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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.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7088.

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Length: 28 pages
Date of creation: Dec 2012
Date of revision:
Publication status: forthcoming in: Scottish Journal of Political Economy
Handle: RePEc:iza:izadps:dp7088

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Keywords: incentives; effort; bonus; absenteeism; insider econometrics; wages;

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References

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Cited by:
  1. Katrin Sommerfeld, 2012. "Higher and Higher?: Performance Pay and Wage Inequality in Germany," SOEPpapers on Multidisciplinary Panel Data Research 476, DIW Berlin, The German Socio-Economic Panel (SOEP).

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