Abstract
I use insights gained from the literature of incentive design and gift exchange to explore the most efficient approaches for improving employee productivity. By considering two potential influence factors simultaneously, i.e. the peer-dependent incentives and the prepaid signing bonus, I create an experimental labor market in which “workers” can join “companies” that pay according to different peer-dependent incentives: revenue sharing, individual tournament and team tournament. Meanwhile, a prepaid signing bonus is designed as a random number which is given exogenously in addition to a certain incentive. My main findings include (i) the incentive that is more competitive generates higher individual productivity; and (ii) regardless of incentives, an additional signing bonus can always induce employees to improve their productivity. Hence I suggest that the optimal incentive design should consider the combination use of peer-dependent incentive and prepaid bonus.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
