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The Pros and Cons of Workplace Tournaments

Listed author(s):
  • Roman M. Sheremeta

    ()

    (Weatherhead School of Management, Case Western Reserve University and Economic Science Institute, Chapman University)

Tournaments are commonly used in the workplace to determine promotion, assign bonuses, and motivate personal development. Tournament-based contracts can be very effective in eliciting high effort, often outperforming other compensation contracts, but they can also have negative consequences for both managers and workers. The benefits and disadvantages of workplace tournaments have been identified in theoretical, empirical, and experimental research over the past several decades. Based on these findings, I provide suggestions and guidelines for when it might be beneficial to use tournaments in the workplace.

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Paper provided by Chapman University, Economic Science Institute in its series Working Papers with number 16-27.

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Date of creation: 2016
Handle: RePEc:chu:wpaper:16-27
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