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Incentives and Cooperation in Firms: Field Evidence

Author

Listed:
  • Berger, Johannes

    (University of Cologne)

  • Herbertz, Claus

    (University of Cologne)

  • Sliwka, Dirk

    (University of Cologne)

Abstract

We empirically investigate the impact of incentive scheme structure on the degree of cooperation in firms using a unique and representative data set. Combining employee survey data with detailed firm level information on the relative importance of individual, team, and company performance for compensation, we find a significant positive relation between the intensity of team incentives and several survey measures of cooperation. Moreover, higher powered team incentives are associated with lower degrees of absenteeism while this is not the case for individual incentives.

Suggested Citation

  • Berger, Johannes & Herbertz, Claus & Sliwka, Dirk, 2011. "Incentives and Cooperation in Firms: Field Evidence," IZA Discussion Papers 5618, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp5618
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    Citations

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    Cited by:

    1. Josse Delfgaauw & Robert Dur & Oke Onemu & Joeri Sol, 2022. "Team Incentives, Social Cohesion, and Performance: A Natural Field Experiment," Management Science, INFORMS, vol. 68(1), pages 230-256, January.
    2. Verena Dill & Uwe Jirjahn & Stephen C. Smith, 2016. "Do foreign owners favour short-term profit? Evidence from Germany," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 40(1), pages 123-140.
    3. Daniela Collazos & Leopoldo Fergusson & Miguel La Rota & Daniel Mejía & Daniel Ortega, 2020. "CSI in the tropics: Experimental evidence of improved public service delivery through coordination," Documentos de Trabajo 18215, The Latin American and Caribbean Economic Association (LACEA).
    4. Daniel Arnold & Tobias Brändle & Laszlo Goerke, 2014. "Sickness Absence and Works Councils - Evidence from German Individual and Linked Employer-Employee Data," IAAEU Discussion Papers 201410, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    5. Conrads, Julian & Reggiani, Tommaso G., 2014. "The Effect of Communication Channels on Promise-Making and Promise-Keeping," IZA Discussion Papers 8534, Institute of Labor Economics (IZA).
    6. Douglas L. Kruse & Joseph R. Blasi & Richard B. Freeman, 2012. "Does Linking Worker Pay to Firm Performance Help the Best Firms Do Even Better?," NBER Working Papers 17745, National Bureau of Economic Research, Inc.
    7. Hur, Julia D. & Lee-Yoon, Alice & Whillans, Ashley V., 2021. "Are they useful? The effects of performance incentives on the prioritization of work versus personal ties," Organizational Behavior and Human Decision Processes, Elsevier, vol. 165(C), pages 103-114.
    8. Julian Conrads & Tommaso Reggiani, 2017. "The effect of communication channels on promise-making and promise-keeping: experimental evidence," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 12(3), pages 595-611, October.
    9. Güth, Werner & Pull, Kerstin & Stadler, Manfred, 2014. "Delegation, worker compensation, and strategic competition," University of Tübingen Working Papers in Business and Economics 67, University of Tuebingen, Faculty of Economics and Social Sciences, School of Business and Economics.
    10. Verena Dill & Uwe Jirjahn, 2014. "Foreign Owners and Perceived Job Insecurity in Germany: Evidence from Linked Employer-Employee Data," Research Papers in Economics 2014-09, University of Trier, Department of Economics.
    11. Verena Dill & Uwe Jirjahn, 2017. "Foreign owners and the quality of industrial relations in Germany," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 38(1), pages 5-25, February.
    12. Thomas Cornelissen & John Heywood & Uwe Jirjahn, 2014. "Reciprocity and Profit Sharing: Is There an Inverse U-shaped Relationship?," Journal of Labor Research, Springer, vol. 35(2), pages 205-225, June.
    13. Bartke, Simon & Gelhaar, Felix, 2018. "When does team remuneration work? An experimental study on interactions between workplace contexts," Kiel Working Papers 2105, Kiel Institute for the World Economy (IfW Kiel).
    14. Simone Haeckl & Rupert Sausgruber & Jean-Robert Tyran, 2018. "Work Motivation and Teams," Discussion Papers 18-08, University of Copenhagen. Department of Economics.
    15. Herbertz, Claus & Sliwka, Dirk, 2013. "When higher prizes lead to lower efforts—The impact of favoritism in tournaments," Economics Letters, Elsevier, vol. 120(2), pages 188-191.

    More about this item

    Keywords

    incentives; cooperation; teams; helping effort;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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