In:
Journal of Economics & Management Strategy, Wiley, Vol. 22, No. 4 ( 2013-12), p. 744-767
Abstract:
Organizations differ in the degree to which they differentiate employees by ability. We analyze how the effect of differentiation on employee morale may explain this variation. We characterize sufficient conditions for the manager to refrain from differentiation. She refrains from differentiation when employees are of similar ability, especially if absolute levels are high. Avoiding differentiation boosts the self‐image of employees. To limit the negative effects of differentiation, the manager's strategy often relies on the coarsest message set possible. The likelihood that the manager differentiates depends on the presence of synergies between employees and on the convexity of the cost of effort function. Finally, we show that in the absence of commitment no differentiation is chosen too often.
Type of Medium:
Online Resource
ISSN:
1058-6407
,
1530-9134
DOI:
10.1111/jems.2013.22.issue-4
Language:
English
Publisher:
Wiley
Publication Date:
2013
detail.hit.zdb_id:
1481233-2
SSG:
3,2
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