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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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Cited by:
  1. Matteo Bassi & Marco Pagnozzi & Salvatore Piccolo, 2013. "Optimal Contracting with Altruism and Reciprocity," CSEF Working Papers, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy 342, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  2. Doerrenberg, Philipp & Duncan, Denvil, 2012. "Experimental Evidence on the Relationship between Tax Evasion Opportunities and Labor Supply," IZA Discussion Papers 6914, Institute for the Study of Labor (IZA).
  3. Axel Ockenfels & Dirk Sliwka & Peter Werner, 2014. "Timing of Kindness - Evidence from a Field Experiment," CESifo Working Paper Series 4885, CESifo Group Munich.
  4. Gill, David & Prowse, Victoria L., 2011. "A Novel Computerized Real Effort Task Based on Sliders," IZA Discussion Papers 5801, Institute for the Study of Labor (IZA).
  5. Janna Ter Meer, 2014. "The indirect effect of monetary incentives on deception," Cologne Graduate School Working Paper Series, Cologne Graduate School in Management, Economics and Social Sciences 05-04, Cologne Graduate School in Management, Economics and Social Sciences.
  6. repec:clg:wpaper:2013-27 is not listed on IDEAS

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