Cheating in the Workplace: An Experimental Study of the Impact of Bonuses and Productivity
University of Oxford - Department of Economics
Victoria L. Prowse
Cornell University - Department of Economics; Institute for the Study of Labor (IZA)
University of Southampton
IZA Discussion Paper No. 6725
We use an online real-effort experiment to investigate how bonus-based pay and worker productivity interact with workplace cheating. Firms often use bonus-based compensation plans, such as group bonuses and firm-wide profit sharing, that induce considerable uncertainty in how much workers are paid. Exposing workers to a compensation scheme based on random bonuses makes them cheat more but has no effect on their productivity. We also find that more productive workers behave more dishonestly. We explain how these results suggest that workers' cheating behavior responds to the perceived fairness of their employer's compensation scheme.
Number of Pages in PDF File: 23
Keywords: bonus, compensation, cheating, dishonesty, lying, employee crime, productivity, slider task, real effort, experiment
JEL Classification: C91, J33working papers series
Date posted: July 21, 2012
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo6 in 0.407 seconds