Envy in the workplace

Envy in mission-oriented organisations

“…We show that, in mission-oriented organisations, employees' envy leads to surprising and novel results. Differently from the previous theoretical literature on disadvantageous inequity aversion (see von Siemens, 2011, 2012, and Manna, 2016, we find that high-ability employees might be those who suffer from envy and must consequently be compensated for it. More specifically, we show that in sectors where mission is important, despite receiving higher wages than their less talented colleagues, highability workers perceive their contract as unfair because they are required to perform much more demanding tasks.…”

“…Like Desiraju and Sappington (2007), von Siemens (2011, 2012, and Manna (2016), we consider a setting with adverse selection on some workers' characteristics and we assume that employees suffer a disutility whenever they feel worse off than their colleagues. Differently from the existing literature, we derive screening contracts when workers are envious and the employer is willing to extract labour donations from motivated employees.…”

“…In other terms, envy depends on the comparison of worker's effective salary ωi which is ω i reduced by some function f (c i ) of the effort cost which depends on the workers' ability. 6 Following this insight, previous theoretical works as Desiraju and Sappington (2007), and Manna (2016) further specify this idea assuming, for simplicity, that…”

Envy in Mission-Oriented Organizations

“…We contribute to the debate on fairness in the workplace suggesting that non-monetary rewards may become particularly important in mission-oriented organizations confronted with motivated workers. Specifically, the organization could increase attention towards its employees by adopting strategies as, for example, recognition and delegation which may effectively complement traditional monetary incentives used to screen workers (see Bradler et al, 2016, andDe Chiara andManna, 2016, for models investigating recognition and delegation, respectively).…”

“…In von Siemens (2011Siemens ( , 2012, and Manna (2016), optimal contracts are such that high-ability employees never suffer from envy and exert the efficient level of effort. Low-ability workers, instead, are envious of their high-ability colleagues who receive the information rent and must be compensated with an envy rent.…”