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Discretion, productivity, and work satisfaction

Author

Listed:
  • Bartling, Björn
  • Fehr, Ernst
  • Schmidt, Klaus M.

Abstract

In Bartling, Fehr, and Schmidt (2012) we show theoretically and experimentally that it is optimal to grant discretion to workers if (i) discretion increases productivity, (ii) workers can be screened by past performance, (iii) some workers reciprocate high wages with high effort, and (iv) employers pay high wages leaving rents to their workers. In this paper we show experimentally that the productivity increase due to discretion is not only sufficient but also necessary for the optimality of granting discretion to workers. Furthermore, we report representative survey evidence on the effect of discretion on workers’ welfare, confirming that workers earn rents.

Suggested Citation

  • Bartling, Björn & Fehr, Ernst & Schmidt, Klaus M., 2013. "Discretion, productivity, and work satisfaction," Munich Reprints in Economics 20127, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenar:20127
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    Citations

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    Cited by:

    1. Alessandro De Chiara & Ester Manna, 2019. "Delegation with a Reciprocal Agent," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 35(3), pages 651-695.
    2. Britta Butz & Pablo Guillen Alvarez & Christine Harbring, 2024. "Incentives for cooperation in groups: sociality meets decision rights," Review of Managerial Science, Springer, vol. 18(10), pages 2925-2951, October.
    3. Burdin, Gabriel & Halliday, Simon & Landini, Fabio, 2018. "The hidden benefits of abstaining from control," Journal of Economic Behavior & Organization, Elsevier, vol. 147(C), pages 1-12.
    4. Diane Pelly, 2023. "Worker Well-Being and Quit Intentions: Is Measuring Job Satisfaction Enough?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 169(1), pages 397-441, September.
    5. Lea Cassar, 2014. "Optimal contracting with endogenous project mission," ECON - Working Papers 150, Department of Economics - University of Zurich, revised Oct 2014.
    6. Burdin, Gabriel & Halliday, Simon & Landini, Fabio, 2015. "Third-Party vs. Second-Party Control: Disentangling the Role of Autonomy and Reciprocity," IZA Discussion Papers 9251, Institute of Labor Economics (IZA).
    7. Eric van Damme, 2013. "Preventing Abuse by Controlling Shareholders," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 169(1), pages 190-196, March.
    8. Butz, Britta & Guillen Alvarez, Pablo & Harbring, Christine, 2021. "Incentives for Cooperation in Teams: Sociality Meets Decision Rights," IZA Discussion Papers 14242, Institute of Labor Economics (IZA).
    9. Lukas Kiessling & Jonas Radbruch & Sebastian Schaube, 2022. "Self-Selection of Peers and Performance," Management Science, INFORMS, vol. 68(11), pages 8184-8201, November.
    10. repec:ucl:cepeow:25-15 is not listed on IDEAS
    11. Roşca Vlad I., 2022. "Person-Job Fit and Subjective Underemployment in Multinational Companies," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 16(1), pages 981-991, August.
    12. Awan, Ashar & Hamdani, Nisar, 2015. "Achieving Job Satisfaction through Spirituality: A Case Study of Muslim Employees," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 1(1), pages 119-152.
    13. Lea Cassar, 2014. "Job mission as a substitute for monetary incentives: experimental evidence," ECON - Working Papers 177, Department of Economics - University of Zurich.

    More about this item

    JEL classification:

    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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