Universität zu Köln

Khashabi, Pooyan ORCID: 0000-0001-9554-0277, Heinz, Matthias ORCID: 0000-0001-9635-1160, Zubanov, Nick ORCID: 0000-0001-9141-9330, Kretschmer, Tobias ORCID: 0000-0002-4202-0806 and Friebel, Guido (2021). Market Competition and the Effectiveness of Performance Pay. Organ Sci., 32 (2). S. 334 - 352. CATONSVILLE: INFORMS. ISSN 1047-7039

Full text not available from this repository.

Abstract

It is well established that the effectiveness of pay-for-performance (PfP) schemes depends on employee- and organization-specific factors. However, less is known about the moderating role of external forces such as market competition. Our theory posits that competition generates two counteracting effects-the residual market and competitor response effects-that vary with competition and jointly generate a curvilinear relationship between PfP effectiveness and competition. Weak competition discourages effort response to PfP because there is little residual market to gain from rivals, whereas strong competition weakens incentives because an offsetting response from competitors becomes more likely. PfP hence has the strongest effect under moderate competition. Field data from a bakery chain and its competitive environment confirm our theory and let us refute several alternative interpretations.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Khashabi, Pooyan UNSPECIFIED orcid.org/0000-0001-9554-0277 UNSPECIFIED Heinz, Matthias UNSPECIFIED orcid.org/0000-0001-9635-1160 UNSPECIFIED Zubanov, Nick UNSPECIFIED orcid.org/0000-0001-9141-9330 UNSPECIFIED Kretschmer, Tobias UNSPECIFIED orcid.org/0000-0002-4202-0806 UNSPECIFIED Friebel, Guido UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-596005
DOI:	10.1287/orsc.2020.1392
Journal or Publication Title:	Organ Sci.
Volume:	32
Number:	2
Page Range:	S. 334 - 352
Date:	2021
Publisher:	INFORMS
Place of Publication:	CATONSVILLE
ISSN:	1047-7039
Language:	English
Faculty:	Faculty of Management, Economy and Social Sciences
Divisions:	Center of Excellence C-SEB Faculty of Management, Economics and Social Sciences > Economics > Microeconomics, Institutions and markets > Reinhard Selten Institute
Subjects:	Economics
Uncontrolled Keywords:	Keywords Language TEAM INCENTIVES; MANAGERIAL INCENTIVES; COMPENSATION; STRATEGY; MANAGEMENT; INNOVATION; PRODUCTIVITY; INDIVIDUALS; TECHNOLOGY; INEQUALITY Multiple languages Management Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/59600