Employee discharge and reinstatement: Moral hazards and the mixed consequences of last chance agreements

Peter A. Bamberger, Linda H. Donahue

Research output: Contribution to journalArticlepeer-review

Abstract

The authors examine the consequences of workplace discipline practices involving the use of last chance agreements (LCAs) - contracts governing the non-arbitral reinstatement of discharged employees. Using data from one manufacturing firm's 15-year experience with LCAs, they explore the impact of LCA-based employee reinstatement on subsequent years' discharge rates. They also seek to identify individual and work-related factors predictive of individual reinstatement "success." Consistent with moral hazard theory, the analysis shows evidence of a positive relationship between the number of LCAs signed in one year and the rate of discharge in subsequent years; and consistent with the theory of reintegrative shaming, LCAs appear to be most effective among those most susceptible to shaming.

Original languageEnglish
Pages (from-to)3-20
Number of pages18
JournalILR Review
Volume53
Issue number1
DOIs
StatePublished - Oct 1999

Fingerprint

Dive into the research topics of 'Employee discharge and reinstatement: Moral hazards and the mixed consequences of last chance agreements'. Together they form a unique fingerprint.

Cite this