When Galatea Cares About Her Reputation: How Having Faith in Your Workers Reduces Their Motivation to Shine

Tinbergen Institute Discussion Paper 10-123/1

29 Pages Posted: 12 Dec 2010

See all articles by Jurjen J.A. Kamphorst

Jurjen J.A. Kamphorst

Erasmus University Rotterdam (EUR)

Otto H. Swank

Erasmus University Rotterdam - Department of Economics; Tinbergen Institute Rotterdam (TIR)

Date Written: December 6, 2010

Abstract

We develop a theory of leadership that focuses on the role managers play in motivating employees through their attitude towards employees. We model a manager's attitude as her perception about employees' abilities of successfully completing challenging tasks. We show that a positive attitude motivates employees who are driven by monetary rewards. A negative attitude may motivate employees who are driven by concerns about their reputation for being able. When employees are driven by monetary rewards and care about their reputations, an increase in the reward for successfully completing challenging tasks may lead employees to shy away from these tasks.

Keywords: reputation, worker motivation, task choice, principle-agent, Giffen goods

JEL Classification: D82, M59

Suggested Citation

Kamphorst, Jurjen J.A. and Swank, Otto H., When Galatea Cares About Her Reputation: How Having Faith in Your Workers Reduces Their Motivation to Shine (December 6, 2010). Tinbergen Institute Discussion Paper 10-123/1, Available at SSRN: https://ssrn.com/abstract=1721589 or http://dx.doi.org/10.2139/ssrn.1721589

Jurjen J.A. Kamphorst (Contact Author)

Erasmus University Rotterdam (EUR) ( email )

Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA
Netherlands

Otto H. Swank

Erasmus University Rotterdam - Department of Economics ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Tinbergen Institute Rotterdam (TIR)

P.O. Box 1738
3000 DR Rotterdam
Netherlands
+31 10 4081448 (Phone)
+31 10 2120551 (Fax)

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