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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:
Handle: RePEc:iza:izadps:dp6725

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Related research

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

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References

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  1. J Abeler & A Becker & A Falk, 2012. "Truth-telling - A Representative Assessment," Discussion Papers 2012-15, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  2. Trautmann, Stefan T., 2009. "A tractable model of process fairness under risk," Journal of Economic Psychology, Elsevier, vol. 30(5), pages 803-813, October.
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Cited by:
  1. Philipp Doerrenberg & Denvil Duncan, 2012. "Experimental Evidence on the Relationship between Tax Evasion Opportunities and Labor Supply," Cologne Graduate School Working Paper Series 03-10, Cologne Graduate School in Management, Economics and Social Sciences.

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