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November 05, 2014 Do Employees Reciprocate Positively to a Pay Raise? Maybe Not So MuchIn an experiment among people who were hired to distribute copies of a new newspaper to passersby, a pay raise had no effect on performance except in the case of workers who felt the original wage was unacceptable. For them, the increase boosted performance by about 7%, says a team led by Alain Cohn of the University of Zurich. The findings suggest that the "positive reciprocity" effects of a wage increase are elusive, and that the performance boost from a pay raise may be due to countering certain employees' sense that their original wages were too low and therefore unfair. SOURCE: Fair Wages and Effort Provision: Combining Evidence from a Choice Experiment and a Field Experiment |
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