...Tournaments and Piece Rates Revisited: A Theoretical and Experimental Study of Premium Incentives Werner Guth Rene Levnsky Kerstin Pully Ori Weiselz June 22, 2010 Abstract Tournaments represent an increasingly important component of organizational compensation systems. While prior research focused on xed-prize tournaments, i.e., on tournaments where the prize or prize sum to be awarded is set in advance, we introduce a new type of tournament into the literature: premium incentives. While premium incentives, just like xed-prize tournaments, are based on relative performance, the prize to be awarded is not set in advance but is a function of the rm's success: the prize is high if the rm is successful and low if it is not successful. Relying on a simple model of cost minimization, we are able to show that premium incentives outperform xed-prize tournaments as well as piece rates. Our theoretical result is qualitatively conrmed by a controlled laboratory experiment and has important practical implications for the design of organizational incentive systems. JEL Classication: C72, C91, J33 Keywords: Tournaments, Incentives, Economic experiments Max Planck Institute for Economics, Kahlaische Strasse 10, 07745 Jena, Germany. yEberhard Karls Universitat Tubingen, Faculty of Economics and Business Administration, Nauklerstrasse 47, 72074 Tubingen, Germany. zThe Hebrew University, Center for the Study of Rationality, Giv'at Ram, Jerusalem 91904, Israel...
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...price increases. • Managers: view compensation as a major expense and a means to influence employee behaviour. • Employees: view compensation as a return in an exchange with their employer, an entitlement, or a reward. 2- Explain the difference between base pay and performance pay. • Base pay: Base pay-wage or salary is the monetary compensation an employee receives for the work performed. For example, the base wage for machine operators may be $18 an hour but some individual operators might receive more because of their experience. • Incentives (or variable pay): Incentives tie pay increases directly to performance. It differs from merit increases. Incentives do not increase the base wage, and must be earned each pay period. The potential size of the incentive payment generally will be known beforehand. 3- What are the three tests used to determine whether a pay strategy is a source of competitive advantage? Are these tests difficult to pass? Can compensation be a source of competitive advantage? • Equity Theory: Fairness Equity theory focuses on how employees compare their work, qualifications, and pay to those of others. • Tournament Theory: Motivation and Performance Tournament theory suggests that the greater the differences between salaries in the pay structure, the harder employees will work. • Institutional Theory: Copy others Institutional theory suggests that organizations copy the best practices of the others. 4- Why is internal alignment...
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...There is a huge amount of money being made off college sports and has led to some questions to whether or not student-athletes should be paid for their efforts. As Forbes' Chris Smith wrote, CBS and Turner Broadcasting make more than $1 billion off the games, "thanks in part to a $700,000 ad rate for a 30-second spot during the Final Four." Athletic conferences receive millions of dollars in payouts from the NCAA when their teams advance deep into the tournament. Ditto for the coaches of the final squads standing. (US News and World Report, 2014) Unfortunately, the players don’t ever get to see any of that money, even though they risk career-ending injuries each time they step out onto the court, field or rink. In March of last year, Louisville Cardinals Kevin Ware suffered a gruesome broken leg, he successfully had surgery but it is still uncertain whether or not he will return. A group of former players filed an antitrust lawsuit alleging that student athletes should be entitled to some of the money the NCAA makes off of using their names and likenesses on merchandise such as jerseys, video games, Ads. Etc. If college athletes were allowed to accept money it would encourage good grades, make a good incentive program, and help with recruitment of players. Up until now the debate over whether a college athlete should be compensated during their sports career was just a debate; this has recently turned into more than that. In my opinion compensating the players would encourage...
