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Becoming "We" Instead of "I", Identity Management and Incentives in the Workplace

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  • Donze, Jocelyn
  • Gunnes, Trude

Abstract

This paper studies how a firm fosters formal and informal interactions among its employees to create a collective identity and positively influence effort. We develop a model where employees have both a personal and a social ideal for effort, and where the firm can make its workforce more sensitive to this social ideal by allocating part of the work time to social interactions. We show that by investing in social capital, the firm can increase the power of peer pressure, make screening among heterogeneous employees less costly and, finally, augment the effectiveness of monetary incentives.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 44769.

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Date of creation: 05 Mar 2013
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Handle: RePEc:pra:mprapa:44769

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Keywords: monetary and non monetary incentives; social norms; norm regulation; identity;

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  1. Bénabou, Roland & Tirole, Jean, 2004. "Incentives and Prosocial Behaviour," CEPR Discussion Papers, C.E.P.R. Discussion Papers 4633, C.E.P.R. Discussion Papers.
  2. Bengt Holmstrom & Paul R. Milgrom, 1985. "Aggregation and Linearity in the Provision of Intertemporal Incentives," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 742, Cowles Foundation for Research in Economics, Yale University.
  3. Theilen, Bernd, 2003. "Simultaneous moral hazard and adverse selection with risk averse agents," Economics Letters, Elsevier, Elsevier, vol. 79(2), pages 283-289, May.
  4. Kandel, E. & Lazear, E.P., 1990. "Peer Pressure and Partnerships," Papers, Rochester, Business - Managerial Economics Research Center 90-07, Rochester, Business - Managerial Economics Research Center.
  5. Mas, Alexandre & Moretti, Enrico, 2006. "Peers at Work," IZA Discussion Papers 2292, Institute for the Study of Labor (IZA).
  6. Oriana Bandiera & Iwan Barankay & Imran Rasul, 2010. "Social Incentives in the Workplace," Review of Economic Studies, Oxford University Press, vol. 77(2), pages 417-458.
  7. Dur, Robert & Sol, Joeri, 2010. "Social interaction, co-worker altruism, and incentives," Games and Economic Behavior, Elsevier, Elsevier, vol. 69(2), pages 293-301, July.
  8. Rotemberg, Julio J, 1994. "Human Relations in the Workplace," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 102(4), pages 684-717, August.
  9. Paul Fischer & Steven Huddart, 2008. "Optimal Contracting with Endogenous Social Norms," American Economic Review, American Economic Association, American Economic Association, vol. 98(4), pages 1459-75, September.
  10. Roland Bénabou & Jean Tirole, 2003. "Intrinsic and Extrinsic Motivation," Review of Economic Studies, Oxford University Press, vol. 70(3), pages 489-520.
  11. Erik Canton, 2005. "Power of Incentives in Public Organizations When Employees Are Intrinsically Motivated," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, Mohr Siebeck, Tübingen, vol. 161(4), pages 664-, December.
  12. Bandiera, Oriana & Barankay, Iwan & Rasul, Imran, 2008. "Social capital in the workplace: Evidence on its formation and consequences," Labour Economics, Elsevier, Elsevier, vol. 15(4), pages 724-748, August.
  13. Cooper, Russell & John, Andrew, 1988. "Coordinating Coordination Failures in Keynesian Models," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 103(3), pages 441-63, August.
  14. Francois, Patrick, 2000. "'Public service motivation' as an argument for government provision," Journal of Public Economics, Elsevier, Elsevier, vol. 78(3), pages 275-299, November.
  15. Huck, Steffen & Kübler, Dorothea & Weibull, Jörgen, 2012. "Social norms and economic incentives in firms," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 83(2), pages 173-185.
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