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Wage delegation in the field

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  • Sabrina Jeworrek
  • Vanessa Mertins

Abstract

By conducting a natural field experiment, we analyze the managerial policy of delegating the wage choice to employees. We find that this policy enhances performance significantly, which is remarkable since allocated wage premiums of the same size have no effect at all. Observed self‐imposed wage restraints and absence of negative peer effects speak in favor of wage delegation, although the chosen wage premium levels severely dampen its net value. Additional experimental and survey data provide important insights into employees' underlying motivations.

Suggested Citation

  • Sabrina Jeworrek & Vanessa Mertins, 2019. "Wage delegation in the field," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 28(4), pages 656-669, November.
    • Handle: RePEc:bla:jemstr:v:28:y:2019:i:4:p:656-669
    DOI: 10.1111/jems.12313
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    Cited by:

    1. Köhler, Katrin & Pagel, Beatrice & Rau, Holger A., 2015. "How worker participation affects reciprocity under minimum remuneration policies: Experimental evidence," University of Göttingen Working Papers in Economics 267, University of Goettingen, Department of Economics.
    2. José J. Domínguez & Giulio Ecchia & Natalia Montinari & Raimondello Orsini, 2023. "When Workplace Democracy Backfires. Lab Evidence on Honesty and Cooperation," ThE Papers 23/02, Department of Economic Theory and Economic History of the University of Granada..
    3. Christian Brück & Thorsten Knauer & Harald Meier & Anja Schwering, 2021. "Self-set salaries and creativity," Journal of Business Economics, Springer, vol. 91(1), pages 91-121, February.
    4. Vanessa Mertins & Christian Walter, 2021. "In absence of money: a field experiment on volunteer work motivation," Experimental Economics, Springer;Economic Science Association, vol. 24(3), pages 952-984, September.
    5. Adrian Chadi & Sabrina Jeworrek & Vanessa Mertins, 2017. "When the Meaning of Work Has Disappeared: Experimental Evidence on Employees’ Performance and Emotions," Management Science, INFORMS, vol. 63(6), pages 1696-1707, June.
    6. Marco Faillo & Costanza Piovanelli, 2017. "Wage delegation and intrinsic motivation: an experimental study," CEEL Working Papers 1701, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
    7. Franke, Jörg & Gurtoviy, Ruslan & Mertins, Vanessa, 2016. "Workers’ participation in wage setting: A gift-exchange experiment," Journal of Economic Psychology, Elsevier, vol. 56(C), pages 151-162.

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    More about this item

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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