Hidden Benefits of Reward: A Field Experiment on Motivation and Monetary Incentives
AbstractWe conduct a field experiment in a controlled work environment to investigate the effect of motivational talk and its interaction with monetary incentives. We find that motivational talk significantly improves performance only if it is accompanied by performance pay. Moreover, performance pay reduces performance unless it is accompanied by motivational talk. By adding motivational sentences to an otherwise neutral explanation of the work task, the effect of performance pay goes from slightly negative to significantly positive. Hence, we find what we call a hidden benefit of monetary rewards: complementarity between performance pay and motivational talk.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 4393.
Date of creation: 2013
Date of revision:
verbal motivation; performance pay; field experiment;
Other versions of this item:
- Kvaløy, Ola & Nieken, Petra & Schöttner, Anja, 2013. "Hidden Benefits of Reward: A Field Experiment on Motivation and Monetary Incentives," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 451, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
- M52 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
- J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
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.:
- Thomas Lemieux & W. Bentley MacLeod & Daniel Parent, 2009. "Performance Pay and Wage Inequality-super-," The Quarterly Journal of Economics, MIT Press, vol. 124(1), pages 1-49, February.
- Frey, Bruno S & Oberholzer-Gee, Felix, 1997. "The Cost of Price Incentives: An Empirical Analysis of Motivation Crowding-Out," American Economic Review, American Economic Association, vol. 87(4), pages 746-55, September.
- Sliwka, Dirk, 2006.
"Trust as a Signal of a Social Norm and the Hidden Costs of Incentive Schemes,"
IZA Discussion Papers
2293, Institute for the Study of Labor (IZA).
- Dirk Sliwka, 2007. "Trust as a Signal of a Social Norm and the Hidden Costs of Incentive Schemes," American Economic Review, American Economic Association, vol. 97(3), pages 999-1012, June.
- Roland Benabou & Jean Tirole, 2003.
"Intrinsic and Extrinsic Motivation,"
Review of Economic Studies,
Wiley Blackwell, vol. 70(3), pages 489-520, 07.
- Anthony Marino & Jan Zabojnik, 2006.
"Work-Related Perks, Agency Problems, and Optimal Incentive Contracts,"
1107, Queen's University, Department of Economics.
- Anthony M. Marino & Ján Zábojník, 2008. "Work-related perks, agency problems, and optimal incentive contracts," RAND Journal of Economics, RAND Corporation, vol. 39(2), pages 565-585.
- Robert Dur & Arjan Non & Hein Roelfsema, 2008.
"Reciprocity and Incentive Pay in the Workplace,"
Tinbergen Institute Discussion Papers
08-080/1, Tinbergen Institute.
- Robert Dur & Arjan Non & Hein Roelfsema, 2009. "Reciprocity and Incentive Pay in the Workplace," SOEPpapers on Multidisciplinary Panel Data Research 177, DIW Berlin, The German Socio-Economic Panel (SOEP).
- Dur, Robert & Non, Arjan & Roelfsema, Hein, 2010. "Reciprocity and Incentive Pay in the Workplace," IZA Discussion Papers 4782, Institute for the Study of Labor (IZA).
- Ellingsen, Tore & Johannesson, Magnus, 2006.
"Pride and Prejudice: The Human Side of Incentive Theory,"
CEPR Discussion Papers
5768, C.E.P.R. Discussion Papers.
- Tore Ellingsen & Magnus Johannesson, 2008. "Pride and Prejudice: The Human Side of Incentive Theory," American Economic Review, American Economic Association, vol. 98(3), pages 990-1008, June.
- Bénabou, Roland & Tirole, Jean, 2004.
"Incentives and Prosocial Behaviour,"
CEPR Discussion Papers
4633, C.E.P.R. Discussion Papers.
- Benabou, Roland & Tirole, Jean, 2005. "Incentives and Prosocial Behavior," IZA Discussion Papers 1695, Institute for the Study of Labor (IZA).
- Roland Bénabou & Jean Tirole, 2004. "Incentives and Prosocial Behavior," Working Papers 137, Princeton University, Woodrow Wilson School of Public and International Affairs, Discussion Papers in Economics..
- Roland Bénabou & Jean Tirole, 2005. "Incentives and Prosocial Behavior," NBER Working Papers 11535, National Bureau of Economic Research, Inc.
- Bénabou, Roland & Tirole, Jean, 2003. "Incentives and Prosocial Behavior," IDEI Working Papers 389, Institut d'Économie Industrielle (IDEI), Toulouse, revised Jan 2006.
- Samuel Bowles & Sandra Polania-Reyes, 2012. "Economic Incentives and Social Preferences: Substitutes or Complements?," Journal of Economic Literature, American Economic Association, vol. 50(2), pages 368-425, June.
- Kube, Sebastian & Maréchal, Michel André & Puppe, Clemens, 2011.
"The currency of reciprocity - gift-exchange in the workplace,"
Working Paper Series in Economics
25, Karlsruhe Institute of Technology (KIT), Department of Economics and Business Engineering.
- Sebastian Kube & Michel Andre Marechal & Clemens Puppe, 2012. "The Currency of Reciprocity: Gift Exchange in the Workplace," American Economic Review, American Economic Association, vol. 102(4), pages 1644-62, June.
- Sebastian Kube & Michel André Maréchal & Clemens Puppe, 2010. "The currency of reciprocity - gift-exchange in the workplace," IEW - Working Papers 377, Institute for Empirical Research in Economics - University of Zurich, revised Aug 2011.
- Uri Gneezy & Stephan Meier & Pedro Rey-Biel, 2011. "When and Why Incentives (Don't) Work to Modify Behavior," Journal of Economic Perspectives, American Economic Association, vol. 25(4), pages 191-210, Fall.
- Pokorny, Kathrin, 2008. "Pay--but do not pay too much: An experimental study on the impact of incentives," Journal of Economic Behavior & Organization, Elsevier, vol. 66(2), pages 251-264, May.
- Michael Kosfeld & Susanne Neckermann, 2011.
"Getting More Work for Nothing? Symbolic Awards and Worker Performance,"
American Economic Journal: Microeconomics,
American Economic Association, vol. 3(3), pages 86-99, August.
- Kosfeld, Michael & Neckermann, Susanne, 2010. "Getting More Work for Nothing? Symbolic Awards and Worker Performance," IZA Discussion Papers 5040, Institute for the Study of Labor (IZA).
- Jordi Brandts & David J. Cooper, 2007. "It's What You Say, Not What You Pay: An Experimental Study of Managerâ€“Employee Relationships in Overcoming Coordination Failure," Journal of the European Economic Association, MIT Press, vol. 5(6), pages 1223-1268, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Julio Saavedra).
If references are entirely missing, you can add them using this form.