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Luck, Effort, and Reward in an Organizational Hierarchy

Listed author(s):
  • Rick Audas

    (Memorial University of Newfoundland)

  • Tim Barmby

    (University of Aberdeen)

  • John Treble

    (University of Wales Swansea)

Using the personnel records of a large British financial sector employer we investigate how workers respond to remuneration differences and "luck" in the promotion system. The results confirm that workers respond to larger remuneration spreads by working harder. Increased certainty in the promotion process also has this effect. There appears to be no difference between men's and women's reactions to promotion incentives. Gender differences in the raw data therefore appear not due to incentives. We need to look elsewhere for an explanation.

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File URL: http://dx.doi.org/10.1086/381254
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Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 22 (2004)
Issue (Month): 2 (April)
Pages: 379-396

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Handle: RePEc:ucp:jlabec:v:22:y:2004:i:2:p:379-396
Contact details of provider: Web page: http://www.journals.uchicago.edu/JOLE/

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  1. Gary Chamberlain, 1980. "Analysis of Covariance with Qualitative Data," Review of Economic Studies, Oxford University Press, vol. 47(1), pages 225-238.
  2. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-864, October.
  3. Ichino, A. & Flabbi, L., 1998. "Productivity, Seniority and Wages. New Evidence form Personnel Data," Economics Working Papers eco98/11, European University Institute.
  4. Canice Prendergast, 1999. "The Provision of Incentives in Firms," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 7-63, March.
  5. O'Keeffe, Mary & Viscusi, W Kip & Zeckhauser, Richard J, 1984. "Economic Contests: Comparative Reward Schemes," Journal of Labor Economics, University of Chicago Press, vol. 2(1), pages 27-56, January.
  6. Treble, John & van Gameren, Edwin & Bridges, Sarah & Barmby, Tim, 2001. "The internal economics of the firm: further evidence from personnel data," Labour Economics, Elsevier, vol. 8(5), pages 531-552, December.
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