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Pay for Performance with Motivated Employees

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Heterogeneity in intrinsic motivation affects the optimal contract offered to employees in teams. Under individual incentives, the effort exerted by both motivated and selfish employees is distorted. This distortion is mitigated if employees receive a wage based on team performance. As a result, the principal prefers to use team incentives, while motivated employees are better off with individual incentives.

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The BE Journal Of Economic Analysis & Policy, 2018, vol. 18, num. 1, p. 1-8

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Articles publicats en revistes (Economia)

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Pay for Performance with Motivated Employees