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Cheating in the Workplace: An Experimental Study of the Impact of Bonuses and Productivity

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  • Gill, David

    () (Purdue University)

  • Prowse, Victoria L.

    () (Purdue University)

  • Vlassopoulos, Michael

    () (University of Southampton)

Abstract

We use an online real-effort experiment to investigate how bonus-based pay and worker productivity interact with workplace cheating. Firms often use bonus-based compensation plans, such as group bonuses and firm-wide profit sharing, that induce considerable uncertainty in how much workers are paid. Exposing workers to a compensation scheme based on random bonuses makes them cheat more but has no effect on their productivity. We also find that more productive workers behave more dishonestly. We explain how these results suggest that workers' cheating behavior responds to the perceived fairness of their employer's compensation scheme.

Suggested Citation

  • Gill, David & Prowse, Victoria L. & Vlassopoulos, Michael, 2012. "Cheating in the Workplace: An Experimental Study of the Impact of Bonuses and Productivity," IZA Discussion Papers 6725, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp6725
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    Cited by:

    1. Christoph Engel, 2016. "Experimental Criminal Law. A Survey of Contributions from Law, Economics and Criminology," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2016_07, Max Planck Institute for Research on Collective Goods.
    2. repec:clg:wpaper:2013-27 is not listed on IDEAS
    3. Doerrenberg, Philipp & Duncan, Denvil, 2014. "Experimental evidence on the relationship between tax evasion opportunities and labor supply," European Economic Review, Elsevier, vol. 68(C), pages 48-70.
    4. Doru Cojoc & Adrian Stoian, 2014. "Dishonesty and charitable behavior," Experimental Economics, Springer;Economic Science Association, vol. 17(4), pages 717-732, December.
    5. Galeotti, Fabio & Kline, Reuben & Orsini, Raimondello, 2017. "When foul play seems fair: Exploring the link between just deserts and honesty," Journal of Economic Behavior & Organization, Elsevier, vol. 142(C), pages 451-467.
    6. Victoria Prowse & David Gill, 2009. "A Novel Computerized Real Effort Task Based on Sliders," Economics Series Working Papers 435, University of Oxford, Department of Economics.
    7. Mechtel, Mario & Bäker, Agnes, 2015. "Peer Effects in Cheating on Task Performance," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113093, Verein für Socialpolitik / German Economic Association.
    8. Djawadi, Behnud Mir & Fahr, René, 2015. "“…and they are really lying”: Clean evidence on the pervasiveness of cheating in professional contexts from a field experiment," Journal of Economic Psychology, Elsevier, vol. 48(C), pages 48-59.
    9. repec:eee:joreco:v:34:y:2017:i:c:p:168-176 is not listed on IDEAS
    10. Julian Conrads & Mischa Ellenberger & Bernd Irlenbusch & Elia Nora Ohms & Rainer Michael Rilke & Gari Walkowitz, 2017. "Team Goal Incentives and Individual Lying Behavior," WHU Working Paper Series - Economics Group 17-02, WHU - Otto Beisheim School of Management.
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    16. Agnes Baeker & Mario Mechtel, 2015. "Peer Settings Induce Cheating on Task Performance," IAAEU Discussion Papers 201506, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    17. Fehr, Dietmar, 2015. "Is increasing inequality harmful? Experimental evidence," Discussion Papers, Research Unit: Market Behavior SP II 2015-209, Social Science Research Center Berlin (WZB).
    18. Thomas Buser & Anna Dreber, 2016. "The Flipside of Comparative Payment Schemes," Management Science, INFORMS, vol. 62(9), pages 2626-2638, September.
    19. Bassi, Matteo & Pagnozzi, Marco & Piccolo, Salvatore, 2014. "Optimal contracting with altruism and reciprocity," Research in Economics, Elsevier, vol. 68(1), pages 27-38.
    20. Ockenfels, Axel & Sliwka, Dirk & Werner, Peter, 2015. "Timing of kindness – Evidence from a field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 111(C), pages 79-87.
    21. Gianluca Grimalda & Anirban Kar & Eugenio Proto, 2016. "Procedural fairness in lotteries assigning initial roles in a dynamic setting," Experimental Economics, Springer;Economic Science Association, vol. 19(4), pages 819-841, December.
    22. Faravelli, Marco & Friesen, Lana & Gangadharan, Lata, 2015. "Selection, tournaments, and dishonesty," Journal of Economic Behavior & Organization, Elsevier, vol. 110(C), pages 160-175.
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    24. repec:eee:gamebe:v:107:y:2018:i:c:p:123-134 is not listed on IDEAS

    More about this item

    Keywords

    real effort; compensation; cheating; dishonesty; lying; employee crime; productivity; bonus; slider task; experiment;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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