Treating Equals Unequally: Incentives in Teams, Workers' Motivation and Production Technology

34 Pages Posted: 2 Feb 2009

See all articles by Sebastian J. Goerg

Sebastian J. Goerg

Florida State University - Department of Economics; Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods

Sebastian Kube

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods; University of Bonn

Ro'i Zultan

Ben-Gurion University of the Negev

Abstract

The importance of fair and equal treatment of workers is at the heart of the debate in organizational management. In this regard, we study how reward mechanisms and production technologies affect effort provision in teams. Our experimental results demonstrate that unequal rewards can potentially increase productivity by facilitating coordination, and that the effect strongly interacts with the exact shape of the production function. Taken together, our data highlight the relevance of the production function for organization construction and suggest that equal treatment of equals is neither a necessary nor a sufficient prerequisite for eliciting high performance in teams.

Keywords: team incentives, equity, production function, social preferences, laboratory experiment, discriminating mechanism, mechanism desig

JEL Classification: C92, D23, D63, J31, J33, J41, M12, M52

Suggested Citation

Goerg, Sebastian J. and Kube, Sebastian and Zultan, Ro'i, Treating Equals Unequally: Incentives in Teams, Workers' Motivation and Production Technology. IZA Discussion Paper No. 3959. Available at SSRN: https://ssrn.com/abstract=1336056

Sebastian J. Goerg (Contact Author)

Florida State University - Department of Economics ( email )

Tallahassee, FL 30306-2180
United States
+1 (850) 644-7083 (Phone)

HOME PAGE: http://www.s-goerg.de

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

HOME PAGE: http://www.coll.mpg.de

Sebastian Kube

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

University of Bonn

BWL 1
Adenauerallee 24-42
Bonn, D-53012
Germany

Ro'i Zultan

Ben-Gurion University of the Negev ( email )

1 Ben-Gurion Blvd
Beer-Sheba 84105, 84105
Israel

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