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Pay and Performance in a Call Centre; Principals and Agents or Principally Angels?

42 Pages Posted: 11 Feb 2010  

Karl O. Aarbu

Vesta Forsikring AS

Gaute Torsvik

University of Bergen - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Date Written: December 3, 2007

Abstract

We use data from a pay reform in an insurance company to contrast different theories of work motivations. The management installed performance pay to boost sales in the customer service centre of the company. The reform was successful. The bonus scheme gave the operators both self-regarding and other-regarding incentives to increase sales. The increase in sales does therefore not in itself help us identify the underlying motivation of the workers. However, when we examine the evolution of the design and impact of the scheme, we conclude that the standard principal-agent model best explains the patterns in our data.

Keywords: Team incentives, multi-task, fairness, reciprocity

JEL Classification: C23, C72, J33, M52

Suggested Citation

Aarbu, Karl O. and Torsvik, Gaute, Pay and Performance in a Call Centre; Principals and Agents or Principally Angels? (December 3, 2007). NHH Dept. of Economics Discussion Paper No. 33/2007. Available at SSRN: https://ssrn.com/abstract=1550662 or http://dx.doi.org/10.2139/ssrn.1550662

Karl O. Aarbu (Contact Author)

Vesta Forsikring AS ( email )

Folke Bernadottes vei 50
N-5020 Bergen
Norway

Gaute Torsvik

University of Bergen - Department of Economics ( email )

Fosswinckelsgt. 6
N-5007 Bergen
Norway
55589225 (Phone)
55589210 (Fax)

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

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