Helpless in Finance: The Cost of Helping Effort Among Bank Employees |
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| Authors: | Michelle Brown John S. Heywood |
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| Affiliation: | (1) Department of Management and Marketing, University of Melbourne, Parkville, VIC 3010, Australia;(2) Industrial and Labor Economics Group, Business School, University of Birmingham, Birmingham, B15 2TT, UK;(3) Department of Economics, University of Wisconsin-Milwaukee, P.O. Box 413, Milwaukee, WI 53201, USA |
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| Abstract: | ![]()
Theory suggests that individual performance pay increases effort but may reduce the incentive to help co-workers. In an original survey of finance industry employees subject to individual performance pay, we demonstrate that those workers who report they do not help co-workers earn significantly more. This result is particularly strong for those workers with the strongest individual performance pay incentives. Moreover, when those workers report that their coworkers help them, they also earn significantly more. These dual results are consistent with a strong incentive to free-ride on the helping effort of others in the face of individual performance pay. |
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| Keywords: | Helping effort Free-riding Performance pay |
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