The right person for the right job: workers’ prosociality as a screening device

The impact of workers’ non-pecuniary motivation on their productivity is a fundamental issue in labor economics. Previous studies indicate that prosocially motivated workers may perform better when assigned to jobs having socially desirable implications – even if effort is non-contractible and they are offered a low-powered fixed-compensation scheme – as compared to a standard job with an effort-contingent payment. This suggests that profit-maximizing employers should assign workers to different jobs, based on workers’ prosociality. We run an experiment to explore the link between workers’ prosociality and their level of effort under a prosocial and a standard job. Our experimental results provide some support to the hypothesis that selfish employers exploit the information on workers’ prosociality to assign them the type of job that would be most profitable from the firm’s perspective. However, the prosocial motivation of employers emerges as a second important determinant of their contract choice: employers’ prosociality drives their contract choice, when the worker is not prosocial