Extrinsic Rewards and Intrinsic Motives: Standard and Behavioral Approaches to Agency and Labor Markets

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in ABSTRACTEmployers structure pay and employment relationships to mitigate agency problems. A large literature in economics documents how the resolution of these problems shapes personnel policies and labor markets. For the most part, the study of agency in employment relationships relies on highly stylized assumptions regarding human motivation, e.g., that employees seek to earn as much money as possible with minimal effort. In this essay, we explore the consequences of introducing behavioral complexity and realism into models of agency within organizations. Specifically, we assess the insights gained by allowing employees to be guided by such motivations as the desire to compare favorably to others, the aspiration to contribute to intrinsically worthwhile goals, and the inclination to reciprocate generosity or exact retribution for perceived wrongs.More provocatively, from the standpoint of standard economics, we also consider the possibility that people are driven, in ways that may be opaque even to themselves, by the desire to earn social esteem or to shape and reinforce identity.

Fairness, envy, guilt and greed: Building equity considerations into agency theory

“…Neither theory takes into account equity considerations (Bowie & Freeman, 1992;O'Reilly, Main, & Crystal, 1988). However, in recent years a number of management scholars have advanced a new version of agency FAIRNESS, ENVY, etc. theory based on more realistic assumptions about behavior (Pepper & Gore, 2012, 2014Pepper, Gore, & Crossman, 2013;Rebitzer & Taylor, 2011;Sanders & Carpenter, 2003;Wiseman & Gomez-Mejia, 1998). The intention has been to construct a better theoretical account of executive compensation and agent motivation.…”

The economic psychology of incentives: An international study of top managers

“…We conclude, like others (e.g., Cuevas-Rodriquez, Gomez-Mejia, & Wiseman, 2012) that the time is now ripe for new empirical research and for a re-theorizing of the principal-agent model as it applies to executive compensation. This paper reports the findings of an international empirical study of long-term incentives, drawing on concepts and methods from the behavioral economics literature, especially behavioral-agency theory (Pepper & Gore, 2012;Rebitzer & Taylor, 2011;Sanders & Carpenter, 2003;Wiseman & Gomez-Mejia, 1998). It builds on an earlier study by (Pepper, Gore, & Crossman, 2013), and employs a new, much larger, international data set.…”

Change Management: Overcoming the Challenges of Introducing Self-Driven Learning

“…Part of the idea behind gamification is to understand which mechanics keep gamers motivated to come back to play and apply those constructs to non-game environments with the goal of encouraging similar engagement. Since these have been shown to work [16][17][18], some typical game mechanics were incorporated into the classroom as listed in Table 1. …”