Journal of Economic Perspectives
ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)
Compensation and Incentives in the Workplace
Journal of Economic Perspectives
vol. 32,
no. 3, Summer 2018
(pp. 195–214)
(Complimentary)
Abstract
Labor is supplied because most of us must work to live. Indeed, it is called "work" in part because without compensation, the overwhelming majority of workers would not otherwise perform the tasks. The theme of this essay is that incentives affect behavior and that economics as a science has made good progress in specifying how compensation and its form influences worker effort. This is a broad topic, and the purpose here is not a comprehensive literature review on each of many topics. Instead, a sample of some of the most applicable papers are discussed with the goal of demonstrating that compensation, incentives, and productivity are inseparably linked.Citation
Lazear, Edward P. 2018. "Compensation and Incentives in the Workplace." Journal of Economic Perspectives, 32 (3): 195–214. DOI: 10.1257/jep.32.3.195Additional Materials
JEL Classification
- D12 Consumer Economics: Empirical Analysis
- D82 Asymmetric and Private Information; Mechanism Design
- D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
- J22 Time Allocation and Labor Supply
- J31 Wage Level and Structure; Wage Differentials
- J33 Compensation Packages; Payment Methods
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