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Reciprocity in Organisations

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  • Englmaier, Florian
  • Kolaska, Thomas
  • Leider, Stephen

Abstract

Recent laboratory evidence suggests that personality traits, in particular social preferences, may affect contractual outcomes under moral hazard. Using the British Workplace Employment Relations Survey 2004 we find that behaviour of employers and employees is consistent with the presence of gift-exchange motives: firms that screen applicants for personality are less likely to pay low wages and more likely to provide (non-pecuniary) benefits. Firms likewise benefit from employee screening as they can implement more team-working and are generally more successful. Other human resource management practices only poorly predict these patterns. Moreover, there is no association between dismissals and personality tests, indicating that personality tests do not merely improve the fit between applicant and employer. Hence, we conclude that motivation based on gift-exchange motives is a plausible explanation for our results.

Suggested Citation

  • Englmaier, Florian & Kolaska, Thomas & Leider, Stephen, 2015. "Reciprocity in Organisations," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 504, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    • Handle: RePEc:trf:wpaper:504
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    Cited by:

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    2. Masakure, Oliver, 2016. "The effect of employee loyalty on wages," Journal of Economic Psychology, Elsevier, vol. 56(C), pages 274-298.

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    More about this item

    Keywords

    Reciprocity; Organisational Structure; Employee Compensation;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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