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Do Financial Bonuses to Employees Reduce their Absenteeism? Outcome of a Lottery

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  • Wolter Hassink

    ()

  • Pierre Koning

    ()

Abstract

This paper investigates the effectiveness of a monthly lottery in reducing sick leave among workers in a manufacturing firm. Conditions of participation are not having reported sick in the previous three months and not having won the lottery earlier. It turns out that the lottery results in a decrease in the rate of sick leave of 1.6 percentage point. From the perspective of the firm, the lottery is found to be highly beneficial ­ that is, the benefits associated with the decrease in the sick leave rate exceed the costs of the lottery. Workers seem to be primarily driven by the first upcoming lottery. After winning the lottery, winners resume their previous (rate of) absence.

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File URL: http://www.uu.nl/faculty/leg/NL/organisatie/departementen/departementeconomie/onderzoek/publicaties/DParchive/2005/Documents/05-27.pdf
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Bibliographic Info

Paper provided by Utrecht School of Economics in its series Working Papers with number 05-27.

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Length: 34 pages
Date of creation: Jun 2005
Date of revision:
Handle: RePEc:use:tkiwps:0527

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Keywords: absenteeism; sick leave; incentives; lottery;

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References

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Citations

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Cited by:
  1. Pouliakas, Konstantinos & Theodoropoulos, Nikolaos, 2011. "The Effect of Variable Pay Schemes on Workplace Absenteeism," IZA Discussion Papers 5941, Institute for the Study of Labor (IZA).
  2. De Paola, Maria, 2008. "Absenteeism and Peer Interaction Effects: Evidence from an Italian Public Institute," MPRA Paper 11425, University Library of Munich, Germany.
  3. Konstantinos, Pouliakas & Ioannis, Theodossiou, 2010. "An Inquiry Into the Theory, Causes and Consequences of Monitoring Indicators of Health and Safety At Work," MPRA Paper 20336, University Library of Munich, Germany.
  4. Pouliakas, Konstantinos & Theodoropoulos, Nikolaos, 2009. "Performance Pay as an Incentive for Lower Absence Rates in Britain," MPRA Paper 18238, University Library of Munich, Germany.

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