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...Professor D.S. English Comp 112 8 March 2015 To Pay or Not to Pay Paying for a college education is one of the vast struggles of being a student. If a student is gifted with intelligence or stifling speed and athleticism they have a chance to earn a scholarship that virtually pays for their entire college experience. In recent history it is apparent that for some student-athletes this money is not enough, bringing up a burning question in college sports: should college athletes be paid? Some believe that it is essential for them to be paid for their hard work and dedication. Others believe that they are already relieved of future college debt, so why give them more? Each spectrum of this argument provides clear and concise evidence making it difficult to decipher which route may be the most reasonable. College is an expensive endeavor and student-athletes already gain a financial advantage and significantly larger benefits over the majority of the student population. The NCAA has always been considered an amateur league. According to the Oxford English Dictionary, an amateur is defined as, “one who cultivates anything as a pastime, as distinguished from one who prosecutes it professionally; hence, sometimes used disparagingly, as = dabbler, or superficial student or worker.” In 1957 the NCAA came to the conclusion, after years of avoiding the pressure, to subsidize and grant athletic scholarships. As young sports fans we aspire to be like our favorite athletes...
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...headquarter Competitive strategy Product strategy Advertising measures Price strategy Make of buy Innovation strategy Building up market entry barriers Usage of economies of scale Building up alliances Competitive advantages 1. Company 2. Competitor 3. Customer Unique Selling Proposition The unique feature of a product, which enables to have a competitive advantage over other providers. The marketing concept of the unique selling proposition facilitates the successful promotion of products. Highlighting of an outstanding product feature supports the company in positioning their products and helps to convince consumers of its benefits. Different ways of value of the headquarter 1. Stand-alone Influence Separate influence on the strategies and the performance of the particular business fields 2. Linkage Influence Creating synergies by taking advantages of existing relations between business fields 3. Central Functions and Services Avoidance of redundancies by providing cost-efficient centralised services 4. Corporate Development Design of the business portfolio through purchase, sale and restructuring of business fields Business design The totality of how a company selects its costumers, defines and differentiates its offerings, defines the tasks it will perform itself and those it will outsource, configures its resources, goes to market, creates utility for customers, and captures profit. It is the entire system for delivering utility to customers and earning a profit from that activity. Companies may...
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...® Academy of Management Journal 1999, Vol. 42, No. 1, 25-40. THE PERFORMANCE EFFECTS OF PAY DISPERSION ON INDIVIDUALS AND ORGANIZATIONS MATT BLOOM University of Notre Dame Pay distribution research is relatively scarce in the compensation literature, yet pay distributions are viewed as critically important by organizational decision makers. This study is a direct test of the relationship between one form of pay distribution—pay dispersion—and performance conducted in a field setting where individual and organizational performance could be reliably observed and measured. Findings suggest more compressed pay dispersions are positively related to multiple measures of individual and organizational performance. Among those who design and administer compensation systems, pay distributions have been an important issue for a long time, yet they have been studied relatively infrequently in the compensation research literature (Gomez-Mejia & Balkin, 1992; Meyer, 1975; O'Reilly, Main, & Crystal, 1988). The term pay distributions refers to the "array of compensation levels paid for differences in work responsibilities, human capital, or individual performance within a single organization" (Milkovich & Newman, 1996: 45). Although there seems to he agreement that pay distributions influence individual and organizational performance, there is little agreement over how or why they matter (Gerhart & Milkovich, 1992). In fact, there has been disagreement in the theoretical literature about the...
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...and foremost, female athletes were insignificant; they were over looked and discredited. Male athletes were convinced beyond any doubt that it was them, and them alone, who possessed the ability, talent and charisma needed to succeed in the sports arena. This awe confidence did, however, have its drawbacks as demonstrated by male’s inability to competition from those who disagreed with their enlightened options, views, and decisions. Women's sports include amateur and professional competitions in virtually all sports[->0]. Female participation in sports rose dramatically in the twentieth century, especially in the last quarter, reflecting changes in modern societies that emphasized gender parity. Although the level of participation and performance still varies greatly by country and by sport, women[->1]'s sports have broad acceptance throughout the world, and in a few instances, such as tennis[->2] and figure skating[->3], rival or exceed their male counterparts in popularity. An important aspect about women's sports is that women usually do not compete on equal terms against men. Historically, it has been understood that the "natural order of the universe" consisted of man to the marketplace, woman at home with her family, woman the mistress of domesticity, man the master of all else, man the rational thinker, woman the guardian of morals, man dominant, and woman subordinate. The injection of equality between the two genders challenged the foundation of the social order. Women's...
