Dear all,

on Thursday October 26 our ULME seminar starts on 4:15 pm in room 1.20 Heho 18. Our first speaker is Timo Vogelsang (Frankfurt School of Finance and Management), the title of his talk being "Performance Pay, Gifts, and the Relative Bonus Size". The abstract is attached at the end of this email.

Timo will be around prior to his talk. If you want to meet him or join us for lunch, please let me know. 

For the schedule of the seminar please see:
https://www.uni-ulm.de/mawi/mawi-wiwi/forschung-und-lehre/ulme-forschungsseminar/

Hope to see you next Thursday!

Best,
Sandra

Abstract:
We conducted a field experiment to compare the impact of financial performance pay and gifts on employee performance. We randomly assigned store managers at a German discount supermarket chain to receive either performance pay based on profit increases or an unconditional gift in form of a lump sum payment. Our findings indicate that, on average, performance pay significantly outperforms the gift, with profit increases of approximately 8%. However, we also discovered that the employees’ wage plays a role in the effectiveness of the schemes. The difference between both schemes becomes larger as the wage increases. Using an external control group, the gift appears to have a stronger effect on performance for employees with lower wages, while performance pay is more effective for those with higher wages. This suggests that employees react differently to various bonus schemes based on their perception of the bonus size relative to their wage.