Halac, Marina and Prat, Andrea (2016) Managerial attention and worker performance. American Economic Review, 106 (10). pp. 3104-3132. doi:10.1257/aer.20140772 ISSN 0002-8282.

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Abstract

We present a novel theory of the employment relationship. A manager can invest in attention technology to recognize good worker performance. The technology may break and is costly to replace. We show that as time passes without recognition, the worker’s belief about the manager’s technology worsens and his effort declines. The manager responds by investing, but this investment is insufficient to stop the decline in effort and eventually becomes decreasing. The relationship therefore continues deteriorating, and a return to high performance becomes increasingly unlikely. These deteriorating dynamics do not arise when recognition is of bad performance
or independent of effort.

Item Type:	Journal Article
Subjects:	H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HF Commerce
Divisions:	Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH):	Employees -- Rating of , Incentive awards , Labor productivity, Employee motivation
Journal or Publication Title:	American Economic Review
Publisher:	American Economic Association
ISSN:	0002-8282
Official Date:	October 2016
Dates:	Date Event October 2016 Published 17 May 2016 Accepted
Volume:	106
Number:	10
Page Range:	pp. 3104-3132
DOI:	10.1257/aer.20140772
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Restricted or Subscription Access
Date of first compliant deposit:	15 September 2016
Date of first compliant Open Access:	16 September 2016

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