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...ÉCOLE POLYTECHNIQUE FÉDÉRALE DE LAUSANNE Statistical Models for Knock-out Soccer Tournaments Diego Kuonen Department of Mathematics Chair of Applied Statistics Prof. S. Morgenthaler, DMA, EPF Lausanne Assistant: E. Chavez, DMA, EPF Lausanne Winter 1996/97 Table of Contents 1 Introduction 1.1 Preliminary . . . . . . . . . 1.2 European Cups . . . . . . . 1.2.1 Champions Cup . . . 1.2.2 Cup Winners Cup . . 1.2.3 UEFA Cup . . . . . 1.2.4 UEFA Intertoto Cup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...
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...Stereotyping, prejudice, and discrimination: The effect of group based expectations on moral functioning Jennifer Steele, Y. Susan Choi, and Nalini Ambady Harvard University In press in T.A. Thorkildsen, J. Manning, & H.J. Walberg (Eds.), Children and Youth Series: Nurturing Morality. New York: Kluwer Academic. Stereotyping, prejudice, and discrimination: The effect of group based expectations on moral functioning As citizens of the United States, we are extremely fortunate to live in a democracy, and more specifically, a society that upholds egalitarian and meritocratic ideals. As a nation, we have fought wars and faced internal struggles in order to establish this system and champion these values. Within the last two centuries we have abolished slavery, given women the right to vote, and desegregated schools. In more recent years the movement towards equal opportunity has been advanced even further; public and private schools have increased financial support for economically disadvantaged scholars, and affirmative action programs have been developed as yet another means of combating inequities. It would seem that as a society, we are moving towards our moral ideal of equality for one and all. And yet, disparities remain. Race continues to be inextricably linked to socio-economic status and education level, with certain racial and ethnic groups, such as Caucasian- and Asian-Americans reaping more societal advantages on average than others, including...
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...1. STEPS IN THE VALUE CHAIN ACTIVITIES AT EACH STEP IN THE VALUE CHAIN: WITHOUT THEME PARK ACTIVITIES AT EACH STEP IN THE VALUE CHAIN: WITH THEME PARK DIFFERENCE ; STRATEGIC ISSUES Step 1: Advertising and general promotion Advertising focused on traditional media locations; mostly local, and targeted to those who live within 150 miles, and are middle aged or older. Advertising emphasizes mostly new attractions to draw old and new visitors. Advertising and promotion focused on a younger audience, those with kids, promotions for families with kids stay free etc... The focus should be to middle-aged visitors as well who have more leisure-time and willing to stay longer. Difference in the amount of advertising and promotion, though the nature of the advertising will differ. Young crowd won’t like to hang out with older ones. Step 2: Local and regional transportation Most visitors now arrive by bus and stay one day; the proportion of bus visitors is also increasing. There is a need to focus on travel agents and on providing affordable bus trips for this audience. Should provide accommodations for those traveling via bus (lounge area while waiting for bus arrival, etc.) New focus likely to be on car traffic and some air travel for families, in addition to the bus traffic. Affordable air-fare packages for families might be a good idea. Enough parking space, free valet, etc. Or hotel buses for group-packages to/from airport. The transportation patterns are...
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...Colorado Seminary (University of Denver) v. National Collegiate Athletic Association This action was brought by the University of Denver (“DU”) and several of its student-athletes to enjoin the National Collegiate Athletic Association (“NCAA”) from imposing sanctions against DU and declaring several of its hockey players ineligible. Colorado Seminary (Univ. of Denver) v. Nat’l Collegiate Athletic Ass’n, 570 F.2d 320, 321 (10th Cir. 1978), aff’d, Colorado Seminary (Univ. of Denver) v. Nat’l Collegiate Athletic Ass’n, 417 F.Supp. 885 (D.Co. 1976). Because DU refused to enforce the ineligibility of several of its hockey players despite the NCAA’s declaration of such, the DU hockey team was put on a two-year probation period, all DU athletic teams were unable to participate in post-season NCAA events and have its regular season games be televised, and the University was forced to forfeit its 1973 national title. 570 F.2d at 321. Plaintiffs claimed that the NCAA violated their due process and equal protection rights through its ineligibility declaration, however the trial court disagreed, denying Plaintiffs’ motion for summary judgment in favor of Defendant’s, albeit with some conditions. 417 F.Supp. at 893, 900. Plaintiffs appealed the denial, but the 10th Circuit affirmed the trial court’s decision and ultimately held that: the “students’ interest in participating in intercollegiate athletics did not rise to level of the constitutionally-protected property or liberty interest...
