The Self-Selection and Effort Effects of Standard-Based Employment Contracts: A Framework and Some Empirical Evidence.

William S. Waller; Chee W. Chow

doi:10.2308/tar-4506734

The Self-Selection and Effort Effects of Standard-Based Employment Contracts: A Framework and Some Empirical Evidence.

William S. Waller¹; Chee W. Chow²

¹ Assistant Professor of Accounting, University of Arizona. 1 · ² Vern Odmark Professor of Accountancy, San Diego State University. 2

The Accounting Review 1985

ABSTRACT: This paper presents a framework for empirical research on the self-selection and effort effects on worker performance of standard-based employment contracts, along with the results of an experiment that tests some hypotheses derived within the framework. The framework examines how personal and contract attributes (or a worker's perceptions of them) affect the self-selection process and how self-selection and effort are interdependent. The experimental results were consistent with these hypotheses: workers select among alternative employment contracts based on their performance capability, the correlation between performance capability and performance incentives in the contract selected is higher in the presence of a controllability filter, and contract selection can explain effort effects.

DOI: 10.2308/tar-4506734
Volume: 60 (3)
Pages: 458-476
Language: en
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