An Empirical Analysis of Continuing Improvements Following the Implementation of a Performance-Based Compensation Plan
| Citations: | 3 - 0 self |
BibTeX
@MISC{Banker_anempirical,
author = {Rajiv D. Banker and Seok-young Lee and Gordon Potter and Dhinu Srinivasan},
title = {An Empirical Analysis of Continuing Improvements Following the Implementation of a Performance-Based Compensation Plan},
year = {}
}
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Abstract
Continuing performance improvement subsequent to the implementation of a pay-forperformance plan may result because more productive employees self-select into the firm (selection effect) or because employees allocate more effort to learn how to perform their tasks better (effort effect). Individual performance data for more than 3,000 employees of a retail firm are analyzed to evaluate these alternative sources of continuing productivity improvement. Following the implementation of the incentive plan, more productive employees are attracted and retained by the firm, and these employees are motivated to further improve their productivity. In contrast, the less productive employees exhibit a decline in productivity before leaving the firm. 2 An Empirical Analysis of Continuing Improvements Following the Implementation of a Performance-Based Compensation Plan 1.