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...of the music. To the listeners, the ensembles appear dull and lacking harmony. When playing in a space designed for projection and harmony, all the individual sounds are able to weave together and resonate with each audience member. Before the renovations of the Shaw center, the Lamoni school was able to provide this experience for their friends, parents, relatives, guardian, teachers, and other attendees. Since the update of the space, there has been an added rental fee that even Lamoni cannot escape when using the Shaw. This fee is 400 dollars plus 10 dollars for every hour that David, the Shaw director, dedicates to the event. Due to the already stretched money for the public school, Lamoni is unable to rent or borrow the main stage. The Shaw main stage is not used constantly throughout the year due to the addition of the JR Black Box and Carol Hall. In addition, Graceland University has significantly more money and resources so that if Lamoni public school were to use the stage, they would barely cause a reduction in Graceland funds. The university would only need to pay David, who would work the lights form the performance and then the preceding...
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...all men are created equal; that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the pursuit of Happiness.”1 The core values of equality, freedom, and opportunity were established for this Nation in the Declaration of Independence. These core values provided the focus by which this country moved towards greatness and created a source of contention from within to ensure that all citizens receive equal and fair treatment. From the example of the United States establishing core values, leaders must determine their own core values. Identifying and establishing individual, as well as, organizational core values is a critical function if leaders are to bring their organization to high performance. Leaders‟ goals, decisions, and actions must be aligned with their core values to obtain personal and organizational success. This chapter examines the importance of establishing core values and posits that the process for establishing them should be a vital part of individual goal setting and organizational goal- and vision-setting. In On Becoming a Leader, Warren Bennis writes, “Until you truly know yourself, strengths and weaknesses, and know what you want to do and why you want to do it, you cannot succeed in any but the most superficial sense of the word.”2 Leaders who truly know themselves understand the importance that values have on motivating and inspiring others. By knowing and understanding the role that values have on our motivational...
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...The NGF research reported that in 2006, for the first time since the end of World War II, the number of golf courses that had closed exceeded the number of courses that were opened. The news was not encouraging. Many in the industry had begun to contemplate the factors that contributed to this news. Had the supply of golf courses become too great in comparison to relatively flat demand? Or, were there other more lucrative uses for the properties on which golf courses were traditionally located? Had environmental, land, or other resource constraints hindered new course development? More importantly, how would the industry behave in the years to come? And, what if anything could the industry do to influence future industry performance? Fazio was due to meet the following week with Joseph Beditz, President of the NGF, to discuss these questions. Both hoped to develop insight into the future prospects for the game and ideas about how the industry participants might reverse what appeared to be an unwelcome trend. Growth in the supply of US...
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...1. I worked at Merchandesing department in an E-Commerce company located in İstanbul for 8 months. My job title was Assistant Buyer and my primary duties were selecting textile products to be sold at the web site, making forecasts on budgeting and sales, deciding and making aggreements for new brands that have high potential . All the team members, including me had monthly sales and brand targets. Therefore, hiring matching employees for merchandesing department is very crucial. a) Our department’s roles in human resources management are explained below: * As a merchadesing department, we prepared an informative and descriptive presentation which explained the department’s duties, organization’s job titles, organizational relationship ( who is reporting to whom). For instance, there is a scheme which shows buyers firstly contact with the Planning Department for receiving budget. Then buyers visit suppliers and the main brands for selecting products according to given budget. After logistic department provides bought products to reach our warehouse. Then buyers contact with Production/ Studio Department for having products screened on the website. The other slides show the organizational relationship implying every team members’ job titles. For instance, as an assistant buyer, i was reporting to Buying Manager. A sales assistant was reporting to me. The buying manager was reporting to Head of Buying Manager and she was reporting to CEO. * As there are types of...
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