Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/161266
Authors: 
Jirjahn, Uwe
Mohrenweiser, Jens
Year of Publication: 
2017
Series/Report no.: 
IZA Discussion Papers 10643
Abstract: 
Using German establishment data, we show that the relationship between intensity of performance pay and intensity of applicant screening depends on the nature of production. In establishments with increased multitasking, performance pay is positively associated with applicant screening. By contrast, in establishments without increased multitasking, performance pay is negatively associated with applicant screening. The findings fit the hypothesis that performance pay induces a positive self-sorting of employees if jobs are less multifaceted. In this case, employers with a high intensity of performance pay do not need intensive applicant screening to ensure a high quality of matches between workers and jobs. However, if jobs are more multifaceted, performance pay can entail problems of adverse self-sorting. In order to mitigate or overcome these problems, employers making intensive use of performance pay also screen applicants more intensively.
Subjects: 
performance pay
multitasking
self-sorting
applicant screening
non-managerial employees
managerial employees
JEL: 
J33
J60
M51
M52
Document Type: 
Working Paper

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