Does monitoring decrease work effort?

Dickinson, David L.; Villeval, Marie Claire

doi:10.1016/j.geb.2007.08.004

Cited by 163 publications

(29 citation statements)

References 31 publications

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“…They are also extensively used in other contexts, including society at large when, for example, governments offer tax-deduction incentives to increase charitable donations or premiums for recycling behaviors that protect the environment, or again when criminal sentences are reduced for an informant's helpful information within the judicial system (Underhill, 2016). Within organizations, MCT has been adopted to investigate the effect of extrinsic rewards on intrinsic motivation in relation to several employee outcomes such as, for example, work effort (Dickinson & Villeval, 2008;Irlenbusch & Sliwka, 2005;Kuvaas, Buch, Gagné, Dysvik, & Forest, 2016), commitment and engagement (Putra et al, 2017), burnout and turnover (Kuvaas et al, 2017), and the tendency to move from one sector to another (Georgellis, Iossa, & Tabvuma, 2010).…”

Section: Mct and Organizational Innovationmentioning

confidence: 99%

Crowding‐out or crowding‐in? Direct voice, performance‐related pay, and organizational innovation in European firms

Torre

Salimi

Giangreco

2019

Human Resource Management

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Building on motivation crowding theory (MCT), this article contributes to the human resources management (HRM)‐innovation debate by examining the potential trade‐offs between HRM practices targeted to increase employees' intrinsic motivation, such as direct employee voice (EV), and the presence of extrinsic incentives in the form of individual and collective performance‐related pay (PRP). The results of the analysis on more than 22,000 European establishments show support for the positive relationship between EV and a firm's organizational innovation, and that this relationship is weaker in companies that adopted individual PRP schemes (piece‐rate plans). Moreover, while we found that collective PRP (profit‐sharing) does not moderate the relationship between EV and organizational innovation, a positive and significant moderation effect emerged when the combined presence of individual and collective PRP was considered. By advocating that the coexistence of multiple forms of PRP could overcome the crowding‐out effect of individual PRP on EV, the study contributes to the HRM debate by also calling for a better understanding of the potential contingencies between different HRM practices when innovation is focus of the analysis.

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Section: Mct and Organizational Innovationmentioning

confidence: 99%

Crowding‐out or crowding‐in? Direct voice, performance‐related pay, and organizational innovation in European firms

Torre

Salimi

Giangreco

2019

Human Resource Management

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“…The interpretation by Fehr et al (2007) of their findings is that the bonus contract was preferred to the monitoring contract because of fairness concerns. However, it is possible that a contract that contained the opportunity of fining could have been perceived as a hostile act itself, and that it might send the agent a signal of distrust (see Frey, 1998;Fehr and Rockenbach, 2003;Dickinson and Villeval, 2008). 1 This, in turn, could have increased the likelihood of shirking, by generating a self-fulfilling prophecy of distrust (see Bacharach et al, 2007).…”

Section: Introductionmentioning

confidence: 99%

Contract Choice: Efficiency and Fairness in Revenue‐Sharing Contracts

Karakostas

Sonntag

Zizzo

2017

Scandinavian J Economics

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We present a simple principal–agent experiment in which the principals are allowed to choose between a revenue‐sharing, a bonus, and a trust contract, to offer to an agent. Our findings suggest that a large majority of experimental subjects choose the revenue‐sharing contract. This choice turns out to be not only the most efficient but also, at the same time, fair. Overall, the distribution of earnings is only mildly skewed towards the principal. We conclude that, under revenue‐sharing contracts, concerns for fairness can be closely associated with the use of monetary incentives.

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“…We thank an anonymous reviewer for pointing out these references. 2 Exceptions are Falk and Kosfeld (2006) who study the principal's choice of autonomy provided to employees and Dickinson and Villeval (2008) who analyze the choice of monitoring intensity. While both examine ex ante actions (before effort is provided), we are chiefly interested here in the expression of respect by the principal to the agent after effort is provided.…”

Section: Introductionmentioning

confidence: 99%

Respect and relational contracts

Eriksson

Villeval

2012

Journal of Economic Behavior & Organization

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Assuming that people care not only about what others do but also on what others think, we study respect in a labor market context where the length of the employment relationship is endogenous. In our three-stage gift-exchange experiment, the employer can express respect by giving the employee costly symbolic rewards after observing his level of effort. We study whether symbolic rewards are used by the employers mainly to praise employees or as a coordination device to build relational contracts by manipulating the balance between labor demand and supply in the market. We find that a high proportion of long-term relationships have been initiated by the assignment of symbolic rewards. However, the assignment of symbolic rewards decreases when it becomes clear that the relationship is durable, suggesting that employers mainly use symbolic rewards as a coordination device to initiate relational contracts. Compared to the balanced market condition, assigning symbolic rewards in initial relationships is less likely when there is excess demand in the market and more likely when there is excess supply, i.e. when the relationship is more valuable. Receiving symbolic rewards increases the employees' likelihood of accepting to continue the relationship with the same employer. It also motivates them to increase their effort further but only when the market is balanced. Overall, the ability to assign symbolic rewards does not give rise to higher profits because it is associated with lower rents offered to the employees on average, leading to lower effort levels.

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Does monitoring decrease work effort?

Cited by 163 publications

References 31 publications

Crowding‐out or crowding‐in? Direct voice, performance‐related pay, and organizational innovation in European firms

Crowding‐out or crowding‐in? Direct voice, performance‐related pay, and organizational innovation in European firms

Contract Choice: Efficiency and Fairness in Revenue‐Sharing Contracts

Respect and relational contracts

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