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Worker Performance and Group Incentives: A Case Study

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  • Daniel G. Hansen

Abstract

The author uses monthly, individual-level data collected from two units within a large U.S. financial corporation to estimate employees' response to the introduction of a group incentive plan. The findings indicate that the incentive plan caused performance to converge to a standard: the initially least productive workers improved greatly, whereas the performance of the initially most productive workers did not change. However, the evidence suggests that the incentive plan was successful in increasing the average level of productivity across the work group.

Suggested Citation

  • Daniel G. Hansen, 1997. "Worker Performance and Group Incentives: A Case Study," ILR Review, Cornell University, ILR School, vol. 51(1), pages 37-49, October.
  • Handle: RePEc:sae:ilrrev:v:51:y:1997:i:1:p:37-49
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    File URL: http://ilr.sagepub.com/content/51/1/37.abstract
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    Cited by:

    1. Irlenbusch, Bernd & Ruchala, Gabriele K., 2008. "Relative rewards within team-based compensation," Labour Economics, Elsevier, vol. 15(2), pages 141-167, April.
    2. De Paola, Maria & Gioia, Francesca & Scoppa, Vincenzo, 2019. "Free-riding and knowledge spillovers in teams: The role of social ties," European Economic Review, Elsevier, vol. 112(C), pages 74-90.
    3. Kato, Takao & Shu, Pian, 2008. "Performance Spillovers and Social Network in the Workplace: Evidence from Rural and Urban Weavers in a Chinese Textile Firm," IZA Discussion Papers 3340, Institute of Labor Economics (IZA).
    4. repec:bla:econom:v:84:y:2017:i:335:p:498-515 is not listed on IDEAS
    5. Brice Corgnet, 2018. "Rac(g)e Against the Machine? Social Incentives When Humans Meet Robots," Post-Print halshs-01984467, HAL.
    6. Irlenbusch, Bernd & Ruchala, Gabriele K., 2006. "Relative Rewards within Team-Based Compensation," IZA Discussion Papers 2423, Institute of Labor Economics (IZA).
    7. Burkhard Hehenkamp & Oddvar Kaarboe, 2006. "When Should the Talented Receive Weaker Incentives? Peer Pressure in Teams," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 62(1), pages 124-148, March.
    8. Uwe Jirjahn & Kornelius Kraft, 2010. "Teamwork And Intra‐Firm Wage Dispersion Among Blue‐Collar Workers," Scottish Journal of Political Economy, Scottish Economic Society, vol. 57(4), pages 404-429, September.
    9. repec:kea:keappr:ker-20180701-34-2-02 is not listed on IDEAS
    10. Doucouliagos, Chris & Laroche, Patrice & Kruse, Douglas L. & Stanley, T. D., 2018. "Where Does Profit Sharing Work Best? A Meta-Analysis on the Role of Unions, Culture, and Values," IZA Discussion Papers 11617, Institute of Labor Economics (IZA).
    11. Barton H. Hamilton & Jack A. Nickerson & Hideo Owan, 2003. "Team Incentives and Worker Heterogeneity: An Empirical Analysis of the Impact of Teams on Productivity and Participation," Journal of Political Economy, University of Chicago Press, vol. 111(3), pages 465-497, June.
    12. Joseph Blasi & Richard Freeman & Douglas Kruse, 2016. "Do Broad-based Employee Ownership, Profit Sharing and Stock Options Help the Best Firms Do Even Better?," British Journal of Industrial Relations, London School of Economics, vol. 54(1), pages 55-82, March.
    13. Joseph R. Blasi & Richard B. Freeman & Christopher Mackin & Douglas L. Kruse, 2010. "Creating a Bigger Pie? The Effects of Employee Ownership, Profit Sharing, and Stock Options on Workplace Performance," NBER Chapters,in: Shared Capitalism at Work: Employee Ownership, Profit and Gain Sharing, and Broad-based Stock Options, pages 139-165 National Bureau of Economic Research, Inc.
    14. Carpenter, Jeffrey P. & Robbett, Andrea & Akbar, Prottoy, 2016. "Profit Sharing and Peer Reporting," IZA Discussion Papers 9946, Institute of Labor Economics (IZA).
    15. Panos, Georgios A. & Theodossiou, Ioannis, 2010. "Unionism and Peer-Referencing," SIRE Discussion Papers 2010-122, Scottish Institute for Research in Economics (SIRE).
    16. Kenneth L. Schultz & David C. Juran & John W. Boudreau, 1999. "The Effects of Low Inventory on the Development of Productivity Norms," Management Science, INFORMS, vol. 45(12), pages 1664-1678, December.
    17. Zeynep Hansen & Hideo Owan & Jie Pan, 2015. "The impact of group diversity on class performance: evidence from college classrooms," Education Economics, Taylor & Francis Journals, vol. 23(2), pages 238-258, April.
    18. repec:eee:labeco:v:46:y:2017:i:c:p:110-117 is not listed on IDEAS

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