Journal ArticleDOI
The Incentive Effects of Tournament Compensation Systems
Brian E. Becker,Mark A. Huselid +1 more
TLDR
In this article, the authors show that the tournament spread (prize differential) does have incentive effects on both individual performance and driver safety, that these effects peak at higher spreads, and that controlling for the dollar value of tournament spread, the prize distribution has little influence on individual performance.Abstract:
Brian E. Becker and Mark A. Huselid State University of New York at Buffalo Tournament models have developed into an important component of the theoretical literature on organizational reward systems. However, with one exception there have been no empirical tests of the incentive effects of tournament models in a field setting. Drawing on a panel data set from auto racing, we show that the tournament spread (prize differential) does have incentive effects on both individual performance and driver safety, that these effects peak at higher spreads, and that controlling for the dollar value of the tournament spread, the prize distribution has little influence on individual performance.read more
Citations
More filters
Journal ArticleDOI
The Provision of Incentives in Firms
TL;DR: In this article, a review of existing work on the provision of incentives for workers is presented, and the authors evaluate this literature in the light of a growing empirical literature on compensation from two perspectives: first, an underlying assumption of this literature is that individuals respond to contracts that reward performance.
Posted Content
Risk Taking by Mutual Funds as a Response to Incentives
TL;DR: In this article, the authors examine the agency conflict between mutual fund investors and mutual fund companies, and show that a fund company in its desire to maximize its value as a concern has an incentive to take actions which increase the flow of investment.
Book ChapterDOI
The Economic Design of Sporting Contests
TL;DR: In this article, the optimal number of entrants in a race, the optimal amount of teams in a baseball league, and the optimal structure of prizes for a golf tournament were investigated.
Journal ArticleDOI
HR as a Source of Shareholder Value: Research and Recommendations
TL;DR: The role of the Human Resource Management (HRM) function in many organizations is at a crossroads as mentioned in this paper, where the HRM function is increasingly under fire to justify itself and confronted with the very real prospect that a significant portion of its traditional responsibilities will be outsourced.
Journal ArticleDOI
The Performance Effects of Pay Dispersion on Individuals and Organizations
TL;DR: Pay distribution research is relatively scarce in the compensation literature, yet pay distributions are viewed as critically important by organizational decision makers as discussed by the authors, which is a direct consequence of the importance of pay distributions.
References
More filters
Book
Analysis of Panel Data
TL;DR: In this paper, the authors propose a homogeneity test for linear regression models (analysis of covariance) and show that linear regression with variable intercepts is more consistent than simple regression with simple intercepts.
Journal ArticleDOI
Performance Pay and Top Management Incentives
Kevin Murphy,Michael C. Jensen +1 more
TL;DR: For example, the authors estimates of the pay-performance relation (including pay, options, stockholdings, and dismissal) for chief executive officers indicate that CEO wealth changes $3.25 for every $1,000 change in shareholder wealth.
ReportDOI
Rank-Order Tournaments as Optimum Labor Contracts
Edward P. Lazear,Sherwin Rosen +1 more
TL;DR: The authors analyzes compensation schemes which pay according to an individual's ordinal rank in an organization rather than his output level and shows that wages based upon rank induce the same efficient allocation of resources as an incentive reward scheme based on individual output levels.
Book
Performance pay and top-management incentives
Michael C. Jensen,Kevin Murphy +1 more
TL;DR: For example, the authors estimates of the pay-performance relation (including pay, options, stockholdings, and dismissal) for chief executive officers indicate that CEO wealth changes $3.25 for every $1,000 change in shareholder wealth.
Journal ArticleDOI
Institutional Sources of Change in the Formal Structure of Organizations: The Diffusion of Civil Service Reform, 1880-1935
TL;DR: This paper investigated the diffusion and institutionalization of change in formal organization structure, using data on the adoption of civil service reform by cities and found that when civil service procedures are required by the state, they diffuse rapidly and directly from the state to each city.