Economic models of incentives in employment relationships are based on a specific theory of motivation. Employees are 'rational cheaters,' who anticipate the consequences of their actions and shirk when the perceived marginal benefit exceeds the marginal cost. Managers respond to this decision calculus by implementing monitoring and incentive pay practices that lessen the attraction of shirking. This 'rational cheater model' is not the only model of opportunistic behavior, and indeed is viewed skeptically by human resource practitioners and by many non-economists who study employment relationships. We investigate the 'rational cheater model' using data from a double-blind field experiment that allows us to observe the effect of experimentally-induced variations in monitoring on employee opportunism. The experiment is unique in that it occurs in the context of an ongoing employment relationship, i.e., with the firm's employees producing output as usual under the supervision of their front-line managers. The results indicate that a significant fraction of employees behave roughly in ccordance with the 'rational cheater model.' We also find, however, that a substantial proportion of employees do not respond to manipulations in the monitoring rate. This heterogeneity is related to employee assessments about their general treatment by the emp loyer.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Publisher Info
Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
8811.
Length: Date of creation: Feb 2002 Date of revision: Handle: RePEc:nbr:nberwo:8811
Note: LS Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A. Phone: 617-868-3900 Email: Web page: http://www.nber.org More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: ().
Find related papers by JEL classification: D2 - Microeconomics - - Production and Organizations J2 - Labor and Demographic Economics - - Demand and Supply of Labor
This paper has been announced in the following NEP Reports:
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Martin Gaynor & James B. Rebitzer & Lowell J. Taylor, 2001.
"Incentives in HMOs,"
NBER Working Papers
8522, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Martin Gaynor & James B. Rebitzer & Lowell J. Taylor, 2001.
"Incentives In HMOs,"
Macroeconomics
0111001, EconWPA.
[Downloadable!]
Martin Gaynor & James Rebitzer & Lowell Taylor, .
"Incentives in HMOs,"
GSIA Working Papers
2003-E21, Carnegie Mellon University, Tepper School of Business.
[Downloadable!]
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.) This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.