Kampkötter & Johannes Steinbrecher, 2014. "Incentive Pay and Bank Risk-Taking: Evidence from Austrian, German, and Swiss Banks," NBER Working Papers 20468, National Bureau of Economic Research, Inc.
  5. repec:clg:wpaper:2013-27 is not listed on IDEAS
  6. Axel Ockenfels & Dirk Sliwka & Peter Werner, 2014. "Timing of Kindness - Evidence from a Field Experiment," CESifo Working Paper Series 4885, CESifo Group Munich.
  7. Bassi, Matteo & Pagnozzi, Marco & Piccolo, Salvatore, 2014. "Optimal contracting with altruism and reciprocity," Research in Economics, Elsevier, vol. 68(1), pages 27-38.

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