Awards as Compensation

9 Pages Posted: 25 Oct 2011

Date Written: Spring 2007


Awards are non‐material, extrinsic compensation taking the form of orders, medals, decorations and prizes. They have been widely used in monarchies and republics, private organizations, not‐for‐profit and profit‐oriented firms. Nevertheless, they have so far not received much attention. This paper develops empirically testable hypotheses, analysing the determinants of the supply of awards. The hypotheses refer to the possibility of using awards, the effectiveness of awards, and the capacity to maintain the scarcity value of awards. As the number of awards bestowed cannot (at least so far) be measured adequately, empirical evidence is adduced by way of illustrative examples.

Keywords: compensation, incentives, motivation, awards, orders, distinction, principal‐agent

Suggested Citation

Frey, Bruno S., Awards as Compensation (Spring 2007). European Management Review, Vol. 4, Issue 1, pp. 6-14, 2007. Available at SSRN: or

Bruno S. Frey (Contact Author)

CREMA ( email )

Südstrasse 11
Zurich, CH 8008
+41 44 380 00 78 (Phone)

University of Basel ( email )

Peter Merian-Weg 6
Basel, 4002

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