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Erscheinungsjahr: 
2011
Schriftenreihe/Nr.: 
IZA Discussion Papers No. 5543
Verlag: 
Institute for the Study of Labor (IZA), Bonn
Zusammenfassung: 
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.
Schlagwörter: 
incentives
favoritism
nepotism
tournaments
JEL: 
J33
M51
M52
M54
J71
Persistent Identifier der Erstveröffentlichung: 
Dokumentart: 
Working Paper

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