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Rewarding idleness

Rewarding idleness
Rewarding idleness
Market wages reflect expected productivity conditional on signals of past performance and past experience. These signals are generated at least partially on the job and create incentives for agents to choose high‐profile and highly visible tasks. When engaging in visible tasks can lead to losses for which the agent is not liable, a principal may profitably distort corporate investments and reward schemes to increase the opportunity cost of these tasks. This distortion may decrease welfare as it prevents the efficient discovery of workers’ talent. Heterogeneity in employee types induces substantial diversity in organizational and contractual choices, particularly regarding the extent to which conspicuous activities are tolerated or encouraged, the composition of corporate infrastructure, and contingent wages.
1097-3923
Gall, Thomas
8df67f3d-fe3c-4a3f-8ce7-e2090557fcd4
Canidio, Andrea
a4e8d96b-a879-4fb4-a661-d7fb9e3754ff
Gall, Thomas
8df67f3d-fe3c-4a3f-8ce7-e2090557fcd4
Canidio, Andrea
a4e8d96b-a879-4fb4-a661-d7fb9e3754ff

Gall, Thomas and Canidio, Andrea (2019) Rewarding idleness. Journal of Public Economic Theory. (doi:10.1111/jpet.12362).

Record type: Article

Abstract

Market wages reflect expected productivity conditional on signals of past performance and past experience. These signals are generated at least partially on the job and create incentives for agents to choose high‐profile and highly visible tasks. When engaging in visible tasks can lead to losses for which the agent is not liable, a principal may profitably distort corporate investments and reward schemes to increase the opportunity cost of these tasks. This distortion may decrease welfare as it prevents the efficient discovery of workers’ talent. Heterogeneity in employee types induces substantial diversity in organizational and contractual choices, particularly regarding the extent to which conspicuous activities are tolerated or encouraged, the composition of corporate infrastructure, and contingent wages.

Text
idleness-JPET-revision-final - Accepted Manuscript
Restricted to Repository staff only until 1 February 2020.
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More information

Accepted/In Press date: 23 January 2019
e-pub ahead of print date: 1 February 2019

Identifiers

Local EPrints ID: 428166
URI: https://eprints.soton.ac.uk/id/eprint/428166
ISSN: 1097-3923
PURE UUID: 6533f89d-0d18-447d-9564-f57923fbfb7e
ORCID for Thomas Gall: ORCID iD orcid.org/0000-0003-2257-1405

Catalogue record

Date deposited: 13 Feb 2019 17:30
Last modified: 10 Dec 2019 01:35

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