Management practices: incentives, team formation, and mentoring

Abstract

The utilisation of incentives is essential for the success of organisations. Given the complexity of the real business world and the scarcity of high quality data, the academic literature on the impacts of incentives remains scant.This thesis contributes to the literature by studying three different incentives including remuneration for multitasking group leaders, team formation rules, and determinants of manager-employee mentoring relationships. I map my economic analysis into three unique datasets to examine the incentive effects. I conducted a field experiment in two Chinese factories. I introduced rank incentives and monetary prizes to group leaders regarding their organisational behaviours. As a result, I find a significant increase in group performance. In another study, I designed a laboratory experiment with two stages of a real effort task to test the possible dynamic effects of optimal team composition. The results show that pairing the worst performing individuals with the best yields 20% lower first stage effort than random matching. Pairing the best with the best, however, yields 5% higher first stage effort than random matching. Last but not the least, I study both non-monetary and monetary determinants of mentoring relationships between managers and employees in British firms by using data from the Workplace Employment Relations Survey. In particular, I focus on the role of a manager’s gender and the use of managerial incentive schemes. Past literature suggests a significant association between a manager’s gender and mentoring behaviour. However, using longitudinal data this paper finds that the significant relationship disappears once firm fixed effects are included. The results also show a positive but weak association between managerial incentive schemes and managers’ mentoring behaviour. Widespread mentorships are more likely to be found in firms where managers’ payments are linked to organisational profits.

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ORCID for Thomas Gall: orcid.org/0000-0003-2257-1405

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