Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/86329
Authors: 
van Herpen, Marco
Cools, Kees
van Praag, Mirjam
Year of Publication: 
2004
Series/Report no.: 
Tinbergen Institute Discussion Paper 04-107/3
Abstract: 
This paper studies wage structure characteristics and their incentive effects within one firm. Based on personnel records and an employee survey, we provide evidence that wages are attached to jobs and that promotions play a dominant role as a wage determinant. We furthermore show that a promotion affects both intrinsic and extrinsic motivation significantly, though in two different ways: An expected promotion increases extrinsic motivation whereas intrinsic motivation is highest subsequent to a realized promotion. The relationship between extrinsic motivation and expected promotions implies that promotions have a clear incentive effect, consistent with a key – not yet tested – prediction of the tournament model.
Subjects: 
promotions
incentives
tournament model
internal labor market
extrinsic motivation
intrinsic motivation
JEL: 
J41
J33
M51
M52
Document Type: 
Working Paper

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