TY  - RPRT
        AU  - Bartling, Björn
AU  - Fehr, Ernst
AU  - Schmidt, Klaus M.
        TI  - Screening, Competition, and Job Design: Economic Origins of Good Jobs
        PY  - 2010/Jan/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 4710
        UR  - https://www.iza.org/publications/dp4710
        AB  - In recent decades, many firms offered more discretion to their employees, often increasing the productivity of effort but also leaving more opportunities for shirking. These "high-performance work systems" are difficult to understand in terms of standard moral hazard models. We show experimentally that complementarities between high effort discretion, rent-sharing, screening opportunities, and competition are important driving forces behind these new forms of work organization. We document in particular the endogenous emergence of two fundamentally distinct types of employment strategies. Employers either implement a control strategy, which consists of low effort discretion and little or no rent-sharing, or they implement a trust strategy, which stipulates high effort discretion and substantial rent-sharing. If employers cannot screen employees, the control strategy prevails, while the possibility of screening renders the trust strategy profitable. The introduction of competition substantially fosters the trust strategy, reduces market segmentation, and leads to large welfare gains for both employers and employees.
        KW  - trust
KW  - competition
KW  - reputation
KW  - screening
KW  - high-performance work systems
KW  - job design
KW  - control
KW  - social preferences
KW  - complementarities
        ER  -