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Firing threats : Incentive effects and impression management

Author

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  • Brice Corgnet

    (EM - EMLyon Business School)

  • Roberto Hernán-González
  • Stephen Rassenti

Abstract

We study the effect of firing threats in a virtual workplace that reproduces features of existing organizations. We show that organizations in which bosses can fire up to one third of their workforce produce twice as much as organizations for which firing is not possible. Firing threats sharply decrease on-the-job leisure. Nevertheless, organizations endowed with firing threats underperformed those using individual incentives. In the presence of firing threats, employees engage in impression management activities to be seen as hard-working individuals in line with our model. Finally, production levels dropped substantially when the threat of being fired was removed, whereas on-the-job leisure surged.

Suggested Citation

  • Brice Corgnet & Roberto Hernán-González & Stephen Rassenti, 2015. "Firing threats : Incentive effects and impression management," Post-Print hal-02311953, HAL.
    • Handle: RePEc:hal:journl:hal-02311953
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    Cited by:

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    3. Brice Corgnet, 2018. "Rac(g)e Against the Machine? Social Incentives When Humans Meet Robots," Post-Print halshs-01984467, HAL.
    4. Corgnet, Brice & Gómez-Miñambres, Joaquín & Hernán-González, Roberto, 2018. "Goal setting in the principal–agent model: Weak incentives for strong performance," Games and Economic Behavior, Elsevier, vol. 109(C), pages 311-326.
    5. Dickinson, David L. & Masclet, David, 2023. "Unethical decision making and sleep restriction: Experimental evidence," Games and Economic Behavior, Elsevier, vol. 141(C), pages 484-502.
    6. Joshua D. Pitts & Brent A. Evans, 2023. "New contracts and dismissal threats from highly drafted rookies: What motivates NFL quarterbacks?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(1), pages 4-16, January.
    7. Adrian Chadi & Mario Mechtel & Vanessa Mertins, 2022. "Smartphone bans and workplace performance," Experimental Economics, Springer;Economic Science Association, vol. 25(1), pages 287-317, February.
    8. Brocas, Isabelle & Carrillo, Juan D. & Montgomery, Mallory, 2021. "Shaming as an incentive mechanism against stealing: Behavioral and physiological evidence," Journal of Public Economics, Elsevier, vol. 194(C).

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    More about this item

    Keywords

    Firing threats; Incentives; Impression management;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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