IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Cheating in the workplace: An experimental study of the impact of bonuses and productivity

  • Gill, David
  • Prowse, Victoria
  • Vlassopoulos, Michael

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. These results are consistent with workers’ cheating behavior responding to the perceived fairness of their employer’s compensation scheme.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://mpra.ub.uni-muenchen.de/50166/1/MPRA_paper_50166.pdf
File Function: original version
Download Restriction: no

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 50166.

as
in new window

Length:
Date of creation: 04 Jul 2013
Date of revision:
Handle: RePEc:pra:mprapa:50166
Contact details of provider: Postal: Schackstr. 4, D-80539 Munich, Germany
Phone: +49-(0)89-2180-2219
Fax: +49-(0)89-2180-3900
Web page: http://mpra.ub.uni-muenchen.de

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Utikal, Verena & Fischbacher, Urs, 2013. "Disadvantageous lies in individual decisions," Journal of Economic Behavior & Organization, Elsevier, vol. 85(C), pages 108-111.
  2. Dickens, William T, et al, 1989. "Employee Crime and the Monitoring Puzzle," Journal of Labor Economics, University of Chicago Press, vol. 7(3), pages 331-47, July.
  3. Gill, David & Prowse, Victoria Liza, 2010. "A structural analysis of disappointment aversion in a real effort competition," Discussion Paper Series In Economics And Econometrics 1006, Economics Division, School of Social Sciences, University of Southampton.
  4. Croson, Rachel & Boles, Terry & Murnighan, J. Keith, 2003. "Cheap talk in bargaining experiments: lying and threats in ultimatum games," Journal of Economic Behavior & Organization, Elsevier, vol. 51(2), pages 143-159, June.
  5. Houser, Daniel & Vetter, Stefan & Winter, Joachim, 2010. "Fairness and Cheating," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 335, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  6. David Gill & Victoria Prowse, 2011. "Gender Differences and Dynamics in Competition: The Role of Luck," Economics Series Working Papers 564, University of Oxford, Department of Economics.
  7. Knez, Marc & Simester, Duncan, 2001. "Firm-Wide Incentives and Mutual Monitoring at Continental Airlines," Journal of Labor Economics, University of Chicago Press, vol. 19(4), pages 743-72, October.
  8. Brian A. Jacob & Steven D. Levitt, 2003. "Rotten Apples: An Investigation Of The Prevalence And Predictors Of Teacher Cheating," The Quarterly Journal of Economics, MIT Press, vol. 118(3), pages 843-877, August.
  9. Alessandro Bucciol & Marco Piovesan, 2008. "Luck or Cheating? A Field Experiment on Honesty with Children," Discussion Papers 08-28, University of Copenhagen. Department of Economics.
  10. Oyer, Paul & Schaefer, Scott, 2004. "Why Do Some Firms Give Stock Options To All Employees?: An Empirical Examination of Alternative Theories," Research Papers 1772r, Stanford University, Graduate School of Business.
  11. Gary Charness & Nuno Garoupa, 2000. "Reputation, Honesty, and Efficiency with Insider Information: an Experiment," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 9(3), pages 425-451, 06.
  12. Conrads, Julian & Irlenbusch, Bernd & Rilke, Rainer Michael & Walkowitz, Gari, 2011. "Lying and Team Incentives," IZA Discussion Papers 5968, Institute for the Study of Labor (IZA).
  13. Gino, Francesca & Schweitzer, Maurice E. & Mead, Nicole L. & Ariely, Dan, 2011. "Unable to resist temptation: How self-control depletion promotes unethical behavior," Organizational Behavior and Human Decision Processes, Elsevier, vol. 115(2), pages 191-203, July.
  14. Gill, David & Prowse, Victoria, 2013. "A Novel Computerized Real Effort Task Based on Sliders," MPRA Paper 48081, University Library of Munich, Germany.
  15. Curry Philip A. & Mongrain Steeve, 2009. "Deterrence in Rank-Order Tournaments," Review of Law & Economics, De Gruyter, vol. 5(1), pages 723-740, December.
  16. James Konow, 2003. "Which Is the Fairest One of All? A Positive Analysis of Justice Theories," Journal of Economic Literature, American Economic Association, vol. 41(4), pages 1188-1239, December.
  17. Michael C. Jensen, 2003. "Paying People to Lie: the Truth about the Budgeting Process," European Financial Management, European Financial Management Association, vol. 9(3), pages 379-406.
  18. Gerald Eisenkopf & Ruslan Gurtoviy & Verena Utikal, 2011. "Size matters - when it comes to lies," TWI Research Paper Series 66, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
  19. Paul Oyer, 2000. "Why Do Firms Use Incentives that Have No Incentive Effects?," Econometric Society World Congress 2000 Contributed Papers 1440, Econometric Society.
  20. Gary Charness & Martin Dufwenberg, 2006. "Promises and Partnership," Econometrica, Econometric Society, vol. 74(6), pages 1579-1601, November.
  21. Trautmann, Stefan T., 2009. "A tractable model of process fairness under risk," Journal of Economic Psychology, Elsevier, vol. 30(5), pages 803-813, October.
  22. Cadsby C. Bram & Song Fei & Tapon Francis, 2010. "Are You Paying Your Employees to Cheat? An Experimental Investigation," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-32, April.
