Market Competition and the Effectiveness of Performance Pay

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KHASHABI, Pooyan, Tobias KRETSCHMER, Nick ZUBANOV, Matthias HEINZ, Guido FRIEBEL, 2021. Market Competition and the Effectiveness of Performance Pay. In: Organization Science. Institute for Operations Research and the Management Sciences (INFORMS). 32(2), pp. 334-351. ISSN 1047-7039. eISSN 1526-5455. Available under: doi: 10.1287/orsc.2020.1392

@article{Khashabi2021Marke-52268, title={Market Competition and the Effectiveness of Performance Pay}, year={2021}, doi={10.1287/orsc.2020.1392}, number={2}, volume={32}, issn={1047-7039}, journal={Organization Science}, pages={334--351}, author={Khashabi, Pooyan and Kretschmer, Tobias and Zubanov, Nick and Heinz, Matthias and Friebel, Guido} }

<rdf:RDF xmlns:dcterms="" xmlns:dc="" xmlns:rdf="" xmlns:bibo="" xmlns:dspace="" xmlns:foaf="" xmlns:void="" xmlns:xsd="" > <rdf:Description rdf:about=""> <dcterms:isPartOf rdf:resource=""/> <dspace:hasBitstream rdf:resource=""/> <dcterms:hasPart rdf:resource=""/> <dcterms:rights rdf:resource=""/> <dc:creator>Kretschmer, Tobias</dc:creator> <dcterms:available rdf:datatype="">2021-01-04T13:34:08Z</dcterms:available> <dcterms:isPartOf rdf:resource=""/> <dspace:isPartOfCollection rdf:resource=""/> <dc:language>eng</dc:language> <dc:date rdf:datatype="">2021-01-04T13:34:08Z</dc:date> <dc:contributor>Zubanov, Nick</dc:contributor> <dc:contributor>Heinz, Matthias</dc:contributor> <dc:creator>Heinz, Matthias</dc:creator> <dcterms:issued>2021</dcterms:issued> <dc:contributor>Khashabi, Pooyan</dc:contributor> <dc:creator>Khashabi, Pooyan</dc:creator> <dc:rights>Attribution 4.0 International</dc:rights> <dc:creator>Friebel, Guido</dc:creator> <dcterms:title>Market Competition and the Effectiveness of Performance Pay</dcterms:title> <dc:contributor>Kretschmer, Tobias</dc:contributor> <dc:contributor>Friebel, Guido</dc:contributor> <dspace:isPartOfCollection rdf:resource=""/> <dcterms:abstract xml:lang="eng">It is well established that the effectiveness of pay-for-performance (PfP) schemes depends on employee- and organization-specific factors. However, less is known about the moderating role of external forces such as market competition. Our theory posits that competition generates two counteracting effects—the residual market and competitor response effects—that vary with competition and jointly generate a curvilinear relationship between PfP effectiveness and competition. Weak competition discourages effort response to PfP because there is little residual market to gain from rivals, whereas strong competition weakens incentives because an offsetting response from competitors becomes more likely. PfP hence has the strongest effect under moderate competition. Field data from a bakery chain and its competitive environment confirm our theory and let us refute several alternative interpretations.</dcterms:abstract> <foaf:homepage rdf:resource="http://localhost:8080/jspui"/> <dc:creator>Zubanov, Nick</dc:creator> <bibo:uri rdf:resource=""/> <void:sparqlEndpoint rdf:resource="http://localhost/fuseki/dspace/sparql"/> </rdf:Description> </rdf:RDF>

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