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Base Salaries, Bonus Payments, and Work Absence among Managers in a German Company

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  • Pfeifer, Christian

    (Leuphana University Lüneburg)

Abstract

Questions about compensation structures and incentive effects of pay-for-performance components are important for firms' Human Resource Management as well as for economics in general and labor economics in particular. This paper provides scarce insider econometric evidence on the structure and the incentive effects of fixed base salaries, paid bonuses, and agreed bonuses under a Management-by-Objectives (MBO) incentive scheme. Six years of personnel data of 177 managers in a German company are analyzed. The main findings are: (1) base salaries increase significantly with age, whereas bonuses decrease with age; (2) larger agreed bonuses are correlated with fewer absent working days.

Suggested Citation

  • Pfeifer, Christian, 2012. "Base Salaries, Bonus Payments, and Work Absence among Managers in a German Company," IZA Discussion Papers 7088, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp7088
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    Cited by:

    1. K. Sommerfeld, 2013. "Higher and higher? Performance pay and wage inequality in Germany," Applied Economics, Taylor & Francis Journals, vol. 45(30), pages 4236-4247, October.
    2. Wolter Hassink, 2018. "How to reduce workplace absenteeism," IZA World of Labor, Institute of Labor Economics (IZA), pages 447-447, September.

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    More about this item

    Keywords

    wages; insider econometrics; absenteeism; bonus; effort; incentives;
    All these keywords.

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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