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

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  • Gill, David
  • Prowse, Victoria
  • Vlassopoulos, Michael

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.

Suggested Citation

  • Gill, David & Prowse, Victoria & Vlassopoulos, Michael, 2013. "Cheating in the workplace: An experimental study of the impact of bonuses and productivity," Journal of Economic Behavior & Organization, Elsevier, vol. 96(C), pages 120-134.
  • Handle: RePEc:eee:jeborg:v:96:y:2013:i:c:p:120-134
    DOI: 10.1016/j.jebo.2013.09.011
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    More about this item

    Keywords

    Bonus; Compensation; Cheating; Dishonesty; Lying; Employee crime; Productivity; Slider task; Real effort; Experiment;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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