Universität zu Köln

Manthei, Kathrin ORCID: 0000-0002-9170-0322, Sliwka, Dirk ORCID: 0000-0002-8026-0165 and Vogelsang, Timo ORCID: 0000-0003-2140-5544 (2023). Talking About Performance or Paying for It? A Field Experiment on Performance Reviews and Incentives. Manage. Sci., 69 (4). CATONSVILLE: INFORMS. ISSN 1526-5501

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Abstract

We investigate the causal effect of performance pay and conversations about performance in 224 stores of a retail chain implementing a field experiment with a 2x2 factorial design. In the performance pay treatments, managers receive a bonus, which is a simple linear function of the profits achieved above a threshold value. In the performance review treatments, managers have to report their activities undertaken to increase profits in regular meetings. We find that whereas performance pay did not yield significant profit increases, performance review conversations increased profits by about 7%. However, when additionally receiving performance pay, the positive effect of performance reviews vanished. We provide evidence from surveys and meeting protocols that performance pay changes the nature of conversations, leading to a stronger self-reliance of store managers, which undermines the value of the performance reviews.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Manthei, Kathrin UNSPECIFIED orcid.org/0000-0002-9170-0322 UNSPECIFIED Sliwka, Dirk UNSPECIFIED orcid.org/0000-0002-8026-0165 UNSPECIFIED Vogelsang, Timo UNSPECIFIED orcid.org/0000-0003-2140-5544 UNSPECIFIED
URN:	urn:nbn:de:hbz:38-670413
DOI:	10.1287/mnsc.2022.4431
Journal or Publication Title:	Manage. Sci.
Volume:	69
Number:	4
Date:	2023
Publisher:	INFORMS
Place of Publication:	CATONSVILLE
ISSN:	1526-5501
Language:	English
Faculty:	Faculty of Management, Economy and Social Sciences
Divisions:	Center of Excellence C-SEB Faculty of Management, Economics and Social Sciences > Business Administration > Corporate Development > Professorship for Business Administration and Human Resources Management
Subjects:	Economics
Uncontrolled Keywords:	Keywords Language HIDDEN COSTS; MANAGEMENT-PRACTICES; COMPENSATION; MOTIVATION; PRODUCTIVITY; DECISION; AGENCY; NORMS; TRUST; IMAGE Multiple languages Management; Operations Research & Management Science Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/67041