Incentives for Helping on the Job: Theory and Evidence

Posted: 8 Oct 1996

See all articles by Gerald T. Garvey

Gerald T. Garvey

Blackrock

Robert W. Drago

Pennsylvania State University - Department of Labor Studies and Industrial Relations

Date Written: Undated

Abstract

Recent advances in incentive theory stress the multi- dimensional nature of agent effort and specifically cases where workers affect one another's performance through "helping" efforts. This paper models helping efforts as determined by the compensation package and task allocation. The model is tested with Australian evidence on reported helping efforts within workgroups. The evidence consistently supports the hypothesis that helping efforts are reduced, while individual efforts are increased, when promotion incentives are strong. Piece rates and profit-sharing appear to have little effect on helping efforts. Contrary to the predictions of some recent theoretical models, task variety and helping efforts are positively correlated.

JEL Classification: J33, J22

Suggested Citation

Garvey, Gerald T. and Drago, Robert W., Incentives for Helping on the Job: Theory and Evidence (Undated ). Available at SSRN: https://ssrn.com/abstract=3390

Gerald T. Garvey (Contact Author)

Blackrock ( email )

Level 37, Chifley Tower
2 Chfiley Square
Sydney, NSW 2000
Australia
+61 2 9272 2388 (Phone)

Robert W. Drago

Pennsylvania State University - Department of Labor Studies and Industrial Relations ( email )

University Park, PA 16802
United States
814-865-0751 (Phone)
814-863-3578 (Fax)

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