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Sticks and carrots: the effectiveness of penalties versus bonuses

Van der Stede, Wim ORCID: 0000-0003-3005-2410 (2021) Sticks and carrots: the effectiveness of penalties versus bonuses. LSE Business Review (02 Sep 2021). Blog Entry.

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Abstract

Should organisations penalise employees who underperform or should they limit themselves to rewarding good performance? This is not a trivial question since financial incentives are an important part of employers’ toolkit. Wim van der Stede and colleagues have uncovered evidence that when an employee is penalised their performance improves the following month. However, he also finds diminishing sensitivity for both penalties and bonuses as the amounts increase. This occurs faster for penalties, creating a tipping point when bonuses become more effective.

Item Type: Online resource (Blog Entry)
Official URL: https://blogs.lse.ac.uk/businessreview/
Additional Information: © 2021 The Author
Divisions: Accounting
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Date Deposited: 08 Nov 2021 10:12
Last Modified: 05 Jan 2022 11:21
URI: http://eprints.lse.ac.uk/id/eprint/112248

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