It's What You Say Not What You Pay

Please use this identifier to cite or link to this item: http://dspace.mediu.edu.my:8181/xmlui/handle/10261/1761

Title:	It's What You Say Not What You Pay
Keywords:	Change Incentives Coordination Communication Experiments Organizations
Description:	We study manager-employee interactions in experiments set in a corporate environment where payoffs depend on employees coordinating at high effort levels; the underlying game being played repeatedly by employees is a weak-link game. In the absence of managerial intervention subjects invariably slip into coordination failure. To overcome a history of coordination failure, managers have two instruments at their disposal, increasing employees' financial incentives to coordinate and communication with employees. We find that communication is a more effective tool than incentive changes for leading organizations out of performance traps. Examining the content of managers' communication, the most effective messages specifically request a high effort, point out the mutual benefits of high effort, and imply that employees are being paid well. The authors thank the NSF (SES-0214310), the Spanish Ministerio de Educación y Cultura (SEC2002-01352), the BBVA Foundation, and the Barcelona Economics Program of CREA for financial help.
URI:	http://dspace.mediu.edu.my:8181/xmlui/handle/10261/1761
Other Identifiers:	http://hdl.handle.net/10261/1761
Appears in Collections:	Digital Csic

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