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Do Financial Bonuses Reduce Employee Absenteeism? Evidence from a Lottery

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  • Wolter H.J. Hassink
  • Pierre Koning

Abstract

This paper investigates the effectiveness of a lottery-based bonus reward system in reducing employee absenteeism. Starting in June 2002, a Dutch manufacturing firm held a monthly lottery for workers who had taken no sick leave in the previous three months and had not previously won the lottery. In a given lottery, each of seven contestants whose names were randomly drawn received 75 Euros. The authors find statistically significant differences in absence patterns across groups of workers with different eligibility statuses depending on their attendance records and whether they had previously won. One finding is that absenteeism rose among workers who, having won already, were ineligible for further participation. Nevertheless, and although the reduction in firm-wide absence associated with the lottery drifted from 2.4 percentage points to 1.1 percentage points after seven months, the authors conclude that the lottery was of net benefit to the firm.

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Bibliographic Info

Article provided by ILR Review, Cornell University, ILR School in its journal ILR Review.

Volume (Year): 62 (2009)
Issue (Month): 3 (April)
Pages: 327-342

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Handle: RePEc:ilr:articl:v:62:y:2009:i:3:p:327-342

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Cited by:
  1. Pfeifer, Christian, 2012. "Base Salaries, Bonus Payments, and Work Absence among Managers in a German Company," IZA Discussion Papers 7088, Institute for the Study of Labor (IZA).
  2. Nicolas R. Ziebarth & Martin Karlsson, 2014. "The Effects Of Expanding The Generosity Of The Statutory Sickness Insurance System," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 29(2), pages 208-230, 03.

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