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Redesigning Teams and Incentives: A Real Effort Experiment with Managers of a Merged Company

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Listed:
  • Claude Montmarquette
  • Jean-Louis Rullière
  • Marie Claire Villeval
  • Romain Zeiliger

Abstract

After a merger, company officials face the challenge to uniform compensation schemes and to redesign teams with managers originating from different incentives and working habits. In this paper, we offer a new way to investigate in post-merger the relationship between executive pay and performance, allowing to dissociate the respective influence of shifts occurring both in compensation incentives and in team composition. The results of a real effort experiment conducted with managers within a large pharmaceutical company show that not only changes in compensation incentives affect performance but also that both managers' past compensation schemes and company cultures matter for cooperation. The efficiency of a new compensation package is conditional on the reshuffling of teams and the past of incentives within the new teams.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Claude Montmarquette & Jean-Louis Rullière & Marie Claire Villeval & Romain Zeiliger, 2002. "Redesigning Teams and Incentives: A Real Effort Experiment with Managers of a Merged Company," CIRANO Working Papers 2002s-86, CIRANO.
    • Handle: RePEc:cir:cirwor:2002s-86
    as

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    File URL: https://cirano.qc.ca/files/publications/2002s-86.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Real effort experiments; Executive and team-based compensation; Past incentives and firms' culture; Mergers; Expérience à effort réel; Rémunération des gestionnaires et des équipes; Habitudes passées et culture d'entreprises; Fusions;
    All these keywords.

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • 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

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