AI summary · arXiv: 2107.01139v3 · econ.TH
The effects of incentives, social norms, and employees' values on work performance
The essentials
- The study examines the relationship between financial incentives, social norms, and personal values in shaping employee behavior and company performance.
- Personal values are found to be the primary drivers of behavior, influencing employees' decisions about task allocation.
- The model incorporates two aspects of management style: monitoring efforts affecting intrinsic motivation and remuneration schemes affecting extrinsic motivation.
- Financial incentives can lead to inefficient levels of cooperation and reinforce value-driven behaviors amplified by emergent social norms.
- A flat wage and a trusting management style lead to the highest output for the company.
- Competitive environments with individual rewards lead to lower levels of cooperation and decreased overall output.
- Controlling management styles can have unintended consequences such as reducing intrinsic motivation and increasing shirking activities.
- The study contributes to a theory of corporate culture where company performance results from interactions between financial incentives, motivational factors, endogenous social norms shaped by personal values influenced by different management styles.
- These findings have important implications for managers seeking to optimize organizational performance while fostering positive workplace cultures that align with employee values.
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