SMU SOE Economics Lecture Series (Dec 2, 2021, 12.00pm-2.45pm): Workshop on Personnel Economics

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KEYNOTE PRESENTATION

Kinks as Goals: Accelerating Commissions and the Performance of Sales Teams

We study the performance of small retail sales teams facing an incentive scheme that includes both a lump sum bonus and multiple accelerators (kinks where the piece rate jumps upward). Consistent with standard labor supply models, we find that the presence of an attainable bonus or kink on a work-day raises mean sales, and that sales are highly bunched at the bonus. Inconsistent with those models, we find that teams bunch at the kinks instead of avoiding them. Teams’ responses to the kinks are consistent with models in which the kinks are perceived as symbolic rewards, or where kinks induce a sufficient amount of loss aversion. Since bunching at both the target and kinks is strongest in larger, more experienced teams, we argue that these reference points are best understood as shared goals, used by teams to motivate and co-ordinate their members.

Please view the paper here and the mostly related paper here.

KEYNOTE SPEAKER: PETER KUHN

Distinguished Professor of Economics

University of California, Santa Barbara

Peter Kuhn is a labor economist with interests in the effects of information technology on labor markets, wage and employment discrimination, personnel economics, China's labor markets, trade unions, immigration and displaced workers. His research has been funded by the National Science Foundation, the National Institutes of Health, and the Ford Foundation, among others. Peter is a Research Associate of the National Bureau of Economic Research (NBER), the Institute for the Study of Labor (IZA), and the Center for Economic Studies (CES). Peter currently serves on the editorial boards of Labour Economics and the Industrial and Labor Relations Review and as editor (one of eight) at the Journal of Labor Economics.

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SPEAKER 2: JUNGHO LEE

Assistant Professor of Economics

Singapore Management University

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SPEAKER 3: SEONGHOON KIM

Assistant Professor of Economics

Singapore Management University

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