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http://hdl.handle.net/10419/51773
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| Title: | | Managerial incentives and favoritism in promotion decisions: Theory and field evidence  |
| Authors: | | Berger, Johannes Herbertz, Claus Sliwka, Dirk |
| Issue Date: | | 2011 |
| Series/Report no.: | | Discussion paper series // Forschungsinstitut zur Zukunft der Arbeit 5543 |
| Abstract: | | This paper investigates the effects of managerial incentives on favoritism in promotion decisions. First, we theoretically show that favoritism leads to a lower quality of promotion decisions and in turn lower efforts. But the effect can be mitigated by pay-for-performance incentives for managers who decide upon promotion. Second, we analyze matched employer-employee survey data with detailed firm level information on managerial incentive schemes and find that perceived promotion quality is indeed substantially higher when managers receive performance-related pay or participate in gain sharing plans. |
| Subjects: | | incentives favoritism nepotism tournaments |
| JEL: | | J33 M51 M52 M54 J71 |
| Persistent Identifier of the first edition: | | urn:nbn:de:101:1-201104133606 |
| Document Type: | | Working Paper |
| Appears in Collections: | | IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)
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