Digital technologies and performance incentives: evidence from businesses in the Swiss economy.

ABSTRACT: Using novel survey data from Swiss firms, this paper empirically examines the relationship between the use of digital technologies and the prevalence of performance incentives. We argue that digital technologies tend to reduce the cost of organizational monitoring through improved measurement of employee behavior and performance, as well as through employee substitution in conjunction with a reduced agency problem. While we expect the former mechanism to increase the prevalence of performance incentives, the latter is likely to decrease it. Our doubly robust ATE estimates show that companies using business software and certain key technologies of Industry 4.0 increasingly resort to performance incentives, suggesting that the improved measurement effect dominates the employee substitution e

SUBMITTER: Lehmann J 

PROVIDER: S-EPMC11782451 | biostudies-literature | 2025

REPOSITORIES: biostudies-literature