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

  • Christian Pfeifer


    (Leuphana University Lueneburg, Germany)

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 University of Lüneburg, Institute of Economics in its series Working Paper Series in Economics with number 259.

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Length: 31 pages
Date of creation: Dec 2012
Date of revision:
Handle: RePEc:lue:wpaper:259
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