IDEAS home Printed from https://ideas.repec.org/a/gam/jadmsc/v9y2019i3p72-d268770.html
   My bibliography  Save this article

The Effect of Monetary Incentives on Individual and Organizational Performance in an Italian Public Institution

Author

Listed:
  • Gian Carlo Cainarca

    (Department of Mechanical, Energy, Management and Transportation Engineering, University of Genoa, Via Opera Pia 15, 16145 Genoa, Italy)

  • Francesco Delfino

    (Department of Mechanical, Energy, Management and Transportation Engineering, University of Genoa, Via Opera Pia 15, 16145 Genoa, Italy)

  • Linda Ponta

    (LIUC, Cattaneo University, Corso G. Matteotti 22, 21053 Castellanza (VA), Italy)

Abstract

This paper addresses the role of monetary incentives with regard to the performance of employees and organizations. The distribution of monetary incentives among employees in public administration has been investigated. Specifically, the traditional approach of bureaucracy that pays a premium to each employee, based on the position held, is compared with a merit approach which tends to recognize and reward individual contributions. A task advice centrality indicator and a value index have been defined and used to study the performance of employees. The results show a modification of individual behaviors, in line with the theoretical foundations and predictions formulated.

Suggested Citation

  • Gian Carlo Cainarca & Francesco Delfino & Linda Ponta, 2019. "The Effect of Monetary Incentives on Individual and Organizational Performance in an Italian Public Institution," Administrative Sciences, MDPI, vol. 9(3), pages 1-19, September.
    • Handle: RePEc:gam:jadmsc:v:9:y:2019:i:3:p:72-:d:268770
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2076-3387/9/3/72/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2076-3387/9/3/72/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-864, October.
    2. Ladley, Daniel & Wilkinson, Ian & Young, Louise, 2015. "The impact of individual versus group rewards on work group performance and cooperation: A computational social science approach," Journal of Business Research, Elsevier, vol. 68(11), pages 2412-2425.
    3. Rosen, Sherwin, 1986. "Prizes and Incentives in Elimination Tournaments," American Economic Review, American Economic Association, vol. 76(4), pages 701-715, September.
    4. P. B. Beaumont & R. I. D. Harris, 2003. "Internal Wage Structures and Organizational Performance," British Journal of Industrial Relations, London School of Economics, vol. 41(1), pages 53-70, March.
    5. Boswell, Wendy R. & Bingham, John B. & Colvin, Alexander J.S., 2006. "Aligning employees through "line of sight"," Business Horizons, Elsevier, vol. 49(6), pages 499-509.
    6. Bannò, Mariasole & Sgobbi, Francesca, 2010. "Firm participation in financial incentive programmes: The case of subsidies for outward internationalisation," Journal of Policy Modeling, Elsevier, vol. 32(6), pages 792-803, November.
    7. Bruno S. Frey & Fabian Homberg & Margit Osterloh, 2013. "Organizational Control Systems and Pay-for-Performance in the Public Service," CREMA Working Paper Series 2013-11, Center for Research in Economics, Management and the Arts (CREMA).
    8. Knoeber, Charles R & Thurman, Walter N, 1994. "Testing the Theory of Tournaments: An Empirical Analysis of Broiler Production," Journal of Labor Economics, University of Chicago Press, vol. 12(2), pages 155-179, April.
    9. Luthans, Fred, 1973. "The contingency theory of management : A path out of the jungle," Business Horizons, Elsevier, vol. 16(3), pages 67-72, June.
    10. Donaldson, David & Weymark, John A., 1980. "A single-parameter generalization of the Gini indices of inequality," Journal of Economic Theory, Elsevier, vol. 22(1), pages 67-86, February.
    11. Lazear, Edward P, 1989. "Pay Equality and Industrial Politics," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 561-580, June.
    12. Booth, Alison L & Frank, Jeff, 1999. "Earnings, Productivity, and Performance-Related Pay," Journal of Labor Economics, University of Chicago Press, vol. 17(3), pages 447-463, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Linda Ponta & Francesco Delfino & Gian Carlo Cainarca, 2020. "The Role of Monetary Incentives: Bonus and/or Stimulus," Administrative Sciences, MDPI, vol. 10(1), pages 1-18, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:eee:labchp:v:3:y:1999:i:pb:p:2373-2437 is not listed on IDEAS
