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

  • Gill, David

    ()

    (University of Oxford)

  • Prowse, Victoria L.

    ()

    (Cornell University)

  • Vlassopoulos, Michael

    ()

    (University of Southampton)

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.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6725.

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Length: 23 pages
Date of creation: Jul 2012
Date of revision:
Publication status: published in: Journal of Economic Behavior and Organization, 2013, 96 (December), 120-134
Handle: RePEc:iza:izadps:dp6725
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