  23. Marianne Bertrand & Sendhil Mullainathan, 2001. "Are Ceos Rewarded For Luck? The Ones Without Principals Are," The Quarterly Journal of Economics, MIT Press, vol. 116(3), pages 901-932, August.
  24. Li Hao & Daniel Houser, 2011. "Honest Lies," Working Papers 1021, George Mason University, Interdisciplinary Center for Economic Science.
  25. Giorgio Coricelli & Matteus Joffily & Claude Montmarquette & Marie Claire Villeval, 2010. "Cheating, Emotions, and Rationality: An Experiment on Tax Evasion," Post-Print halshs-00462067, HAL.
  26. Gerhard Riener & Simon Wiederhold, 2011. "On Social Identity, Subjective Expectations, and the Costs of Control," Jena Economic Research Papers 2011-035, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  27. Dreber, Anna & Johannesson, Magnus, 2008. "Gender differences in deception," Economics Letters, Elsevier, vol. 99(1), pages 197-199, April.
  28. J Abeler & A Becker & A Falk, 2012. "Truth-telling - A Representative Assessment," Discussion Papers 2012-15, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  29. Charness, Gary & Dufwenberg, Martin, 2003. "Promises & Partnership," Research Papers in Economics 2003:3, Stockholm University, Department of Economics.
  30. Daniel S. Nagin & James B. Rebitzer & Seth Sanders & Lowell J. Taylor, 2002. "Monitoring, Motivation, and Management: The Determinants of Opportunistic Behavior in a Field Experiment," American Economic Review, American Economic Association, vol. 92(4), pages 850-873, September.
  31. Mead, N.L. & Baumeister, R.F. & Gino, F. & Schweitzer, M.E. & Ariely, D., 2009. "Too tired to tell the truth : Self-control resource depletion and dishonesty," Other publications TiSEM c60167a3-c3aa-4b83-9192-1, Tilburg University, School of Economics and Management.
  32. Lundquist, Tobias & Ellingsen, Tore & Gribbe, Erik & Johannesson, Magnus, 2009. "The aversion to lying," Journal of Economic Behavior & Organization, Elsevier, vol. 70(1-2), pages 81-92, May.
  33. Christiane Schwieren & Doris Weichselbaumer, 2008. "Does competition enhance performance or cheating? A laboratory experiment," NRN working papers 2008-05, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
  34. Lewis, Alan & Bardis, Alexander & Flint, Chloe & Mason, Claire & Smith, Natalya & Tickle, Charlotte & Zinser, Jennifer, 2012. "Drawing the line somewhere: An experimental study of moral compromise," Journal of Economic Psychology, Elsevier, vol. 33(4), pages 718-725.
  35. Brian J. Hall & Jeffrey B. Liebman, 1997. "Are CEOs Really Paid Like Bureaucrats?," NBER Working Papers 6213, National Bureau of Economic Research, Inc.
  36. Burns, Natasha & Kedia, Simi, 2006. "The impact of performance-based compensation on misreporting," Journal of Financial Economics, Elsevier, vol. 79(1), pages 35-67, January.
  37. Efendi, Jap & Srivastava, Anup & Swanson, Edward P., 2007. "Why do corporate managers misstate financial statements? The role of option compensation and other factors," Journal of Financial Economics, Elsevier, vol. 85(3), pages 667-708, September.
  38. Sanjiv Erat & Uri Gneezy, 2012. "White Lies," Management Science, INFORMS, vol. 58(4), pages 723-733, April.
  39. Shalvi, Shaul & Dana, Jason & Handgraaf, Michel J.J. & De Dreu, Carsten K.W., 2011. "Justified ethicality: Observing desired counterfactuals modifies ethical perceptions and behavior," Organizational Behavior and Human Decision Processes, Elsevier, vol. 115(2), pages 181-190, July.
  40. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-64, October.
  41. Debashish Bhattacherjee, 2005. "The Effects of Group Incentives in an Indian Firm: Evidence from Payroll Data," LABOUR, CEIS, vol. 19(1), pages 147-173, 03.
  42. Core, John E. & Guay, Wayne R., 2001. "Stock option plans for non-executive employees," Journal of Financial Economics, Elsevier, vol. 61(2), pages 253-287, August.
  43. Scott M. Gilpatric, 2011. "Cheating In Contests," Economic Inquiry, Western Economic Association International, vol. 49(4), pages 1042-1053, October.
  44. Gary Charness & David I. Levine, 2007. "Intention and Stochastic Outcomes: An Experimental study," Economic Journal, Royal Economic Society, vol. 117(522), pages 1051-1072, 07.
  45. Joseph Tao-yi Wang & Michael Spezio & Colin F. Camerer, 2010. "Pinocchio's Pupil: Using Eyetracking and Pupil Dilation to Understand Truth Telling and Deception in Sender-Receiver Games," American Economic Review, American Economic Association, vol. 100(3), pages 984-1007, June.
  46. Urs Fischbacher & Franziska Föllmi-Heusi, 2013. "Lies In Disguise—An Experimental Study On Cheating," Journal of the European Economic Association, European Economic Association, vol. 11(3), pages 525-547, 06.
  47. Hammermann, Andrea & Mohnen, Alwine & Nieken, Petra, 2012. "Whom to Choose as a Team Mate? A Lab Experiment about In-Group Favouritism," IZA Discussion Papers 6286, Institute for the Study of Labor (IZA).
  48. Uri Gneezy, 2005. "Deception: The Role of Consequences," American Economic Review, American Economic Association, vol. 95(1), pages 384-394, March.
  49. Moers, Frank, 2005. "Discretion and bias in performance evaluation: the impact of diversity and subjectivity," Accounting, Organizations and Society, Elsevier, vol. 30(1), pages 67-80, January.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:50166. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.