Irlenbusch, B. and Ruchala, G. (2007) Relative rewards within team-based compensation. (ELSE Working Papers 239). ESRC Centre for Economic Learning and Social Evolution: London, UK.
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Abstract
How to design compensation schemes to motivate team members appears to be one of the most challenging problems in the economic analysis of labour provision. We shed light on this issue by experimentally investigating team-based compensations with and without bonuses awarded to the highest contributors in teams. A purely team-based compensation scheme induces agents to voluntarily cooperate while introducing an additional relative reward increases effort and efficiency only when the bonus is substantial. In this case, however, the data suggests that tournament competition crowds out voluntary cooperation within a team.
| Type: | Working / discussion paper |
|---|---|
| Title: | Relative rewards within team-based compensation |
| Open access status: | An open access version is available from UCL Discovery |
| Publisher version: | http://else.econ.ucl.ac.uk/newweb/papers.php#2007 |
| Language: | English |
| Keywords: | JEL classification: C72, C91, H41, J33, L23, M52. Bonus pools, relative rewards, motivation crowding out, voluntary cooperation, personnel economics, experiments |
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