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Yes, Managers Should be Paid Like Bureaucrats


Frey, Bruno S; Osterloh, Margit (2004). Yes, Managers Should be Paid Like Bureaucrats. Working paper series / Institute for Empirical Research in Economics No. 187, University of Zurich.

Abstract

"Corporate scandals, reflected in excessive management compensation and fraudulent accounts, cause great damage. Agency theory’s insistence to link the compensation of mangers and directors as closely as possible to firm performance is a major reason for these scandals.nThey cannot be overcome by improving variable pay for performance as selfish extrinsicnmotivation is reinforced. Based on the common pool approach to the firm, institutions arenproposed, serving to raise intrinsically motivated corporate virtue. More importance is to benattributed to fixed pay and strengthening the legitimacy of authorities by procedural fairness, relational contracts and organizational citizenship behavior."

Abstract

"Corporate scandals, reflected in excessive management compensation and fraudulent accounts, cause great damage. Agency theory’s insistence to link the compensation of mangers and directors as closely as possible to firm performance is a major reason for these scandals.nThey cannot be overcome by improving variable pay for performance as selfish extrinsicnmotivation is reinforced. Based on the common pool approach to the firm, institutions arenproposed, serving to raise intrinsically motivated corporate virtue. More importance is to benattributed to fixed pay and strengthening the legitimacy of authorities by procedural fairness, relational contracts and organizational citizenship behavior."

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Institute for Empirical Research in Economics (former)
Dewey Decimal Classification:330 Economics
Language:English
Date:July 2004
Deposited On:29 Nov 2011 22:32
Last Modified:12 Aug 2017 12:55
Series Name:Working paper series / Institute for Empirical Research in Economics
ISSN:1424-0459
Official URL:http://www.econ.uzh.ch/wp.html

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