Gift Exchange in the Workplace: Money or Attention?

No 2496, CESifo Working Paper Series from CESifo

Abstract: We develop a model of manager-employee relationships where employees care more for their manager when they are more convinced that their manager cares for them. Managers can signal their altruistic feelings towards their employees in two ways: by offering a generous wage and by giving attention. Contrary to the traditional gift-exchange hypothesis, we show that altruistic managers may offer lower wages and nevertheless build up better social-exchange relationships with their employees than egoistic managers do. In such equilibria, a low wage signals to employees that the manager has something else to offer — namely, a lot of attention — which will induce the employee to stay at the firm and work hard. Our predictions are well in line with some recent empirical findings about gift exchange in the field.

Keywords: manager-employee relationships; wages; extra-role behavior; sabotage; gift exchange; social exchange; conditional altruism; reciprocity; signaling game (search for similar items in EconPapers)
JEL-codes: D86 J41 M50 M54 M55 (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Related works:
Journal Article: Gift Exchange in The Workplace: Money or Attention? (2009)
Working Paper: Gift Exchange in the Workplace: Money or Attention? (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2496

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