Smarter Task Assignment or Greater Effort: the impact of incentives on team performance

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Smarter Task Assignment or Greater Effort: the impact of incentives on team performance

Author Info

Simon Burgess
Carol Propper
Marisa Ratto
Stephanie von Hinke Kessler Scholder
Emma Tominey ()

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Abstract

We use an experiment to study the impact of team-based incentives, exploiting rich data from personnel records and management information systems. Using a triple difference design, we show that the incentive scheme had an impact on team performance, even with quite large teams. We examine whether this effect was due to increased effort from workers or strategic task reallocation. We find that the provision of financial incentives did raise individual performance but that managers also disproportionately reallocated efficient workers to the incentivised tasks. We show that this reallocation was the more important contributor to the overall outcome.

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Publisher Info
Paper provided by Department of Economics, University of Bristol, UK in its series The Centre for Market and Public Organisation with number 09/215.

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Length: 28 pages
Date of creation: Mar 2009
Date of revision:
Handle: RePEc:bri:cmpowp:09/215

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Find related papers by JEL classification:
J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

This paper has been announced in the following NEP Reports:

NEP-ALL-2009-04-25 (All new papers)
NEP-LAB-2009-04-25 (Labour Economics)

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

William E. Encinosa III & Martin Gaynor & James B. Rebitzer, 1997. "The Sociology of Groups and the Economics of Incentives: Theory and Evidence on Compensation Systems," NBER Working Papers 5953, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
- William E. Encinosa, III & Martin Gaynor & James B. Rebitzer, . "The Sociology of Groups and the Economics of Incentives: Theory and Evidence on Compensation Systems," GSIA Working Papers 49, Carnegie Mellon University, Tepper School of Business. [Downloadable!]
- William E. Encinosa III & Martin Gaynor & James B. Rebitzer, 2005. "The Sociology of Groups and the Economics of Incentives: Theory and Evidence on Compensation Systems," IZA Discussion Papers 1851, Institute for the Study of Labor (IZA). [Downloadable!]
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Stephen G Donald & Kevin Lang, 2007. "Inference with Difference-in-Differences and Other Panel Data," The Review of Economics and Statistics, MIT Press, vol. 89(2), pages 221-233, 03. [Downloadable!] (restricted)
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Knez, Marc & Simester, Duncan, 2001. "Firm-Wide Incentives and Mutual Monitoring at Continental Airlines," Journal of Labor Economics, University of Chicago Press, vol. 19(4), pages 743-72, October. [Downloadable!] (restricted)
Simon Burgess & Carol Propper & Marisa Ratto & Emma Tominey, 2004. "Incentives in the Public Sector: Evidence from a Government Agency," The Centre for Market and Public Organisation 04/103, Department of Economics, University of Bristol, UK. [Downloadable!]
Kandel, Eugene & Lazear, Edward P, 1992. "Peer Pressure and Partnerships," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 801-17, August. [Downloadable!] (restricted)
Other versions:
- Kandel, E. & Lazear, E.P., 1989. "Peer Pressure And Partnership," Papers e-89-5, Stanford - Hoover Institution.
- Kandel, E. & Lazear, E.P., 1990. "Peer Pressure and Partnerships," Papers 90-07, Rochester, Business - Managerial Economics Research Center.

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