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Cheating in the workplace: An experimental study of the impact of bonuses and productivity

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  • David Gill
  • Victoria Prowse
  • Michael Vlassopoulos

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.� These results are consistent with workers' cheating behavior responding to the perceived fairness of their employer's compensation scheme.

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Bibliographic Info

Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 666.

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Date of creation: 08 Jul 2013
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Handle: RePEc:oxf:wpaper:666

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

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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.
  2. Bassi, Matteo & Pagnozzi, Marco & Piccolo, Salvatore, 2014. "Optimal contracting with altruism and reciprocity," Research in Economics, Elsevier, vol. 68(1), pages 27-38.
  3. Gill, David & Prowse, Victoria, 2011. "A novel computerized real effort task based on sliders," Discussion Paper Series In Economics And Econometrics 1101, Economics Division, School of Social Sciences, University of Southampton.
  4. David Cooper & David Johnson, 2013. "Ambiguity in Performance Pay: An Online Experiment," Working Papers 2013-27, Department of Economics, University of Calgary, revised 14 Nov 2013.

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