Header

UZH-Logo

Maintenance Infos

Tournament compensation systems, employee heterogeneity, and firm performance


Backes-Gellner, Uschi; Pull, Kerstin (2013). Tournament compensation systems, employee heterogeneity, and firm performance. Human Resource Management, 52(3):375-398.

Abstract

Tournament compensation systems are widely used in practice and have been extensively analyzed theoretically. However, one major problem has hardly been studied in a company context so far: Although it is theoretically well understood that tournament compensation systems are only effective when employees are homogeneous, it has rarely been analyzed what companies can do when they are confronted with employee heterogeneity. In our article, we derive hypotheses on the performance effects of tournament compensation systems in a context of employee heterogeneity based on tournament and expectancy theory. Using personnel records from incentive travel contests, we are able to show that performance is lower in a situation with employee heterogeneity, but that in heterogeneous tournaments, incentives may still work for a subgroup of employees whom we term the “threshold group.” In addition, we also show how companies manage to design the information disclosure systems necessary to install effective “handicapping” or “league-building” systems in order to increase the effort-performance expectancy.

Abstract

Tournament compensation systems are widely used in practice and have been extensively analyzed theoretically. However, one major problem has hardly been studied in a company context so far: Although it is theoretically well understood that tournament compensation systems are only effective when employees are homogeneous, it has rarely been analyzed what companies can do when they are confronted with employee heterogeneity. In our article, we derive hypotheses on the performance effects of tournament compensation systems in a context of employee heterogeneity based on tournament and expectancy theory. Using personnel records from incentive travel contests, we are able to show that performance is lower in a situation with employee heterogeneity, but that in heterogeneous tournaments, incentives may still work for a subgroup of employees whom we term the “threshold group.” In addition, we also show how companies manage to design the information disclosure systems necessary to install effective “handicapping” or “league-building” systems in order to increase the effort-performance expectancy.

Statistics

Citations

5 citations in Web of Science®
7 citations in Scopus®
Google Scholar™

Altmetrics

Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Business Administration
Dewey Decimal Classification:330 Economics
Language:English
Date:2013
Deposited On:29 Jan 2014 09:33
Last Modified:05 Apr 2016 17:27
Publisher:John Wiley & Sons, Inc.
ISSN:1099-050X
Publisher DOI:https://doi.org/10.1002/hrm.21535
Other Identification Number:merlin-id:8334

Download

Full text not available from this repository.
View at publisher