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Treating Equals Unequally: Incentives in Teams, Workers' Motivation and Production Technology

  • Goerg, Sebastian

    ()

    (Florida State University)

  • Kube, Sebastian

    ()

    (University of Bonn)

  • Zultan, Ro'i

    ()

    (Max Planck Institute for Economics)

The importance of fair and equal treatment of workers is at the heart of the debate in organizational management. In this regard, we study how reward mechanisms and production technologies affect effort provision in teams. Our experimental results demonstrate that unequal rewards can potentially increase productivity by facilitating coordination, and that the effect strongly interacts with the exact shape of the production function. Taken together, our data highlight the relevance of the production function for organization construction and suggest that equal treatment of equals is neither a necessary nor a sufficient prerequisite for eliciting high performance in teams.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3959.

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Length: 34 pages
Date of creation: Jan 2009
Date of revision:
Publication status: published in: Journal of Labor Economics, 2010, 28 (4), 747 - 772
Handle: RePEc:iza:izadps:dp3959
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