An Empirical Analysis of Employee Responses to Bonuses and Penalties

• 成果类型: Article
• 署名作者: Van der Stede, Wim A.; Wu, Anne; Wu, Steve Yu-Ching
• 署名单位: University of London; London School Economics & Political Science; National Chengchi University; Western University (University of Western Ontario)
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/tar-2017-0141
• 发表日期: 2020
• 页码: 395-412
• 关键词: PROSPECT-THEORY; performance pay; PRODUCTIVITY; turnover; carrots; sticks; BIAS

摘要

We examine how employees respond to bonuses and penalties using a proprietary dataset from an electronic chip manufacturer in China. First, we examine the relative effects of bonuses and penalties and observe a stronger effect on subsequent effort and performance for penalties than for bonuses. Second, we find that the marginal sensitivity of penalties diminishes faster than that of bonuses, indicating that the marginal effect of a bonus may eventually exceed that of a penalty as their value increases. Third, we find an undesirable selection effect of penalties: penalties increase employee turnover, especially for skillful and high-quality workers. These results may help inform our understanding of the observed limited use of penalties in practice due to their bounded effectiveness and possible unintended consequences.