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Equal Pay for Unequal Work: Limiting Sabotage in Teams

Author

Listed:
  • Arup Bose
  • Debashis Pal
  • David E. M. Sappington

Abstract

"We demonstrate the value of "equal pay" policies in teams, even when team members have distinct abilities and make different contributions to team performance. A commitment to compensate all team members in identical fashion eliminates the incentive that each team member otherwise has to sabotage the activities of teammates in order to induce the team owner to implement a more favorable reward structure. The reduced sabotage benefits the team owner, and can secure Pareto gains under plausible circumstances." Copyright (c) 2010, The Author(s) Journal Compilation (c) 2010 Wiley Periodicals, Inc..

Suggested Citation

  • Arup Bose & Debashis Pal & David E. M. Sappington, 2010. "Equal Pay for Unequal Work: Limiting Sabotage in Teams," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(1), pages 25-53, March.
  • Handle: RePEc:bla:jemstr:v:19:y:2010:i:1:p:25-53
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    Cited by:

    1. Björn Bartling & Ferdinand A. von Siemens, 2010. "Equal Sharing Rules in Partnerships," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 166(2), pages 299-320, June.
    2. Semih Tumen, 2016. "A theory of intra-firm group design," Journal of Productivity Analysis, Springer, vol. 45(1), pages 89-102, February.
    3. repec:hal:journl:halshs-00768900 is not listed on IDEAS
    4. Kouroche Vafaï, 2012. "Supervision in Firms," Documents de travail du Centre d'Economie de la Sorbonne 12084, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    5. repec:elg:eechap:15325_9 is not listed on IDEAS
    6. Kouroche Vafaï, 2012. "Supervision in Firms," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00768900, HAL.
    7. Kouroche Vafaï, 2012. "Optimal Organization," Economics Bulletin, AccessEcon, vol. 32(1), pages 518-527.
    8. Subhasish Chowdhury & Oliver Gürtler, 2015. "Sabotage in contests: a survey," Public Choice, Springer, vol. 164(1), pages 135-155, July.
    9. Michael T. Rauh, 2014. "Incentives, wages, employment, and the division of labor in teams," RAND Journal of Economics, RAND Corporation, vol. 45(3), pages 533-552, September.
    10. Caruso, Raul & Carlo, Bellavite Pellegrini & Marco, Di Domizio, 2016. "Does diversity in the payroll affect soccer teams’ performance? Evidence from the Italian Serie A," MPRA Paper 75644, University Library of Munich, Germany.
    11. J. Atsu Amegashie, 2013. "Sabotage in Contests: An Overview," CESifo Working Paper Series 4422, CESifo Group Munich.
    12. Kräkel, Matthias & Müller, Daniel, 2012. "Sabotage in teams," Economics Letters, Elsevier, vol. 115(2), pages 289-292.
    13. Annala, Christopher N. & Winfree, Jason, 2011. "Salary distribution and team performance in Major League Baseball," Sport Management Review, Elsevier, vol. 14(2), pages 167-175, May.

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