We use data from a pay reform in an insurance company to contrastdifferent theories of work motivations. The management installedperformance pay to boost sales in the customer service centre of thecompany. The reform was successful. The bonus scheme gave the operatorsboth self-regarding and other-regarding incentives to increasesales. The increase in sales does therefore not in itself help us identifythe underlying motivation of the workers. However, when we examinethe evolution of the design and impact of the scheme, we concludethat the standard principal-agent model best explains the patterns inour data.
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