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The incentive effects of performance requirements – A real effort experiment

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  • Kajackaite, Agne
  • Werner, Peter

Abstract

We test if control exerted through the implementation of a minimum performance requirement has a counterproductive effect on output in a real effort experiment. To identify whether negative responses to control are related to the characteristics of the labor environment, we conduct treatments that induce different degrees of intrinsic motivation among experimental workers and also differ in the possibility for reciprocal reactions. Overall, the minimum performance requirement does not lead to a significant change in the average output level. However, our data indicate undesired effects of control in the dynamics of controlled agents’ working performance.

Suggested Citation

  • Kajackaite, Agne & Werner, Peter, 2015. "The incentive effects of performance requirements – A real effort experiment," Journal of Economic Psychology, Elsevier, vol. 49(C), pages 84-94.
    • Handle: RePEc:eee:joepsy:v:49:y:2015:i:c:p:84-94
    DOI: 10.1016/j.joep.2015.03.007
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    References listed on IDEAS

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    Cited by:

    1. Mortenson, Kristian G. & Pitre, Terence J., 2018. "Who benefits from share contracts?," Advances in accounting, Elsevier, vol. 42(C), pages 125-135.
    2. Boosey, Luke & Goerg, Sebastian, 2020. "The timing of discretionary bonuses – effort, signals, and reciprocity," Games and Economic Behavior, Elsevier, vol. 124(C), pages 254-280.

    More about this item

    Keywords

    Performance requirement; Control costs; Reciprocity; Intrinsic motivation;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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