Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/301355 
Year of Publication: 
2024
Series/Report no.: 
GLO Discussion Paper No. 1481
Publisher: 
Global Labor Organization (GLO), Essen
Abstract: 
Working from home reduces real-time visibility of employees within the physical space of the workplace. This makes it difficult to monitor employees' work behavior. Employers may instead monitor employees' outputs and provide incentives through performance pay. The crucial question is what type of performance pay employers provide to incentivize employees who work from home. Using British panel data, we find that working from home decreases the likelihood of solely receiving individual performance pay. It increases the likelihood of receiving collective performance pay - with or without individual performance pay. This pattern also holds in instrumental variable estimations accounting for endogeneity. Our findings fit theoretical considerations. Working from home means that employees have less opportunities to socialize at work entailing the tendency that they focus on personal achievement and neglect collaboration. Solely rewarding individual performance may reinforce this tendency. By contrast, employers reward collective performance as it counteracts the adverse effects of working from home by providing incentives for collaboration, helping on the job and information sharing.
Subjects: 
Remote work
face-to-face interaction
helping on the job
information sharing
individual performance pay
profit sharing
JEL: 
J22
J33
M50
M52
Document Type: 
Working Paper

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