Contracts, Individual Revenue and Performance

UNCG Author/Contributor (non-UNCG co-authors, if there are any, appear on document)
Daniel T. Winkler, Professor (Creator)
The University of North Carolina at Greensboro (UNCG )
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Abstract: In some jobs individual workers have control over revenue, effort and productivity. These jobs include professional firms for law, medicine and consulting. They include personal services in areas from hair styling to taxi driving. The firm offers contracts that allow for a sharing of risks and rewards. These incentives include a split of output between the firm and worker and employee ownership. For U.S. real estate agents, a choice is available between splitting revenue with the firm or retaining 100 % above a fixed prepaid minimum. These are equity and sequential debt contracts. Under the sequential debt contract, effort increases but output per hour declines. Separately, agents increase effort and productivity if offered ownership in the firm, effectively a claim on others’ performance.

Additional Information

Journal of Labor Research, 33(4), 545-562
Language: English
Date: 2012
Debt contracts, Effort, Productivity

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