%0 Report
        %A Berger, Johannes
%A Herbertz, Claus
%A Sliwka, Dirk
        %T Managerial Incentives and Favoritism in Promotion Decisions: Theory and Field Evidence
        %D 2011
        %8 2011 Mar
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 5543
        %U https://www.iza.org/publications/dp5543
        %X This paper investigates the effects of managerial incentives on favoritism in promotion decisions. First, we theoretically show that favoritism leads to a lower quality of promotion decisions and in turn lower efforts. But the effect can be mitigated by pay-for-performance incentives for managers who decide upon promotion. Second, we analyze matched employer-employee survey data with detailed firm level information on managerial incentive schemes and find that perceived promotion quality is indeed substantially higher when managers receive performance-related pay or participate in gain sharing plans.
        %K incentives
%K favoritism
%K nepotism
%K tournaments