Analyzing the relationship between types of bonuses paid to managers and labor productivity (game theory approach)

Salimian, Salah; Ashrafi, Azadeh

doi:10.30473/jier.2023.63528.1389

Document Type : modeling

Authors

salah salimian ¹
Azadeh Ashrafi ²

¹ PhD in Economics, Department of Economics, Urmia University, Urmia, Iran

² Assistant Professor of public management, Department of Public Management, North Tehran Branch, Islamic Azad University, Tehran, Iran.

10.30473/jier.2023.63528.1389

Abstract

Based on an implicit general agreement, employee satisfaction and commitment are affected by full rewards, so managers' perceptions of the appropriate and effective use of rewards programs are necessary to increase efficiency. But one of the most important problems in this field is the inability to properly separate the types of labor based on their productivity during the distribution of bonuses, which causes that in many cases the labor force with high and low productivity receives the same reward. The current research tries to show that in some cases, even the distribution of inappropriate rewards can go beyond the equality of rewards for all types of labor force, so that the labor force with lower productivity is paid more reward than the labor force with higher productivity. Therefore, in this research, the relationship between managers and workforce was investigated through game theory. For this purpose, managers' strategy was designed in five modes and employees' strategy was designed in three modes. The results showed that at the equilibrium point, the strategy of managers will be to distribute continuous and equal rewards to employees with higher productivity, and employees will also choose the strategy of more effort to increase productivity (and therefore receive rewards). Finally, it is suggested that in order to create more motivation and effort for employees and as a result to increase their productivity, the distribution of bonuses among employees with higher productivity should be continuous and equal.

Keywords

Main Subjects

Industrial Economics, Structure_Conduct-Performance

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Journal of Industrial Economics researches

Analyzing the relationship between types of bonuses paid to managers and labor productivity (game theory approach)

References

References

Volume 7, Issue 23
October 2023
Pages 73-86

Analyzing the relationship between types of bonuses paid to managers and labor productivity (game theory approach)

References

References

Volume 7, Issue 23October 2023Pages 73-86

Volume 7, Issue 23
October 2023
Pages 73-86