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OPTIMAL JOB DESIGN IN THE PRESENCE OF IMPLICIT CONTRACTS
| Citations: | 4 - 2 self |
BibTeX
@MISC{Mukherjee_optimaljob,
author = {Arijit Mukherjee and Luis Vasconcelos},
title = {OPTIMAL JOB DESIGN IN THE PRESENCE OF IMPLICIT CONTRACTS},
year = {}
}
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Abstract
Abstract. We characterize the optimal job design in a multitasking environment when the …rm relies on implicit incentive contracts (i.e., bonus payments). Two natural forms of job design are compared: (i) individual accountability, where each agent is assigned to a particular job and assumes full responsibility for its outcome; and (ii) team accountability, where a group of agents share responsibility for a job and are jointly accountable for its outcome. The key trade-o ¤ is that team accountability mitigates multitasking problem but may weaken the implicit contracts. The optimal job design follows a cut-o ¤ rule: …rms with high reputation concerns opt for team whereas …rms with low reputation concerns opt for individual accountability. Team accountability is more likely the more acute is the multitasking problem. However, the cut-o ¤ rule need not hold if the …rm combines implicit incentives with explicit pay-per-performance contracts. 1.
Keyphrases
team accountability optimal job design cut-o rule individual accountability high reputation concern opt job design multitasking problem agent share responsibility particular job full responsibility rm relies natural form key trade-o implicit contract explicit pay-per-performance contract low reputation concern rm combine implicit incentive team whereas rms multitasking environment implicit incentive contract
