Are workers rewarded for inconsistent performance?

Abstract

This paper examines whether workers are rewarded for inconsistent performance by salary premia. Some earlier research suggests that performance inconsistency leads to salary premia, while other research finds premia for consistent performance. Using detailed salary and performance data for top‐level footballers in Italy’s Serie A, we find that inconsistency is penalized for some important dimensions of basic performance measures associated with key skills of players, specifically clearances, aerial duels won, and shots on target.

The age‐wage‐productivity puzzle: Evidence from the careers of top earners

“…If a worker's productivity over time has a large component of idiosyncratic variance, then it is plausible that firms will pay more to workers with more available past performance data. There is evidence from sports labor markets that firms pay more to consistent performers (e.g., Deutscher et al., 2017; Özdemir et al., 2022), at the same time as over‐valuing recent performance (e.g., Healy, 2008). In other labor markets, Kuhnen and Oyer (2016) found that firms are more likely to hire MBA graduates who have previously worked in the same industry, suggesting some level of risk aversion.…”