    2. Josse Delfgaauw & Robert Dur & Arjan Non & Willem Verbeke, 2015. "The Effects of Prize Spread and Noise in Elimination Tournaments: A Natural Field Experiment," Journal of Labor Economics, University of Chicago Press, vol. 33(3), pages 521-569.
    3. Linda Ponta & Francesco Delfino & Gian Carlo Cainarca, 2020. "The Role of Monetary Incentives: Bonus and/or Stimulus," Administrative Sciences, MDPI, vol. 10(1), pages 1-18, February.
    4. Sun, Sophia Li & Habib, Ahsan, 2020. "Determinants and consequences of tournament incentives: A survey of the literature in accounting and finance," Research in International Business and Finance, Elsevier, vol. 54(C).
    5. Eriksson, Tor, 1999. "Executive Compensation and Tournament Theory: Empirical Tests on Danish Data," Journal of Labor Economics, University of Chicago Press, vol. 17(2), pages 262-280, April.
    6. Edward P. Lazear & Kathryn L. Shaw, 2007. "Personnel Economics: The Economist's View of Human Resources," Journal of Economic Perspectives, American Economic Association, vol. 21(4), pages 91-114, Fall.
    7. P.-J. Jost & M. Kräkel, 2005. "Preemptive behavior in sequential-move tournaments with heterogeneous agents," Economics of Governance, Springer, vol. 6(3), pages 245-252, November.
    8. Christian Grund & Niels Westergaard-Nielsen, 2008. "The Dispersion of Employees' Wage Increases and Firm Performance," ILR Review, Cornell University, ILR School, vol. 61(4), pages 485-501, July.
    9. Bingley, P. & Eriksson, T, 2001. "Pay Spread and Skewness. Employee Effort and Firm Productivity," Papers 01-2, Aarhus School of Business - Department of Economics.
    10. David Berri & R. Jewell, 2004. "Wage inequality and firm performance: Professional basketball's natural experiment," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 32(2), pages 130-139, June.
    11. Mueller-Langer Frank & Andreoli-Versbach Patrick, 2017. "Leading-Effect, Risk-Taking and Sabotage in Two-Stage Tournaments: Evidence from a Natural Experiment," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 237(1), pages 1-28, February.
    12. Miklos-Thal, Jeanine & Ullrich, Hannes, 2010. "Effort in Nomination Contests: Evidence from Professional Soccer," MPRA Paper 24340, University Library of Munich, Germany.
    13. Miklós-Thal, Jeanine & Ullrich, Hannes, 2009. "Nomination contests: theory and empirical evidence from professional soccer," ZEW Discussion Papers 09-027, ZEW - Leibniz Centre for European Economic Research.
    14. Ajay Kalra & Mengze Shi, 2001. "Designing Optimal Sales Contests: A Theoretical Perspective," Marketing Science, INFORMS, vol. 20(2), pages 170-193, December.
    15. Harbring, Christine & Irlenbusch, Bernd, 2003. "An experimental study on tournament design," Labour Economics, Elsevier, vol. 10(4), pages 443-464, August.
    16. Waldman, Michael, 2013. "Classic promotion tournaments versus market-based tournaments," International Journal of Industrial Organization, Elsevier, vol. 31(3), pages 198-210.
    17. Anja Schöttner & Veikko Thiele, 2010. "Promotion Tournaments and Individual Performance Pay," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(3), pages 699-731, September.
    18. Alexander Matros, 2006. "Elimination Tournaments where Players Have Fixed Resources," Working Paper 205, Department of Economics, University of Pittsburgh, revised Jan 2006.
    19. Tor Eriksson & Sabrina Teyssier & Marie‐Claire Villeval, 2009. "Self‐Selection And The Efficiency Of Tournaments," Economic Inquiry, Western Economic Association International, vol. 47(3), pages 530-548, July.
    20. Kräkel, Matthias, 2004. "Emotions and Incentives," IZA Discussion Papers 1270, Institute of Labor Economics (IZA).
    21. Shenkman, Evgenia & Coates, Dennis & Chadov, Aleksei & Parshakov, Petr, 2022. "Team vs. individual tournament: An organizer's dilemma," Journal of Economic Behavior & Organization, Elsevier, vol. 198(C), pages 476-492.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jadmsc:v:9:y:2019:i:3:p:72-:d:268770. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.