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Job Assignments, Intrinsic Motivation and Explicit Incentives

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Author Info
Julia Nafziger ()

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Abstract

This paper considers the interplay of job assignments with the intrinsic and extrinsic motivation of an agent. Job assignments influence the self confidence of the agent, and thereby his intrinsic motivation. Monetary reward allow the principal to complement intrinsic motivation with extrinsic incentives. The main result is that the principal chooses an inefficient job assignment rule to enhance the agent's intrinsic motivation even though she can motivate him with monetary rewards. This shows that, in the presence of intrinsically motivated agents, it is not possible to separate job assignment decisions from incentive provision.

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File URL: ftp://web.bgse.uni-bonn.de/pub/RePEc/bon/bonedp/bgse5_2008.pdf
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Publisher Info
Paper provided by University of Bonn, Germany in its series Bonn Econ Discussion Papers with number bgse5_2008.

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Length: 21
Date of creation: Feb 2008
Date of revision:
Handle: RePEc:bon:bonedp:bgse5_2008

Contact details of provider:
Postal: Bonn Graduate School of Economics, University of Bonn, Adenauerallee 24 - 26, 53113 Bonn, Germany
Fax: +49 228 73 9221
Web page: http://www.bgse.uni-bonn.de/index.php?id=494

For technical questions regarding this item, or to correct its listing, contact: (Daniel Park).

Related research
Keywords: Intrinsic and Extrinsic Motivation; Job Assignments;

Find related papers by JEL classification:
D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
M12 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Personnel Management; Executive Compensation

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Gibbons, Robert & Waldman, Michael, 1999. "Careers in organizations: Theory and evidence," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 36, pages 2373-2437 Elsevier. [Downloadable!] (restricted)
  2. Baker, G.P. & Jensen, M.C. & Murphy, K.J., 1988. "Compensation And Incentives: Practice Vs. Theory," Papers 88-05, Rochester, Business - Managerial Economics Research Center.
    Other versions:
  3. Fairburn, James A & Malcomson, James M, 2001. "Performance, Promotion, and the Peter Principle," Review of Economic Studies, Blackwell Publishing, vol. 68(1), pages 45-66, January.
    Other versions:
  4. Junichiro Ishida, 2006. "Optimal Promotion Policies with the Looking-Glass Effect," Journal of Labor Economics, University of Chicago Press, vol. 24(4), pages 857-878, October. [Downloadable!]
  5. Michael Waldman, 1984. "Job Assignments, Signalling, and Efficiency," RAND Journal of Economics, The RAND Corporation, vol. 15(2), pages 255-267, Summer. [Downloadable!] (restricted)
    Other versions:
  6. Gibbs, Michael, 1995. "Incentive compensation in a corporate hierarchy," Journal of Accounting and Economics, Elsevier, vol. 19(2-3), pages 247-277, April. [Downloadable!] (restricted)
  7. Uri Gneezy & Aldo Rustichini, 2000. "Pay Enough Or Don'T Pay At All," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 791-810, August. [Downloadable!] (restricted)
  8. Alexander K. Koch & Julia Nafziger, 2007. "Job Assignments under Moral Hazard: The Peter Principle Revisited," IZA Discussion Papers 2973, Institute for the Study of Labor (IZA). [Downloadable!]
  9. Bernhardt, Dan, 1995. "Strategic Promotion and Compensation," Review of Economic Studies, Blackwell Publishing, vol. 62(2), pages 315-39, April. [Downloadable!] (restricted)
  10. Kreps, David M, 1997. "Intrinsic Motivation and Extrinsic Incentives," American Economic Review, American Economic Association, vol. 87(2), pages 359-64, May. [Downloadable!] (restricted)
  11. Valsecchi, Irene, 2000. " Job Assignment and Promotion," Journal of Economic Surveys, Blackwell Publishing, vol. 14(1), pages 31-51, February. [Downloadable!] (restricted)
  12. Alexander K. Koch & Eloïc Peyrache, 2006. "Moral Hazard Contracts: Does One Size Fit All?," IZA Discussion Papers 2463, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Alexander K. Koch & Julia Nafziger, 2007. "Job Assignments under Moral Hazard: The Peter Principle Revisited," IZA Discussion Papers 2973, Institute for the Study of Labor (IZA). [Downloadable!]
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