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The effect of noise in a performance measure on work motivation: A real effort laboratory experiment

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  • Sloof, Randolph
  • van Praag, C. Mirjam

Abstract

This paper reports the results of an individual real effort laboratory experiment where subjects are paid for measured performance. Measured performance equals actual performance plus noise. We compare a stable environment where the noise is small with a volatile environment where the noise is large. Subjects exert significantly more effort in the volatile environment than in the stable environment. This finding is in line with standard agency theory and contrasts the intuitive idea captured by a distinct element of expectancy theory that noisier performance measures would lower work motivation.

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Bibliographic Info

Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 17 (2010)
Issue (Month): 5 (October)
Pages: 751-765

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Handle: RePEc:eee:labeco:v:17:y:2010:i:5:p:751-765

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Web page: http://www.elsevier.com/locate/labeco

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Keywords: Performance measures Noise Work motivation Experiments;

References

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Cited by:
  1. Bäker, Agnes & Mertins, Vanessa, 2013. "Risk-sorting and preference for team piece rates," Journal of Economic Psychology, Elsevier, vol. 34(C), pages 285-300.
  2. Vanessa Mertins & Wolfgang Hoffeld, 2013. "Do Overconfident Workers Cooperate Less? The Relationship between Overconfidence and Cooperation in Team Production," IAAEU Discussion Papers 201313, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).

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