TY  - RPRT
        AU  - Berger, Johannes
AU  - Herbertz, Claus
AU  - Sliwka, Dirk
        TI  - Managerial Incentives and Favoritism in Promotion Decisions: Theory and Field Evidence
        PY  - 2011/Mar/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 5543
        UR  - https://www.iza.org/publications/dp5543
        AB  - 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.
        KW  - incentives
KW  - favoritism
KW  - nepotism
KW  - tournaments
        ER  -