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Performance Pay and Productivity: The Moderating Role of a High-Wage Policy

Author

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  • Uwe Jirjahn

Abstract

Using panel data from German establishments, this study finds that performance pay is associated with increased productivity only when it is coupled with a high-wage policy. This holds for individual-based performance pay, group-based performance pay and profit sharing.

Suggested Citation

  • Uwe Jirjahn, 2015. "Performance Pay and Productivity: The Moderating Role of a High-Wage Policy," Research Papers in Economics 2015-04, University of Trier, Department of Economics.
    • Handle: RePEc:trr:wpaper:201504
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    File URL: http://www.uni-trier.de/fileadmin/fb4/prof/VWL/EWF/Research_Papers/2015-04.pdf
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • D20 - Microeconomics - - Production and Organizations - - - General
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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