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The University of Southampton
EconomicsPart of Economic, Social and Political Science

1306 Cheating in the Workplace: An Experimental Study of the Impact of Bonuses (M. Vlassopoulos, V.Prowse & D.Gill)

Cheating in the workplace: An experimental study of the impact of bonuses and productivity.

Authors: Michael Vlassopoulos (University of Southampton), Victoria Prowse (Cornell University) and David Gill (Oxford University).

Paper number 1306

We use an online real-effort experiment to investigate how bonus-based pay and worker productivity interact with workplace cheating. Firms often use bonus-based compensation plans, such as group bonuses and firm-wide profit sharing, that induce considerable uncertainty in how much workers are paid. Exposing workers to a compensation scheme based on random bonuses makes them cheat more but has no effect on their productivity. We also find that more productive workers behave more dishonestly. These results are consistent with workers' cheating behavior responding to the perceived fairness of their employer's compensation scheme.

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