The Pros and Cons of Workplace Tournaments

Sheremeta, Roman (2016): The Pros and Cons of Workplace Tournaments. Published in: IZA World of Labor No. 302 (October 2016): pp. 1-10.

Abstract

Tournaments are commonly used in the workplace to determine promotion, assign bonuses, and motivate personal development. Tournament-based contracts can be very effective in eliciting high effort, often outperforming other compensation contracts, but they can also have negative consequences for both managers and workers. The benefits and disadvantages of workplace tournaments have been identified in theoretical, empirical, and experimental research over the past several decades. Based on these findings, I provide suggestions and guidelines for when it might be beneficial to use tournaments in the workplace.

• Item Type: MPRA Paper
• Language: English
• Keywords: tournaments, contests, competition, contracts, workplace
• Subjects: C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory; C - Mathematical and Quantitative Methods > C8 - Data Collection and Data Estimation Methodology ; Computer Programs; C - Mathematical and Quantitative Methods > C9 - Design of Experiments; J - Labor and Demographic Economics > J4 - Particular Labor Markets; J - Labor and Demographic Economics > J7 - Labor Discrimination; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance; L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M1 - Business Administration; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M5 - Personnel Economics

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