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When Galatea cares about her reputation: How having faith in your workers reduces their motivation to shine

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  • Kamphorst, Jurjen J.A.
  • Swank, Otto H.

Abstract

We develop a theory of leadership that focuses on the role managers play in motivating employees through their attitudes towards employees. We model a manager's attitude as her perception about employees' abilities of successfully completing challenging tasks. We show that a positive attitude motivates employees who are driven by monetary rewards. A negative attitude may motivate employees who are driven by concerns about their reputation for being able. When employees are driven by monetary rewards and care about their reputations, an increase in the reward for successfully completing challenging tasks may lead employees to shy away from these tasks.

Suggested Citation

  • Kamphorst, Jurjen J.A. & Swank, Otto H., 2013. "When Galatea cares about her reputation: How having faith in your workers reduces their motivation to shine," European Economic Review, Elsevier, vol. 60(C), pages 91-104.
  • Handle: RePEc:eee:eecrev:v:60:y:2013:i:c:p:91-104
    DOI: 10.1016/j.euroecorev.2013.02.004
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    References listed on IDEAS

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    More about this item

    Keywords

    Reputation; Worker motivation; Task choice; Principle-agent;

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • M59 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Other

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