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Base Salaries, Bonus Payments, and Work Absence among Managers in a German Company

  • Pfeifer, Christian

    ()

    (Leuphana University Lüneburg)

Questions about compensation structures and incentive effects of pay-for-performance components are important for firms' Human Resource Management as well as for economics in general and labor economics in particular. This paper provides scarce insider econometric evidence on the structure and the incentive effects of fixed base salaries, paid bonuses, and agreed bonuses under a Management-by-Objectives (MBO) incentive scheme. Six years of personnel data of 177 managers in a German company are analyzed. The main findings are: (1) base salaries increase significantly with age, whereas bonuses decrease with age; (2) larger agreed bonuses are correlated with fewer absent working days.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7088.

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Length: 28 pages
Date of creation: Dec 2012
Date of revision:
Publication status: published in: Scottish Journal of Political Economy, 2014, 61 (5), 523-536
Handle: RePEc:iza:izadps:dp7088
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